Telcos urged the FCC to give RLEC near-term broadband relief from USF contributions, but consumer advocates said the commission should assess all broadband service in an overhaul of the system funding the subsidy program. USTelecom and NTCA noted no opposition (see 1709140052) to their petition for temporary forbearance from application of USF contribution requirements to rural carrier broadband internet transmission services until the agency settles how all broadband services should be treated. "Commenters agree that the disparate treatment amongst broadband internet access service providers when it comes to federal USF contribution assessments highlights the need for USF reform," they replied in docket 17-206 Thursday. The Eastern Rural Telecom Association also backed the petition: "To not grant temporary forbearance would mean a continuation of this discrimination of this subset of RLEC broadband customers." The National Association of State Utility Consumer Advocates noted there were only three initial comments and said it agreed with the Pennsylvania Public Utility Commission's view that contribution "reform" is needed. "All carriers’ broadband services should contribute to the USF, especially now that all the USF programs support broadband, and support for voice service is being phased out," NASUCA said. "The upcoming USF contribution factor will be 18.8% [of carrier interstate and international end-user telecom revenue], the highest ever, largely because of the low level of assessable non-broadband revenues. Rather than forbear from having the [rate-of-return] carriers contribute, the Commission should expeditiously extend the contribution requirement to all providers of broadband services." The group said RLEC relief "can't reasonably be granted, if at all" until the FCC receives a federal-state joint board recommendation.

The Senate invoked cloture Thursday on FCC Chairman Ajit Pai's reconfirmation 55-41. It begins a long-expected floor debate in which Democrats strongly criticized the commission's proposed rescission of 2015 net neutrality rules, Sinclair's proposed buy of Tribune and other controversial policy matters (see 1709150060). Forty-nine Senate Republicans and six Democrats voted in favor of invoking cloture on the Pai debate, confirming expectations the Democratic caucus wouldn't be fully unified. At least four of those Democrats told us they are planning to support Pai again when a final confirmation vote occurs Monday.

Connections-based USF contribution in Nebraska would be more stable than a revenue-based mechanism because “connections, regardless of technology or revenue trends, are essential for telecommunications,” Windstream replied Tuesday in Nebraska Public Service Commission docket NUSF-100. The company rejected Charter arguments from last week that the PSC shouldn't overhaul its contribution method based on unproven assumptions that revenue may decline forever and that the number of wireless connections will continue to grow (see 1709210038). A Nebraska group of rural independent phone companies rejected warnings by Charter and CTIA about the move to connections. “No amount of revisionist arguments … can change the fact that remittances to the NUSF have steadily and materially declined, or … that the only means to stabilize remittances generated by the current revenue-based mechanism is to increase the surcharge percentage," the rural carriers replied. The PSC is unwilling to increase the surcharge, so contribution must change to a connections-based mechanism, they said. Charter disagreed: “There are serious obstacles to implementing a connections-based approach successfully.” The PSC lacks authority because the FCC gives states authority only over intrastate revenue, and a connections-based mechanism “by its nature is unrelated to intrastate revenue,” the cable company said. Rural carriers want to switch to avoid a cap on revenue-based surcharge, Charter said: Rural carriers support “a new methodology so [rural carriers] can argue (in a later phase) for a larger fund.” Cox, which earlier outlined its terms for changing contribution methods, clarified that it never fully supported an overhaul. Cox said it asked the PSC "to make this change be as simple as possible, [but] it doesn't negate or lessen Cox's concern with Nebraska experimenting with the implementation of a new and untested methodology.” Business customers with many lines might bear an unreasonable burden under connections-based USF if the PSC uses FCC Form 477 data, which doesn’t adequately identify high-capacity facilities, replied the Association of TeleServices International.

Commissioners Mignon Clyburn and Jessica Rosenworcel slammed the 2017 version of the FCC’s mobile wireless competition report, approved 3-2 Tuesday in a party-line vote. Both questioned whether wireless in parts of the U.S. is genuinely competitive. During the Obama administration, the FCC repeatedly declined to determine there's effective competition in the U.S. wireless market. The new report says there is. The disagreement was expected and has been a topic of contention between Republicans and Democrats (see 1709220049).

The FCC invited input on the sufficiency of budgets for E-rate Category Two services, which provide broadband access within schools and libraries at a discount under the USF subsidy program. Comments are due Oct. 23, replies Nov. 7 on how applicants, service providers and others have used their budgets, and the percentage of purchased Category Two services that are being covered by the budgets, said a Wireline Bureau public notice in docket 13-184 and Monday's Daily Digest.

