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August 2022

Today's Date: July 2, 2024

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Minority Groups Unite Over Broadband Issue

WASHINGTON - The following is a letter sent by the Minority Media & Telecom Council regarding minority businesses need to be able to pay for faster and more reliable broadband service. Groups signing on to the letter include the National Association of Black County Officials, the National Black Caucus of State Legislators, and the National Conference of Black Mayors and others who are already on the record as having concerns about the FCC's plans to codify network neutrality rules.

The Honorable John Rockefeller

Senate Committee on Commerce, Science and Transportation

253 Russell Senate Office Building

Washington, DC 20510

The Honorable Kay Bailey Hutchison

Senate Committee on Commerce, Science and Transportation

253 Russell Senate Office Building

Washington, DC 20510

The Honorable Henry Waxman

House Committee on Energy and Commerce

2125 Rayburn House Office Building

Washington, DC 20515

The Honorable Joe Barton

House Committee on Energy and Commerce

2125 Rayburn House Office Building

Washington, DC 20515

Dear Chairmen Rockefeller and Waxman, Ranking Members Hutchison and Barton:

Please accept this letter voicing opposition to the Federal Communications Commission (“FCC”)

regarding its “third way” proposal for reclassifying broadband Internet access as a common carrier

telecommunications service.

We agree with the FCC on where a carefully constructed and narrowly tailored policy can guide the

broadband market in the United States – towards ubiquitously available and affordable connections

for even the most destitute and geographically remote of non-adopters, robust adoption among

under-adopting minority groups, and effective utilization by minority and women owned business

enterprises (“MWBEs”) and socially and economically disadvantaged businesses (“SDBs”).

However, we disagree strongly with the FCC’s proposed means for achieving these goals. As

discussed at length in the accompanying Comments on broadband reclassification submitted by

MMTC on behalf of eight highly respected parties including itself (the “National

Organizations”),1 we strongly caution the FCC against pursuing its “third way” lest it hobble

critical efforts aimed at bolstering broadband availability, affordability, and adoption among

minorities and disadvantaged businesses. Alternatively, we contend that the FCC possesses

ample authority under the existing regulatory regime to realize all of the laudable goals for

broadband outlined in the Commission’s first-rate National Broadband Plan.

By pursuing a “third way” for broadband, the FCC risks halting the positive momentum toward

further empowering minority users, MWBEs, and SDBs via broadband. Indeed, the National

Organizations’ Comments highlight several negative impacts that will likely result if the FCC

implements its “third way” proposals. These include:

Price Increases. The national organizations are concerned that the price of

broadband for consumers could increase by over 16% as a result of subjecting

broadband to a number of common carrier regulatory charges and fees that will

ultimately be borne by end-users. Increasing the price of broadband will thwart

the Commission’s efforts to achieve one of its core goals for broadband –

increased adoption among demographic groups that have cited the affordability of

broadband as a primary barrier to home adoption. This is of particular import to

minority and low-income consumers, many of whom would be disproportionately

impacted by an increase in the cost of broadband because these groups are more

sensitive to price changes than are others. Several recent studies have found that

affordability is one of the greatest impediments to minority broadband adoption;2

thus, broadband reclassification would sharply conflict with Congress’ and the

White House’s goals of closing the digital divide.

1 These organizations are the Hispanic Technology and Telecommunications Partnership,

Latinos in Information Sciences and Technology Association, MANA – A National Latina

Organization, Minority Media and Telecommunications Council, National Association of Black

County Officials, National Conference of Black Mayors, National Conference of Puerto Rican

Women, and National Puerto Rican Coalition, Inc.

2 See, e.g., Federal Communications Commission, Connecting America: The National

Broadband Plan, Ch. 9 (March 2010) (discussing the connection between income and broadband

adoption); Robert Shapiro and Kevin Hassett, A New Analysis of Broadband Adoption Rates By

Minority Households, at pp. 10-11, 17 (June 2010) (noting that “extensive research…has found

that price is the single largest determinant of broadband subscription” and that “lower income

households are particularly sensitive to higher broadband prices.” The authors concluded that “a

disproportionate share of African American and Hispanic households…[is] more sensitive to

such price increases than higher-income households.”)

Decreased Investment Across the Broadband Environment. Implementation of

the FCC’s proposed policies would also likely have negative impacts on

investment decisions across the entire broadband ecosystem. Less investment at

the network level will not only deprive minority consumers and innovators of

more advanced connections, it will also chill investment at the edge of the

network. In a marketplace defined by regulatory uncertainty, investors will seek

to back only proven firms in order to decrease their risk exposure. Thus, new

firms will operate at more of a disadvantage as investment dollars will be even

scarcer in a heavily regulated market. This dynamic would disproportionately

impact MWBEs and SDBs, the vast majority of which already have difficulty

accessing adequate capital to launch and maintain new online enterprises.

Less Consumer Protection from Dominant Online Firms. The FCC’s proposed

policies also fail to provide adequate protections for consumers and small

businesses from harms caused by large online content and application providers.

In particular, the “third way” would prohibit the offering of services tailored to

small businesses and minority entrepreneurs, and would prevent the Federal Trade

Commission from protecting online consumers.

The FCC’s proposed “third way” policy fails to imbue confidence that the Commission is serious

about tackling endemic problems in the minority community. The FCC’s failure to protect civil

rights in other realms adds to our concerns – for example, the FCC has all but shut down EEO

enforcement, having failed to issue a single EEO enforcement order for more than a year; it has

not assigned a compliance officer to enforce the advertising nondiscrimination rule for two

years; it has failed for five years to provide for multilingual broadcasting as part of its EAS

emergency broadcasting system, and it is nearly seven months late in submitting Congress its

triennial market entry barriers (Section 257) report.

Thus, we encourage you to ask the FCC to refocus its efforts on civil rights protections, hold its

net neutrality and reclassification proposals in abeyance, and defer to Congress for additional

guidance on broadband reclassification. FCC deference to Congress on reclassification has been

endorsed by bipartisan majorities in both houses of Congress and by a number of other

stakeholders across the broadband ecosystem. Deferring to Congress would assure that the

marketplace is afforded sufficient regulatory certainty going forward. Such certainty is

necessary at this critical moment in the evolution of the broadband market. Certainty drives

investment at the core of networks and at its edges. Certainty also encourages investors to take

more risks and back fledgling firms, a dynamic that has become central to the success of the

broadband ecosystem and to enabling MWBEs and SDBs to compete effectively.

Sincerely,

David Honig

President and Executive Director

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