The pace of broadband progress and how it's measured sparked further divisions on the FCC Telecom Act Section 706 inquiry into whether advanced telecom capability (ATC) is being deployed in a reasonable and timely way. Many comments were posted Tuesday in docket 18-238, including over fixed and mobile service distinctions (see 1809170044). Telco and cable incumbents generally said broadband-like ATC is being rolled out adequately, and 5G wireless will bring new advances. Rivals and others cited shortcomings and urged the agency to increase its ATC speed benchmark. The FCC's last 706 report made a positive ATC determination, kept a 25/3 Mbps fixed benchmark and concluded mobile isn't a full substitute for fixed (see 1802050002). Broadband investment and deployment are robust, in part due to light-touch regulation, commented USTelecom. AT&T and Verizon also hailed ATC buildout. AT&T said "mobile broadband is a functional substitute for fixed broadband," and Verizon said providers "stand at the precipice of game-changing 5G network deployments." CTIA called mobile broadband deployment reasonable and timely. NCTA and the American Cable Association urged a positive ATC determination, and they, ITTA, the Wireless ISP Association, Adtran and others backed maintaining the 25/3 Mbps fixed standard. Despite the progress, incumbents said the regulator could do more to spur broadband, but Common Cause and Public Knowledge said recent FCC actions "widened the digital divide." The Communications Workers of America said the pace of broadband deployment isn't reasonable and timely, with more than 24 million Americans lacking access and more lacking high-speed wired connections. Incompas said it's "time to be bold" and raise the benchmark to 1 Gbps, while CWA and others backed 100 Mbps. CWA, Incompas, WISPA, ITTA, rural groups and others said mobile isn't an adequate substitute for fixed. NTCA said only existing, not possible future, services should determine the ATC finding. The Fiber Broadband Association urged a focus on "all-fiber connectivity" and a "holistic approach" factoring in service reliability and latency. ViaSat and SES Americom plugged satellite broadband. New America's Open Technology Institute, Microsoft and others said Form 477 broadband data is flawed and sought fixes and use of other sources. Free Press urged inclusion of data from Puerto Rico and other storm-struck areas and said the FCC should "abandon" proposals to "gut" Lifeline USF. The National Digital Inclusion Alliance cited broadband adoption and affordability as critical and voiced concern about "evidence of AT&T's digital redlining."

The New Mexico Public Regulation Commission unanimously adopted an amended USF form and instructions to be used on a trial basis from Oct. 1 to year-end as the state transitions to a connections-based contribution method (see 1808220040). The PRC may decide to amend the documents in 2019, said the Wednesday order in docket 17-00202-UT.

The hold Sen. Dan Sullivan, R-Alaska, placed on FCC Commissioner Brendan Carr’s reconfirmation is a temporary roadblock that will further delay securing Carr for a full five-year term ending in 2023 and unlikely to completely derail a vote this year, lawmakers and lobbyists said in interviews. Sullivan told us Wednesday night he placed the hold on Carr because of his continued concerns about FCC handling of the USF Rural Health Care (RHC) Program under Chairman Ajit Pai (see 1809120056). Confirmation of Carr and FCC nominee Geoffrey Starks has stalled repeatedly since Senate Commerce Committee Chairman John Thune, R-S.D., first tried to fast-track the two in June (see 1808230040).

The FCC proposed a USF contribution factor of 20.1 percent for Q4, up from Q3's 17.9 percent, of U.S. interstate and international telecom end-user revenue, said an Office of Managing Director public notice Wednesday in docket 96-45. The proposal will take effect if the commission takes no further action within 14 days. It's the first time the factor will exceed 20 percent (see 1808310047). USF demand has trended up and the industry long-distance revenue base has trended down, producing a rising contribution factor over time, though variables cause some quarterly fluctuations. Commissioner Mike O'Rielly, who chairs a federal-state joint board, opposes any USF assessment of growing broadband revenue, which he says state joint board members favor (see 1802060028). “As accessible telecommunication revenues continue to decline the universal service fee necessarily increases," emailed State Joint Board Chair Chris Nelson of South Dakota. "In 2014 the FCC referred the question of Universal Service Fund contribution methodology to the Universal Service Joint Board for a solution to this unsustainable increase in the fee percentage. At that time the percentage was 16%, now it tops 20%. This is no surprise. The State Members of the Joint Board have a proposal to solve this and other issues with the contribution methodology. Failure to act will only see the fee continue to rise.” An FCC spokesperson and O'Rielly's office didn't comment.