Free Press is increasing its opposition to FCC Chairman Ajit Pai amid perceptions that a Senate floor vote on Pai’s reconfirmation could happen as soon as late this week, two communications sector lobbyists said Monday. Senate Republican leaders have been hoping to invoke cloture on the Pai confirmation vote before the upcoming Columbus Day recess, with up to 30 hours of floor debate ahead of a final vote (see 1709130054 and 1709150060). Free Press is collecting signatures on a petition urging the Senate to “fire” Pai when his confirmation comes up for a vote. “He's failing at his job” and “that means we need the Senate to fire him,” the petition said. “Not a single senator should support” Pai’s agenda. The group cited possible rescission of 2015 net neutrality rules, ongoing concerns about the FCC’s handling of Sinclair, and the debate over the Lifeline USF program. The FCC didn’t comment.

NTCA asked the FCC to begin a "comprehensive' high-cost USF budget review by year-end as contemplated since a 2011 overhaul, and to collect the current budget amount near term. If such collection exceeds current USF demand, the FCC should "use the additional sum to mitigate the shortfalls in support that are being applied only to smaller rural carriers," the RLEC group said. The requests came in a filing Wednesday in docket 10-90 on discussions with aides to Chairman Ajit Pai and Commissioner Jessica Rosenworcel. NTCA asked the FCC "to use any high-cost USF reserves that have not already been expressly allocated pursuant to Commission order to fill the budget shortfall." Once a budgetary review is completed, "the Commission can then make informed, updated judgments about the 'right size' of the high-cost USF budget," it said.

Industry cautioned Alaska and Nebraska regulators about their state USF revamps, in comments posted this week. At the Regulatory Commission of Alaska, AT&T and rural phone companies said a proposed short-term fix should be temporary and the RCA should launch a more comprehensive proceeding. In Nebraska, wireless carriers asked the Public Service Commission not to proceed with a proposed shift to connections-based USF contribution.

FCC Commissioner Mike O'Rielly said he generally favors giving RLECs more USF support through both legacy and model-based mechanisms, including by potentially tapping high-cost reserves. "It does appear that some amount of reserve funding could be available, particularly in the short-term," he said at an WTA conference in Coeur d'Alene, Idaho. "While it may not provide all the relief sought by affected carriers, it could benefit consumers and carriers in areas more difficult to serve." O'Rielly said the FCC's $4.5 billion high-cost budget, about $2 billion of which goes to rate-of-return carriers, is due for review under a 2011 overhaul order. "If the Commission does nothing, I’m told that the budget expires, any reserves that have not been committed are used to reduce the contribution factor, and funding for the program would be based solely on demand in any given quarter," he said. "That is not an acceptable outcome." He noted he backed firm USF budgets or caps, including on Lifeline: "We cannot, at the same time, allow the high-cost program to operate without its own budget control." He said the FCC may need to consider a temporary extension of the current budget and reserve policy. He noted the agency is considering revising its access recovery charge imputation rule, and he hopes it "resolves this and other pending issues soon, including specifying in more detail which expenses are not recoverable" under regulatory mechanisms. He couldn't support expanding the USF contribution base to broadband users, absent congressional direction. He wouldn't be surprised to see a net neutrality decision "later this year" and hoped broadband infrastructure deployment proceedings would "bear fruit" in coming months.

Senate Homeland Security Committee leaders followed up, as promised (see 1709140059), with the FCC and Universal Service Administrative Co. to urge both to initiate forensic audits of the top 30 companies certified as Lifeline USF program eligible telecom carriers. Chairman Ron Johnson, R-Wis., said last week during and after a hearing on problems with Lifeline that he wanted the forensic audits as a way of pinpointing program abuses. “By taking this immediate action, you will identify actual waste, fraud, and abuse to support appropriate enforcement actions and make necessary policy changes to protect taxpayer dollars,” Johnson and ranking member Claire McCaskill, D-Mo., said in a letter to FCC Chairman Ajit Pai and USAC acting CEO Vickie Robinson. “When deciding how to initiate these audits, whether through third-party auditors or other means, we request you take every reasonable step to minimize the cost to taxpayers.” The lawmakers asked Pai and Robinson to follow up by Oct. 13 on how they plan to proceed. The FCC and USAC didn't comment.