Update: Rural America Left Behind in Lifeline Reform

National Grange President, Betsy Huber, has expressed serious concern with H.R.4884, the CURB Lifeline Abuse Act with.  In a letter to House Communications and Technology Subcommittee Chairman Walden (R-OR-2), Ranking Member Eshoo (D-CA-18) and bill sponsor Scott (R-GA-8), Huber acknowledged Congress’ concerns with fiscal responsibility of the Lifeline program, but opposed the proposed two-year phase-out of mobile voice Lifeline service in favor of broadband service.  However, major portions of rural America still have no broadband access and that is a problem.


Why is Rural America Being Left Behind in Lifeline Reform?

Major portions of rural America have no access to broadband.  Fewer than one in five Americans (17 percent) can’t access what the Federal Communications Commission (FCC) defines as broadband, but that level is three times higher – a whopping 53% — when it comes to rural America.  And what about those parts of rural America with broadband access?  According to the 2015 State of the Internet Report, the average connection speed in many rural areas is slower than those in Estonia, Uruguay, and Thailand.

That’s why the millions of us who live in rural America can muster no more than two cheers for the Lifeline Reform plan recently drafted by the FCC that shifts the focus of the federal Lifeline program to broadband.  It’s a good move that makes sense in the long term, but it doesn’t have to be done with such haste that it severs the wireless Lifeline now helping millions of low-income residents in rural America.

The problem is that the FCC timetable for shifting Lifeline from a wireless focus to “broadband only” is out of sync with the reality of the availability of adequate broadband in rural America.  The FCC wants to start a phase out of wireless Lifeline almost immediately and then hang up on it altogether in 2019.   After that, Lifeline would only subsidize broadband and landline phone service.

That’s the wrong timetable for rural America.  The FCC’s own data show that as many as 22 million rural Americans lack access to connections to broadband at download speeds of 25 megabits per second (mbps).  The Commission also has reported that one in five rural Americans lacks access at the even slower speeds of 4 mbps.  The access gap is even worse for people living on Native American tribal lands, where the lack of access surges to 63 percent.

While there is much to admire in the FCC’s plan for a $9.25-a-month subsidy focused over time on broadband, the truth is that it probably won’t result in one new mile of broadband cabling in rural America.  All signs are that our communities of non-urban areas will lag for decades when it comes to access to essential broadband.  The FCC knows this and so the unfortunate appearance is that the Commission’s current Lifeline reform plan is a calculated slight to rural concerns.

In less than 45 months the current wireless Lifeline service will vanish.  For rural Americans who have no way to use a broadband subsidy, the demise of Lifeline by 2019 will mean that they are effectively cut out of the program.  Their only sin:  living in rural America.

To make matters even worse for those living in rural America, the FCC wants to impose minimum standards on wireless Lifeline that almost certainly would force a co-pay arrangement for subscribers.  This would make participation in the program burdensome, if not completely unaffordable, for many low-income rural dwellers.    Many of the poorest people with the least access to help live in rural America, these are not consumers who will be able to continue using Lifeline if they have to pony up cash that they just don’t have.

By phasing out wireless Lifeline and offering only a broadband program they can’t access, rural Americans will not be helped by Lifeline reform.  Instead, will we rural Americans become the first and perhaps largest group of disconnected victims of the reforms? I ask the FCC:  What good is Lifeline reform in rural America if broadband is not available now and you are killing wireless service?


By Betsy Huber, President
The National Grange

The National Grange Cert Decision Announcement

Today, the U.S. Supreme Court announced its decision to review the ruling in the long-running design patent infringement case between Apple and smartphone rival Samsung. This important case is about correcting an outdated interpretation of how damages are awarded for design patents in infringement lawsuits.

The lower court’s ruling elevates design patents and ornamental features of a product over utility patents and a product’s functionality. Additionally, the court-awarded damages for infringement could be equal to the total profits earned from the alleged infringing product. These massive damages from infringement could result in total profits – an incentive for troll-like litigation over design patents. For these reasons and their implications on the rural and agriculture industry, the National Grange is thankful the Supreme Court is reviewing this decision.

Unwarranted design patent damage awards make rural consumers particularly susceptible to trolling threats from design-patent abusers. The risks are also much higher for family-owned rural small businesses because jobs, opportunities and progress for these often marginalized communities all rely on their success.