Stakeholders backed possible FCC creation of a "connected care everywhere" pilot program, diverging on some details such as the proposed focus on facilities-based projects and rural areas. Some telecom entities urged the agency to include resellers; some healthcare parties sought inclusion of projects in urban areas; and other pushed for consideration of their particular industry or patient interests. About 70 substantive comments were posted through Tuesday in docket 18-213 in response to a notice of inquiry adopted Aug. 2 (see Notebook at end of 1808020034).

Sen. Dan Sullivan, R-Alaska, placed a hold on FCC Commissioner Brendan Carr’s reconfirmation for a full five-year term ending in 2023 over the senator’s continued concerns about the agency’s handling of the USF Rural Health Care Program under Chairman Ajit Pai. Confirmation of Carr and FCC nominee Geoffrey Starks has been stalled repeatedly in recent months. Senate Commerce Committee Chairman John Thune, R-S.D., and others point to larger political factors as the major hurdle.

Comments are due Oct. 5, replies Oct. 22 on the National Exchange Carrier Association's proposed modified USF formula for 2019 "average schedule" rate-of-return telco high-cost loop support said an FCC Wireline Bureau public notice in docket 15-337 in Thursday's Daily Digest.

Government should directly fund "infrastructure needs," not last-mile carriers, to promote rural broadband and close the digital divide, said Public Knowledge Thursday. It cited a new Broadband Connects America coalition of 18 groups that also include the Benton Foundation, Institute for Local Self-Reliance, National Hispanic Media Coalition and X Lab. "Rather than repeat the design" of the FCC high-cost USF program, "new funding should take advantage of the ability to divide the supply chain into different components such as towers, fiber, conduit, as well as services such as 911 and packet routing," said the coalition's principles. "Directing funding to shared infrastructure instead of particular carriers would allow federal and state governments to target dollars where needed to ensure efficient deployment of infrastructure that could serve multiple carriers -- rather than limiting funding to one carrier per community." It said the shift in focus "would reduce the cost of providing service to rural areas" for carriers and "is not meant to include funds that are directed towards specific users such as Lifeline, E-rate, or the Rural Health program." Other principles include "a combination of approaches that reflects the complexity" of rural broadband challenges and "restoring net neutrality."

The USF contribution rate will increase from Q3's 17.9 percent to 20.1 percent in Q4, exceeding 20 percent of carriers' U.S. interstate and international telecom end-user revenue for the first time in USF history, industry consultant Billy Jack Gregg emailed Friday. Universal Service Administrative Co. projects USF-applicable telecom revenue for Q4 to be $12.41 billion, down $545 million from Q3 and the lowest USF quarterly revenue base ever, he said. That lower revenue base, plus the previously announced USF quarterly demand of $2.06 billion, is what's driving the high USF contribution factor, he said. Total USF demand for 2018 will be $8.065 billion, up $147 million from 2017 but $1.47 billion less than the peak annual USF demand during 2012, he said. USF demand has hovered between $8 billion and $9 billion annually since then because of a 50 percent decline in low-income fund demand, a 48 percent decline in schools and libraries fund demand, and use since 2015 of unused schools and libraries fund to offset annual demand for that fund, Gregg said. Total USF revenue for 2018 will be $51 billion, also the lowest in USF history, and down $25.2 billion from the 2008 peak, he said.

FCC Republicans Ajit Pai, Mike O’Rielly and Brendan Carr have voted together the vast majority of the time. Carr partially dissented once and has been mostly in step with Pai since he became a member a year ago. O’Rielly, a commissioner throughout Pai's chairmanship, has disagreed more, based on our review. O’Rielly has had partial dissents 12 times and a full dissent once.