Executive Summary

Date: March 11, 2021 Participants: Dr. David Arsen (Professor of Education Policy, MSU) and Jason Kronemeyer Topic: Rural Education Policy & The Broadband Gap

Dr. Arsen is leading a research project to define a policy agenda for Michigan’s rural schools and communities. While his team has expertise in school funding and staffing, they identified Broadband Internet Access as a critical but technically complex challenge. This meeting served as a deep dive into the structural and policy failures of current broadband funding mechanisms, specifically the Universal Service Fund (USF) and the Lifeline program.

1. Project Context (Dr. Arsen)

  • Goal: Create a policy agenda for Michigan rural schools/communities by Jan 2022.
  • Methodology: Qualitative “listening tour” with 24 rural superintendents (oversampled UP).
  • Key Findings: Superintendents identified four top challenges:
    1. Mental Health & Substance Abuse
    2. Teacher/Staff Recruitment & Retention
    3. School Funding
    4. Broadband Connectivity
  • The Gap: State policy discussions often overlook the specific nuance of rural communities.

2. Key Policy Insights (Jason Kronemeyer)

A. Philosophy: Infrastructure First

  • The Prerequisite: Before addressing digital literacy or equity, communities must solve the underlying infrastructure challenge. Even the best devices and training are useless if the wire doesn’t reach the house.
  • The “Mapping Trap”: Policymakers focus disproportionately on improving broadband maps. We do not need perfect maps to improve policy; bad policy is what creates the data gaps.
  • Quote: “We don’t have to wait for the data to improve the policy… We have to fix the infrastructure first.”

B. The Universal Service Fund (USF) Structure

The USF is the primary federal vehicle for connectivity, divided into four programs:

  1. E-Rate: Schools & Libraries (Connects institutions).
  2. Rural Health Care: Connects clinics.
  3. High Cost: Subsidies for providers to build in expensive areas.
  4. Lifeline: Subsidies for low-income households (demand-side).

C. The Lifeline “Catch-22”

Jason identified a critical failure in the Lifeline program for rural families:

  • The Mechanism: Lifeline provides a discount on a bill. It is a demand-side subsidy.
  • The Failure: To receive the subsidy, a family must:
    1. Live at an address with existing infrastructure.
    2. Subscribe to a service.
    3. Have a provider that chooses to participate in the Lifeline program.
  • The Result: In rural areas without infrastructure, eligible families cannot use the subsidy because there is no service to buy. Furthermore, providers have no incentive to participate in Lifeline (high administrative burden, no extra profit), so even if infrastructure exists, the subsidy may be inaccessible.
  • Inequity: A citizen’s ability to access federal aid they are eligible for is determined by their street address and the business decisions of private providers.
  • The “Applebee’s” Analogy: Jason compared the current model to the National School Lunch Program: “Imagine if for a student to eat lunch, there had to be an Applebee’s in town. Because Applebee’s is the only place that participates in the program… so that qualified students can get that support.”

Critical Question

To whom does it benefit when a subsidy designed to support the individual goes to a private entity first?

D. The Regulatory Responsibility (FCC & MPSC)

  • The Mandate: Both the Federal Communications Commission (FCC) and the Michigan Public Service Commission (MPSC) are charged with ensuring universal service.
  • The Design Failure: By designing policies that rely entirely on voluntary private participation, regulators have effectively abdicated their responsibility to ensure equitable access.
  • Investigation Target: Dr. Arsen should investigate the MPSC’s specific authority. If they oversee Lifeline, do they not also have the obligation to correct market failures that prevent citizens from accessing it?

E. Retrospective: The Affordable Connectivity Program (ACP) Parallel

  • The Pattern Repeats: The subsequent Affordable Connectivity Program (ACP) validated the concerns raised in this meeting about Lifeline.
  • Flawed Design: Like Lifeline, ACP was designed as a demand-side voucher. It assumed that the barrier to entry was solely affordability, ignoring the availability crisis in rural areas.
  • Outcome: Rural residents eligible for the benefit were unable to use it because no service existed at their address. The policy effectively transferred wealth to population centers where infrastructure existed (Rich Get Richer Phenomenon), while leaving rural connectivity gaps unaddressed—a direct repeat of the Lifeline policy failure.

3. The Community Anchor Model

Jason advocated for a fundamental shift in how rural communities organize around connectivity, moving away from reliance on commercial entities to a collaborative, community-centered approach.

A. Schools as “Digital Utilities”

  • Tech Support Hubs: Schools and libraries should serve as the primary interface for community tech support and digital literacy, rather than leaving families to navigate commercial support lines.
  • Quote: “I want people to come to school to get their tech support… if it all becomes a community service, a cooperative where that cooperative is who works with the providers.”

B. Resource Pooling (“Many Checkbooks”)

  • Concept: No single entity (school, township, library) can solve the funding gap alone.
  • Strategy: “Many checkbooks make light work.” By pooling resources across healthcare, local government, and education, communities can aggregate enough demand and capital to incentivize build-outs that are otherwise commercially unviable.

C. Redefining Affordability

  • Responsibility Shift: Affordability should be viewed as a community responsibility to facilitate, not a demand to make of a private business.
  • Quote: “Affordability is the community’s responsibility… We can’t demand affordability from a commercial entity.”

4. Strategic Recommendations

  1. Infrastructure First: Prioritize “pipes in the ground” over literacy/adoption programs until universal access is achieved.
  2. Investigate MPSC Authority: Determine if the MPSC has the power to mandate provider participation in Lifeline/ACP equivalents to prevent the “Applebee’s” scenario.
  3. Formalize Resource Pooling: Create legal or inter-local frameworks that allow schools, libraries, and townships to co-invest in tech support infrastructure.
  4. Establish Community Support Hubs: Fund schools and libraries not just as educational institutions, but as public digital support centers for the entire population.