Broadband reclassification is once again haunting the FCC’s proceedings, this time as rural telcos seize on broadband’s Title I status to lobby on Universal Service Fund reforms. The commission elected to take a Title I approach in its net neutrality order (CD Dec 2 p1), but in recent weeks, executives of rural telcos have begun to argue that proposals to roll universal service cash into a Connect America Fund for broadband will raise “a host of legal and practical complications” under Title II (CD May 9 p13).
Small carriers, wireline and wireless, opposed to reverse auctions as part of Universal Service Fund overhaul could be fighting a losing battle in an effort to reverse a move in that direction by the commission. FCC Chairman Julius Genachowski appears to have at least three votes in favor of a controversial reverse auction plan, FCC and industry officials said.
Lobbyists from rural telcos pressed their case for reform of the Universal Service Fund and the intercarrier compensation regime at the FCC last week, the groups said in an ex parte notice posted to dockets 10-90 on Friday. Representatives from OPASTCO, the Western Telecommunications Alliance, National Exchange Carrier Association, NTCA and from Fred Williamson Associates met with Zac Katz, adviser to FCC Chairman Julius Genachowski, Wireline Bureau Chief Sharon Gillett and other staff from the Wireline Bureau. They pushed the reforms in comments in the USF and intercarrier comp dockets (CD April 19 p3), which they said would meet the commission’s objectives of fiscal responsibility, accountability and modernization, “while at the same time preserving the core tenets of a rate-of-return framework that has proven strikingly effective and efficient in enabling substantial rural broadband penetration (and upgrades to existing plant) in recent years at a minimal (3 percent) annualized growth rate in support.” The rurals said their proposal would also avoid “legal and practical complications” around Title II. “Given that the Commission has previously concluded that broadband Internet access services are non-regulated and thus not subject to Title II requirements, a host of legal and practical complications would arise in attempting to identify and address non-regulated costs and revenues without any structure to define the proper accounting of them or to ensure the just and reasonable nature of them -- which, by definition, means they will need to be in some form ‘regulated,'” the lobbyists said in their ex parte notice. It’s “unclear which non-regulated services might be included” in USF reform, but the rural plan “would establish a support mechanism for broadband-capable networks that works within and is entirely consistent with the plain language of Section 254, the Title II regulation of transmission networks, and the Commission’s prior determination to classify broadband Internet access service as a non-regulated service."
FARMINGTON, Pa. -- The NTIA has convened a working group to formulate the Obama administration’s position on pending Universal Service Fund changes, NTIA Administrator Larry Strickling said at an FCBA conference over the weekend: “The issue is important enough that the White House should have its own position on that.” The work group is led by John Morabito, head of the NTIA Office of Policy Analysis & Development, Strickling told us Saturday.
Public safety spending on 700 MHz D-block lobbying more than quadrupled in Q1 2011 compared to the same quarter last year, according to Q1 lobbying reports. The Association of Public-Safety Communications Officials spent $80,563, 303 percent more than what the group spent in Q1 2010 and 66 percent more than Q4 2010. Meanwhile, the National Telecommunications Cooperative Association spent nearly five times what it did last year, and NTCA CEO Shirley Bloomfield said she expects the association of small rural telcos to continue spending at that level.
The FCC should “immediately” tackle phantom traffic and traffic pumping but should provide “careful transitions” as it reforms the Universal Service Fund and intercarrier compensation regimes with “great care,” USTelecom said in comments posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109. “Until targeted universal service support provides sufficient explicit funding for networks in high-cost areas, any mandated rate reductions must be coupled with a reasonable opportunity for providers to replace the revenues lost … through a combination of increased retail rate flexibility and a supplement fund,” USTelecom said. USTelecom is leading talks to try to come up with an industry-wide reform. But the commission has made clear that it wants to move to orders on USF and intercarrier comp distribution by the end of the summer. “Intercarrier compensation reform must be accomplished by providing opportunities for carriers to replace lost revenues in order to allow the continuation of support for networks, particularly those in high-cost rural areas,” USTelecom said in Monday’s comments.
MOUNTAIN VIEW, Calif. -- The FCC aims to adopt a universal service overhaul by August, Chairman Julius Genachowski said. “Over the next few months, we'll be able to significantly reform this program,” he said Thursday night at the Commonwealth Club civic forum. Genachowski mentioned the Universal Service Fund (USF) more than intercarrier compensation. But the matters are intertwined in a February rulemaking notice and a blog post last month by the commissioners that he discussed.
The FCC has many tools at its disposal to tackle spectrum constraints, whether it’s improving spectrum efficiency or freeing up more spectrum, Wireless Bureau Chief Ruth Milkman said at the Wireless Communications Association conference. The commission is looking at spectrum sharing and harmonization opportunities, and is willing to work with industry to come up with a solution to better inform consumers on throughput, she said Wednesday. It takes time to bring spectrum to auction, so “we have to start now” to avoid a spectrum crunch that will result in poor quality of service for consumers, Milkman said.
A dismal budget climate shouldn’t preclude support for broadband in tribal lands, Sen. Daniel Inouye, D-Hawaii, said at a Senate Commerce Committee hearing Tuesday. Inouye, the Appropriations Committee’s chairman, signaled that he would support increased FCC funding for that purpose. Advocates for Native American communities sought additional broadband funding, including through the Universal Service Fund and a new Native Nations Broadband Fund.
AT&T and USTelecom are trying to revive dormant efforts to create an industry-wide proposal on Universal Service Fund and intercarrier compensation regime reforms ahead of the FCC’s rigid schedule, multiple industry officials told us. Similar efforts have foundered in the past -- including a concerted attempt in 2006-07 -- but this time, “I think there is a possibility for a very broad industry coalition on this,” said USTelecom Vice President Jon Banks. “The FCC knows we're trying to do this,” he added. “Everybody -- ILECs, CLECs, cable wireless, rurals -- is trying to put together a path for the FCC to follow.”