The National Grange applauds the Supreme Court for its review of the case due to the serious implications for rural connectivity under the existing ruling. The ruling, as it stands, makes it tougher for rural entrepreneurs to prosper because it makes access more expensive.

Smartphones, like the ones at issue in this case, provide access to educational resources, health information and direct business-to-customer markets for goods or service as well as employment opportunities. Mobile technology is revolutionizing the manner in which farmers conduct business, allowing farmers to tap into sources on agricultural information, utilize cutting-edge production technologies, undertake entrepreneurial endeavors, reach new customers and run their businesses in ways previously thought impossible.

Rural America and the agricultural industry depend on connectivity even more than most, because our geographical location infrequently overlaps with the initial deployment and availability of new technologies, products, and services. However, mobile connectivity offers and equalizing force which enables rural America to keep pace with the dynamic technology economy of today and tomorrow.

The Supreme Court took the first step in correcting the lower court’s illogical interpretation of these awards. We are hopeful that they will reverse the ruling and offer clarity so that the next design patent infringement case will not pose such a serious threat to rural connectivity, mobile access, and America’s farmers.

Samsung Files Petition for Supreme Court Review

Samsung officially filed a request with the Supreme Court to examine the decision in its long running litigation with Apple. At the crux of the petition is design patents and their legal interpretation in infringement lawsuits, and the damages awarded from alleged infringement.

This is not the first time the National Grange has weighed in on the patent litigation between these two household names. Current legal interpretations elevate design patents and ornamental features of a product over utility patents and a product’s functionality. Additionally, the damages from infringement could result in total profits – an incentive for troll-like litigation over design patents.

If these legal interpretations are left to stand, rural and agriculture industries, businesses, and consumers will lose. The National Grange continues to support Samsung’s appeal to the Supreme Court, and we encourage the high court to accept this case for its docket. Design patent law current interpretations are more harmful than helpful.

Federal Communication Commission Should Encourage Innovation and Private Investment in Rural America

Last week, Congress held a hearing to evaluate proposals and recent actions of the Federal Communications Commission (FCC) and determine how the agency can better serve the public. Both Republican and Democratic members asked all five FCC commissioners questions regarding their work over the past year on a range of issues that impact consumers, from spectrum to broadband deployment. One particular issue that surfaced repeatedly during the hearing was how the FCC can improve its efforts to expand these essential services and resources to rural areas.

Millions of Americans living in rural areas and communities still lack high-speed broadband. Access to higher quality, faster Internet enhances people’s lives by providing more opportunities in education, healthcare, and professional development. It brings communities together and levels the playing field between rural areas, smaller towns and larger urban centers. But more must be done, and the National Grange is a strong advocate for Federal policies that help deliver the online opportunities that those rural areas deserve.

The FCC should learn from successful actions of the past and exercise regulatory caution moving forward. Over twenty years ago, the government embraced a light-touch regulatory approach that enabled the Internet to flourish into the essential modern technology and engine of economic growth and opportunity that it continues to be today. Now the FCC wants to impose outdated regulations onto broadband networks. This approach will inhibit the capital investment necessary for deploying broadband to underserved areas and rural communities that need access to broadband the most.

Consumers in rural America are better served by policies that encourage innovation and private investment so that the marketplace and competitors can provide a variety of choices and innovate, build, and expand to meet consumer demand. It is the sustained investment in expanding broadband networks that enables companies to deliver economic opportunities to rural communities and ensure no one is left behind.

The Grange wants to work cooperatively with government and other stakeholders to ensure regulations have purpose and achieve the goal of meeting the needs of consumers, businesses, and entrepreneurs in rural areas. A heavier regulatory hand that saddles the Internet with regulation of the old Bell system threatens to undermine the very innovation and investment that produces benefits. A light-touch policy is a smart approach to getting all of America – particularly rural communities – connected once and for all.

Federal Appeals Court Makes Disappointing Decision on Patents

On August 13 – the U.S. Court of Appeals for the Federal Circuit denied a petition for rehearing en banc in the Apple-Samsung patent dispute. The National Grange has closely followed this lawsuit for its impact on Grange members’ access to advanced telecommunications technologies. Last month we filed an Amicus brief urging the court to reconsider the $399 million penalty imposed for alleged design patent infringement covering basic shapes.

