NCTA’s proposal to cut Connect America Funds from ILECs that don't meet the new FCC 25 Mbps download/3 Mbps upload standard (see 1501290043) is “baseless,” Frontier Communications said in reply comments on a notice of inquiry on ways to increase broadband deployment. NCTA had said in initial comments that the funds should be shifted to any broadband provider able to meet the standard (see 1503060064). Frontier called the proposal a “last-minute attack” and said pursuing the change would “severely delay the deployment of broadband to rural areas.” NTCA and the American Cable Association, in replies posted Tuesday in docket 14-126, also urged the agency to enact reforms to curb increasing programming costs. An ACA study took particular aim at “'Cablization’ of the Internet,” in which content providers charge ISPs fees on a per-subscriber basis to permit the broadband providers’ customers to access the content, said ACA's filing. Should “content providers pursue this business model, the effect on broadband deployment will almost certainly be immediate and grave,” ACA said. Among other reforms, the association urged the agency to monitor for “cablization” and address commercially unreasonable actions. Using Telecom Act Section 706 to deal with the costs of programming would not “present the challenges” of using the provision to pre-empt state anti-municipal broadband laws, the cable association said. Making video content available at affordable rates and under reasonable terms and conditions “spurs rural broadband investment,” NTCA said. It urged changes to USF to support smaller rural companies. Frontier noted that CAF Phase II is “specifically targeted to the areas that most need funding.” By requiring only 10 Mbps download/1 Mbps upload speeds for CAF, the agency is recognizing “a tradeoff between the number of households reached and the speeds achieved,” Frontier said.
Rep. Adam Kinzinger, R-Ill., wants to pursue “legislation to ensure forbearance will be permanent” in the FCC net neutrality order, which reclassifies broadband as a Communications Act Title II service and forbears from many Title II provisions, his spokeswoman told us this week. Kinzinger pressed FCC Chairman Tom Wheeler on the possibility at an FCC oversight hearing last month, as did Sen. Ted Cruz, R-Texas, zeroing in on making rate regulation forbearance permanent.
The FCC should set a timetable and move forward with USF contribution overhaul, Ad Hoc Telecommunications Users Committee counsel Andrew Brown, of Levine, Blaszak, told Nicholas Degani, an aide to Commissioner Ajit Pai, and Travis Litman, an aide to Commissioner Jessica Rosenworcel, in separate meetings March 31, according to an ex parte filing posted in docket 09-51 Thursday. The group represents large businesses in various industries that purchase telecommunications and IT services. The agency made significant progress in USF spending in its 2011 overhaul and temporarily stabilized the fund's size, Brown and consultant Susan Gately told the aides, according to the filing. The agency never finished the updates because it hasn’t dealt with contributions to the fund, the filling said. The fund’s contribution factor will continue to rise and December’s $1.5 billion increase in the E-rate annual spending cap (see 1412110049) threatens the stability of the fund, the ad hoc committee said. An agency federal-state joint board is charged with recommending by Tuesday whether broadband customers should pay into USF, though a footnote in the net neutrality order said the recommendation may be slightly delayed (see 1503120053).
Ohio’s Department of Rehabilitation and Correction (DRC) said it negotiated its current contract with Global Tel*Link (GTL) to “drastically reduce” its inmate calling service (ICS) rates effective Wednesday to 5 cents per minute plus applicable taxes and federal USF fees for all calls within the U.S. The rate reduction is meant to comply with the FCC’s 2013 ICS rate cap order, which took effect last year, DRC said Tuesday. The FCC capped interstate call rates at 25 cents per minute for collect calls and 21 cents per minute for debit and prepaid calls. A 15-minute collect call cost would be capped at $3.75 under the FCC’s rules, while a 15-minute prepaid call fee would be capped at $3.15 (see report in the Aug. 12, 2013, issue). A 15-minute inmate call in Ohio cost $17.14 before the rate reduction, DRC said. GTL said it plans to replace all of its more than 2,000 phones in Ohio prisons by the end of the year and will install an additional 500 phones.
