One of the most important issues that the FCC should examine in considering a proposal to expand its E-rate programs, is the issue of “dark fiber.” Dark fiber refers to fiber optic cable that has not been activated, or “lit,” for use. Some people are saying that the FCC should expand E-rate by expending limited Universal Service Fund (USF) resources on limited-reach networks, i.e., networks that only reach the locations of E-rate customers, and do not provide broadband services to the community at large. But in a world where USF dollars are limited, and any expansion in E-rate could reduce funding available for other universal service objectives, it is critical that the FCC build synergies between its programs. E-rate should not become a digital bridge to nowhere.
Proponents of this plan argue that dark fiber could be a more cost-effective way for schools and libraries to afford high speed broadband service. But policymakers must be careful when analyzing this assumption. Fiber in the ground does not a reliable broadband service make. The Commission proposes to support the cost of electronics to light the fiber, but what about the considerable expertise required to setup and manage the ongoing operation of a sophisticated network? Are schools going to be expected to take on this role? Or will they need to hire consultants? Asking a school to become a telecom provider makes about as much sense as asking a telecom provider to open an elementary school. Our public schools already have the most challenging and important job in the country — educating our children. Does it make public policy sense to add owning and operating networks to that job? The answer cannot possibly be yes.
Even if a school is capable of building and operating a high-capacity network with dark fiber, in many cases it would do so at the cost of the community at large. If private fiber networks are deployed only to serve certain select locations, those schools and libraries will not serve as “anchor institutions” – in which the benefits of broadband are spread to the larger community – on widely deployed networks. Instead, they will risk becoming islands of connectivity in a sea of inadequate broadband. Allowing that to happen would conflict with the national Universal Service Fund imperative to get high speed broadband service to all Americans in all parts of the country.
E-rate is, after all, a USF program and it should be designed to further the same goals. If E-rate is to be used to deploy networks, then it will only be cost effective for the country if the funds are used by telecom providers to build publicly available networks in communities that lack adequate broadband today. Indeed, to the extent that dark fiber might appear to be less expensive than services provided over a robust, community-wide network, that appearance is deceiving. By impairing the scale and scope economies available to providers of community-wide services, dark fiber imposes additional costs on society-at-large that should not be ignored.
AT&T fully supports the President’s ConnectEd initiative and E-rate 2.0. There is no question that all schools and libraries must be armed with the power of high-speed broadband. But let’s make sure we do not modernize E-rate in a vacuum. Universal Service funding is, and always has been, about ensuring modern telecommunications services are available to all Americans. That’s what E-rate should be about as well.