The Court’s decision yesterday is a blow to industries and consumers. The decision itself was no more than a paragraph and ignores several industry briefs that were filed in response to the hearing en banc, including one from the Grange. As the law currently stands, a design patent infringement can result in the infringing entity being liable for the total profits earned on the product in which the design is incorporated regardless of the importance of the patented design. This is a far cry from reasonable royalty damages used for utility patents, meaning that an infringer is liable only for damages correlating with the patent(s)’ contribution to the overall product.

As we explained in our blog, the current interpretation of design patent law (Section 289 of the U.S. patent code) opens the door for businesses and individuals to seek outsized settlements for design patents, further incentivizing trolling and patent assertion. The federal court has had several opportunities to update its interpretation of Section 289, but now it’s possible the issue could go before the Supreme Court. Without clarification, design patents could become the new target for trolls and ultimately impact consumers, particularly those in rural areas where access and price for technology is critical.

Spectrum Need

Ed+Luttrell_PROFILEThe United States is experiencing a “Mobile Revolution”. Experts predict that by 2020 the number of connected devices will reach 50 billion.

The “Mobile Revolution” is changing how Americans communicate and manage nearly every aspect of daily life. These advancements have made life easier, more enjoyable, and more productive for the millions who have embraced these innovative technologies. Among those who are embracing and relying on wireless broadband services at an increasingly rapid pace – although often over looked – are farmers, ranchers, and others who make up our rural communities.

Mobile broadband connectivity has become an increasingly important part of life for rural America. Many farmers rely heavily on applications to provide critical weather and crop information while access to high speed wireless services and products allow rural Americans to have greater access to telemedicine, educational opportunities, and provide vital connections to public safety.

Congress is currently considering legislation to reallocate spectrum from the federal government for commercial use by mobile broadband providers. In fact, on July 19 the Senate Committee on Commerce, Science, and Transportation held a hearing titled “Wireless Broadband and the Future of Spectrum Policy” .

Hearings such as this are important stepping-stones for ensuring future mobile broadband connectivity and creating solid public policy that allows all Americans to take full advantage of mobile technologies now and in the future. With the emerging Internet of Things (IoT) and the majority of consumers opting for the latest smartphones, tablets, or other connected devices – mobile broadband providers are facing a swiftly approaching spectrum shortage.

This is cause for concern for all Americans but particularly for our rural communities. Spectrum is critical to expanding high-speed mobile broadband and the demand for spectrum has never been higher. It’s estimated that wireless Internet traffic in North America is expected to grow more than 41-fold from 2011 to 2016, which is why it’s so critical for Congress to infuse more spectrum into the commercial market.

We are facing this shortage because the federal government is sitting on an overwhelming majority of spectrum. However, clearing and deploying new spectrum takes years, so in order to ensure a steady stream of spectrum to meet consumer demand, we have to begin now.

Repurposing spectrum held by the federal government for commercial use will generate significant economic activity. The Federal Communications Commission recently concluded a spectrum auction, which raised a groundbreaking $45 billion, money that’s used to reduce our growing national deficit.

The National Grange believes high-speed mobile broadband will dramatically improve life in rural America. It will create opportunities for young Americans to pursue their interests in rural America, while remaining connected with the entire globe. It will aid our older citizens to remain healthier and independent in their golden years. We must pursue all available options to provide the same high-speed wireless access seen in suburban communities to rural America.

Now is the time for congress to pass legislation that creates a long-term and predictable future for releasing valuable spectrum in order to meet the growing consumer demand for wireless technology.

Washington’s Overlooked Barrier to Internet Access

A growing consensus is emerging in Washington about the necessity of reliable access to the Internet and online resources. Last week, in front of a packed auditorium in the capital of the Choctaw Nation, President Obama unveiled the ConnectHome initiative, which aims to provide high-speed internet to some 200,000 rural and low-income families. The month prior, Congressional leaders introduced the Digital Learning Equity Act, seeking to rollout greater out-of-school Internet access for students through Department of Education grants.

As the Internet has fast become the bedrock of commerce and communication, such efforts are critical to ensure a level playing field for businesses and communities, especially those in the rural pockets of the country.

Congress has been spinning its wheels trying to address utility patent trolls, yet they’re ignoring the looming threat of design patent trolls that have seen a catalyst from recent court decisions. Specifically, recent interpretations of Section 289 of the U.S. patent code have opened the door for businesses and individuals to seek outsized settlements for design infringements, which could further incentivize patent trolling and predatory patent litigation.

