The Nebraska Court of Appeals dismissed CTIA’s lawsuit against the Nebraska Public Service Commission, as expected (see 1808080022). In an order forwarded to us this week, the court allowed an industry stipulation to resolve the state USF case. The association sued the Nebraska PSC over last year’s order to pursue a connections-based contribution mechanism but was expected to drop its appeal after the PSC revised certain definitions (see 1807250053).

There's "no basis" for the FCC to treat model-based rate-of-return telcos differently than price-cap carriers on "TDM transport," as an NPRM on rural carrier business data services proposed, said a filing on a meeting ITTA, USTelecom, TDS Telecom, Great Plains Communications, Hargray Communications and Consolidated Communications executives had with Wireline Bureau Chief Kris Monteith and aides, posted Monday in docket 17-144. The telcos said "competitive disparity" with unregulated competing transport networks "hamstrings model-based rate-of-return carriers' ability to price transport appropriately" in markets. Eliminate ex-ante regulation of such RoR carriers' TDM transport, just as the FCC did for price-cap carriers, they asked. They also met with an aide to Chairman Ajit Pai to seek BDS relief. Some pressed for "fully funding" model-based and legacy RoR USF mechanisms in meetings with the Pai aide, Monteith and staffers (here, here).

Nokia slammed Huawei for comments the Chinese company made in an Aug. 6 filing on an FCC proposal to bar USF support for products from companies seen as posing a national security threat (see 1808080021). Huawei said in the filing that other equipment providers serving the U.S. market, including Nokia, also have ties to China. “Huawei claims that Nokia has ‘deep ties’ to the Chinese government and that these ties are ‘(at least) equally strong’ to those of Huawei,” the Finnish equipment maker said in docket 18-89. “This is pure sophistry. Nokia is a well-known, publicly traded company with a 153-year heritage of market leadership, ethical business conduct, and trustworthiness that is without peer in our industry.” Of its China-based joint venture Nokia added, "Nokia itself remains in complete control of the decision making." Nokia said it has never been accused of being “influenced inappropriately by any government anywhere.” Huawei didn't respond.

Federal judges blocked, for now, FCC restrictions on enhanced tribal Lifeline subsidies that bar resellers and residents of non-rural areas from the extra low-income USF support. The commission's 2017 order "will be stayed pending further [court action] insofar as the Order purports to limit eligibility for the Tribal Lifeline enhanced subsidy to 'facilities-based' service providers, and to limit eligibility for that program to 'rural areas,'" said the Friday ruling by a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit in National Lifeline Association v. FCC, No. 18-1026, and a consolidated case. They said petitioners showed a "likelihood of success on the merits" of their challenges, and that they'll suffer "irreparable injury absent a stay." Some said the decision further complicated an FCC proposal to ban resellers from Lifeline support in general.

Comprehensive review of Alaska USF will start by June 30, 2021, under an order adopted Thursday by the Regulatory Commission of Alaska in docket R-18-001. Commissioners voted unanimously for a proposed Alaska USF revamp that’s based on a plan by the Alaska Telephone Association (see 1805300054). The revised rules, which cap the revenue-based USF surcharge at 10 percent, would sunset after June 30, 2023. The RCA started working through details of the plan Wednesday (see 1808080022). “My main priority is to kill the existing construct as soon as possible,” said Commissioner Robert Pickett, who led RCA’s work on the matter. “Quite frankly, the existing construct is just so far out of whack with the reality of the telecommunications industry in this state, it’s unbelievable.” Pickett won’t be on the commission in 2021, “but I would hope that the commission and the industry at that point in time will take a clear-eyed look at what is actually happening, particularly in rural Alaska.” Addressing contribution is key if AUSF still exists after 2023, he said.

Incumbents and competitors in Puerto Rico and the U.S. Virgin Islands disagreed over how the FCC should divvy up USF support for the islands' hurricane-hit telecom networks. Puerto Rico Telephone Co. (PRTC or Claro) and Virgin Islands Telephone (Viya) urged targeting funding to their networks, but their rivals backed a competitive process to spread fund around. Reply comments were due Wednesday in docket 18-143, responding to initial comments on an NPRM proposing $889 million in "Stage 2" subsidies for fixed services (over 10 years) and mobile services (over three years): $698 million for Puerto Rico ($444.5 million fixed, $254 million mobile) and $191 million for the Virgin Islands ($186.5 million fixed, $4.4 million mobile). The notice was attached to an order (see 1805290028) that allocated $64 million in "Stage 1" for near-term network restoration (see 1808080011).