The Wireless ISP Association urged the FCC to exempt small ISPs from any USF charges that may be imposed on broadband. Imposing new costs and burdens on unsubsidized broadband providers “will make broadband less affordable for customers, including many in those areas most in need of access services,” WISPA said in a letter to the commission posted Tuesday in docket 96-45.
A petition for U.S. Supreme Court review of the 10th U.S. Circuit Court of Appeals denial of petitions to review the 2011 USF/intercarrier compensation (see 1405270045) order should be denied, the FCC said in a brief filed with the high court. U.S. Cellular, Cellular South and the Rural Independent Competitive Alliance said the FCC lacked authority to require broadband buildout in order to receive USF, but none of the petitioners has standing to challenge the requirement, the agency said. The petitioners’ argument rests on the classification of broadband as an information service, but “the FCC has now reversed that classification,” the brief said. The appeals court also correctly said the agency was authorized to impose the broadband requirement even when broadband was classified as an information service, the agency said.
Industry groups are upset over an FCC policy statement creating what they call “draconian” treble damages for amounts owed to USF and other funds. CTIA, Comptel, NCTA and USTelecom filed petitions for reconsideration and a stay, saying the statement violates notice requirements and the “inflexible” triple damages violates the Communications Act. ITTA filed comments supporting the joint petitions.
The FCC should cap the overall size of USF programs to protect consumers after the agency announced March 13 an increase in the program’s contribution factor to 17.4 percent for the second quarter of 2015, Free State Foundation's Seth Cooper said in a blog post Monday. The contribution factor is up from 16.8 percent. “Reducing USF surcharges should go hand-in-hand with comprehensive reforms that reduce the overall size of the USF subsidy system and improve its efficiency,” he wrote. Wireless customers are hit hardest by USF increases, he said, saying the agency considers 37.1 percent of a wireless consumer's calling plan as interstate long distance and subject to the USF surcharge. Given the commission’s authorization of an E-rate increase of $1.5 billion annually, “it's hard to expect voice consumers will avoid even heavier USF surcharge burdens in the future,” Cooper wrote.
The FCC is aware “our story is not done” on its municipal broadband pre-emption order, given Tennessee Attorney General Herbert Slatery’s legal challenge to the order, said Daniel Kahn, Wireline Bureau Deputy Competition Policy Division Chief, during a commission webinar Monday. Slatery, a Republican, sued the FCC March 20 in the 6th U.S. Court of Appeals over the order, which pre-empted municipal broadband restrictions in North Carolina and Tennessee at the respective requests of Wilson, North Carolina, and the Electric Power Board (EPB) of Chattanooga (see 1503240059). North Carolina Attorney General Roy Cooper, a Democrat, is considering whether to join Slatery’s lawsuit, a spokeswoman said. The FCC webinar also addressed the commission’s new NPRM on implementation of Section 111 of the Satellite Television Extension and Localism Act (STELA) Reauthorization and implementation of the FCC’s net neutrality order.
Rep. Alex Mooney, R-W.Va., introduced legislation Thursday that would “exempt providers of broadband Internet access service from Federal universal service contributions,” said the text for HR-1712. The two-page bill is called the Freedom From Internet Tax Act, said a copy provided by Mooney’s spokesman. “Overzealous government bureaucrats should keep their hands off the internet,” Mooney told us in a statement Friday. “The President has proposed the internet be treated like a utility with the potential for fees, the cost of which would be passed on to users. Since its inception the internet has been a free and open tool for all to use and enjoy without interference from Washington. It should stay free and it should not be taxed.” The bill was referred to the Commerce Committee. Mooney isn't on Commerce. The bill has no co-sponsors. A concern at several oversight hearings this month involved broadband service becoming subject to such USF fees, which some connected with the FCC reclassification of broadband as a Communications Act Title II telecom service. Mooney’s legislation text provides a straightforward exemption for broadband providers, citing the FCC Feb. 26 net neutrality order for definitions of what constitutes such service.