In May of this year, without any analysis of the importance of the patented designs, the Federal court ruled that an entity that infringes on a patented design could be held liable for all the profits earned from the product in which the design is incorporated. This can lead to the absurd scenario in which an unwitting infringer could be forced to pay their full profits several times over if they intrude on more than one protected design. Given that many products, especially high-tech devices incorporate numerous patented components, the outcome is untenable.

Consider, for example, a situation in which the manufacturer of a tractor might be forced to pay all his or her profits from the equipment because it infringed on a patent covering the design of the fender. The manufacturer might then be required to pay the same amount to a second patent holder with the rights to the wheel design. It quickly becomes a race of who can bleed them dry first.

This multiple damage scenario is particularly likely to occur when a single product contains different patented features held by several owners. It’s not difficult to see how soon the tractor manufacturer has little incentive to produce the equipment at all.

The potential infringement claims don’t stop at the manufacturer. It can trickle down to the store selling the tractor as well as tractor owners – who frankly aren’t purchasing tractors based on fender or wheel design, yet could be paying large sums for operating the infringing machinery. This domino effect is thanks to the “make available for sale” provision in Section 289, which shares blame with those selling an allegedly infringing a product. Under this interpretation, if a farm operator purchased equipment or tools that have infringing design patents on them online from a company like eBay or Amazon, does this then make eBay or Amazon liable for “exposing the sale” of products that infringe on design patents, even if for a minor feature? If this is the case, this will have a chilling effect on these necessary business models that provide rural customers access to a wide range of products difficult to obtain locally.

The dilemma is particularly troublesome for technology providers, and thereby for the individuals who rely on the devices they create to access the Internet. A recent Pew Research study found one in five American adults rely on their smartphone as their primary, and often only, access to the internet. In rural parts of the country still lacking adequate broadband infrastructure, it’s not uncommon that a smartphone serve as their sole connection to the Internet. Barriers that hamper development of new devices obstruct their access to online resources.

Because smartphones and other modern appliances utilize many patented technologies – the iPhone, for example, hundreds of patented elements – developers face the risk of paying out their full profit for intruding only a few discrete features, as was a court’s decision in a recent case between Apple and Samsung. With such sizable consequences, companies may well forego developing new technologies for fear it will end up costing them.

Simply put, infringement penalties should fit the scope of the infringement. One wouldn’t expect the tractor manufacturer to give up all his or her profits because of a bumper design. That shouldn’t be the case in the U.S. technology markets either.

As early as late nineteenth-century, the National Grange has advocated the risks in design patent law. In 1879, our organization cautioned about emergence of “patent sharks,” some of earliest predatory patent abusers, which patented designs on crowbars, hoes and other tools and then demanded to be paid by others in the agricultural industry. In the Apple-Samsung case [CLICK HERE TO VIEW BRIEF], the National Grange filed an Amicus brief urging the court to reconsider the outsized $399 million penalty imposed because the ruling’s implications for modern day tools – tools that are helping to close the digital divide.

In response to the courts’ failure to curb patent litigation abuse, for the past year, Congress has been debating various patent reforms. In the case of design patents, it looks like the court has again failed to interpret the law reasonably and indeed laid the groundwork for additional frivolous litigation. While we filed a brief calling on the Court to revisit this issue, if Court denies a rehearing or fails to set a reasonable standard for the award of total profits, Congress should turn some attention to the issue of design patents and provide much-needed guidance to the courts.

Medicare Part D Rebates

The National  Grange has joined a large number of patient health and elderly care organizations on a letter to the U.S Congress opposing proposals to weaken programs for seniors and persons with disabilities.  One of these proposals would mandate rebates on Medicare’s Part D drug program.  But these are not rebates to patients as one might assume.  This money would be treated as a tax paid by drug manufacturers direct to the Federal Government with no resulting new drug development or lower patient prescription costs.  Click here to read Medicare Part D letter to Congress

Postal Service Cuts Causes Rural Concerns

Despite three cautionary reports by the Postal Regulatory Commission, The Postal Service’s Office of Inspector General, and an internal management report, the U.S. Postal Service has moved ahead to reduce its service standards for First-Class Mail.  These new policies will create a two-tier network with service to rural areas and small towns downgraded much more than large urban areas.  Several state and local Granges are objecting to the Postmaster General with copies to their Senators and Representatives.  Click here to read Op-Ed by Commissioner Ruth Y. Goldway