Huawei Technologies attacked the Telecommunications Industry Association's defense of an FCC proposal to bar USF subsidy support for products from companies seen as posing a national security threat. TIA's reply comments "misrepresent the record, are full of distortions and unproven accusations against Huawei, and fail to confront the statutory, administrative, constitutional, and factual deficiencies" in the proposed "national security blacklist," said Huawei's 50-page filing posted Tuesday, in docket 18-89, with 401 pages of exhibits. "As an example, TIA’s hodgepodge of reasons that the Chinese Government allegedly has undue influence over Huawei arbitrarily rests on speculation and is belied by both the law and the facts. As another example, TIA completely ignores both the statutory limits on the Commission’s USF authority and the lack of expertise in and responsibility for national-security issues that are necessary for any rulemaking in this context." TIA's comments and reply in the proceeding represent the TIA Public Policy Committee's views, noted Huawei, citing TIA footnotes. "The composition of that committee is undisclosed. Even Huawei, which is a member of TIA and has a representative on the board, has not been informed of the identity of the committee members." TIA's comments weren't "reviewed or approved by all of its members, or even by all members of its board," Huawei said. "While TIA claims that it submitted comments 'on behalf of its membership comprising hundreds of global manufacturers and vendors of ICT equipment and services,' ... this contradicts its own statements in the footnotes cited above, and it is not clear that its comments here are supported by more than a handful of such companies. TIA continues to refuse to disclose the identity of its members or other entities backing its Comments, who may be competitors of Huawei." TIA said Wednesday it's still reviewing Huawei’s filing. "That said, all commenters in this docket agree that protecting U.S. telecommunications networks is critical," emailed a spokesperson. "TIA continues to support the Commission taking carefully targeted action to address this pressing national security issue."

The FCC announced allocation of an initial $64.2 million in extra USF support to help telecom providers restore broadband and voice service in hurricane-ravaged Puerto Rico and the U.S. Virgin Islands. Providers will receive $51.2 million in Puerto Rico and $13 million in the Virgin Islands, with 60 percent going to fixed network operators and 40 percent to mobile network operators in both jurisdictions, said a Wireline Bureau public notice in docket 18-143 and Wednesday's Daily Digest. The top recipients are: Puerto Rico Telephone (Claro), $16.4 million of fixed and $5.7 million of mobile support; AT&T, $1.65 million in conditional fixed support and $12 million in mobile support spread over both jurisdictions; Liberty Cablevision, $11.1 million in conditional fixed support in Puerto Rico; Virgin Islands Telephone (Viya), $6.9 million in fixed support, and Vitelcom Cellular (Viya Wireless), $126,576 in conditional mobile support; T-Mobile, $4.4 million, and PR Wireless, $3 million, in mobile support in Puerto Rico; and WorldNet Telecom, $1.3 million in fixed support in Puerto Rico. Providers receiving conditional support must show in two months they have received relevant eligible telecom carrier designations. The short-term funding was part of a May order and NPRM proposing $900 million in additional and repurposed USF support for the islands over the mid-to-long term (see 1805290028). Hughes Network Systems said initial comments on the NPRM "overwhelmingly" demonstrate that satellite services "must be" part of the islands' broadband infrastructure and "should" receive USF support. The FCC "must take these comments into account and address the issues in its proposal that prevent the participation of satellite operators in this [USF] proceeding, including the arbitrary selection of the June 2017 Form 477 data filing as a cut-off date for participation; the unjustified application of latency requirements; and the decision to award funds using non-transparent, anti-competitive, subjective processes," said Hughes' reply Wednesday. "Failure to do so will result in the residents of Puerto Rico and the U.S. Virgin Islands being denied access to truly resilient and reliable broadband services."

Nebraska commissioners voted 4-1 for a hybrid state USF contribution mechanism with a $1.75 per connection surcharge for residential wireline, postpaid wireless and interconnected VoIP services and a 6.95 percent revenue-based surcharge for business and other services. CenturyLink and small rural carriers Wednesday applauded the Public Service Commission’s Tuesday rate design order in docket NUSF-111, which followed last year’s decision to move to a connections-based contribution mechanism. Cox and CTIA raised red flags. Other state commissions are working toward USF updates, including Alaska, New Mexico and Oklahoma.

The USF contribution factor could rise in Q4 to 19.1 percent from Q3's 17.9 percent of carriers' U.S. interstate and international (long-distance) telecom end user revenue, if projected revenue holds steady, emailed industry consultant Billy Jack Gregg in his quarterly update Thursday. Q3 had a rare projected revenue increase, but "if the long term trend of declining quarterly revenues continues, the USF assessment factor for the fourth quarter will be higher than 19.1%." He said Universal Service Administrative Co. Q4 revenue projections are due at the end of August. Projected USF demand for Q4 is $2.06 billion, $112.3 million more than in Q3, he said.