Telecom deregulation advocates are following up recent successes in four states that passed statutes deregulating aspects of wireline and VoIP services by renewing their push for passage of similar legislation in the Idaho and Minnesota legislatures. Both states are considering bills that would prohibit VoIP regulation: Idaho’s S-1105 and Minnesota’s HF-776/SF-895. Minnesota is also considering HF-1066/SF-736, legislation that would let ILECs be regulated the same as CLECs. None of those bills advanced as far as statutes that passed or were enacted in Kentucky, North Dakota, Pennsylvania and West Virginia. Thirty-two states deregulated wireline service by the end of December, while three others and the District of Columbia significantly limited wireline oversight, said National Regulatory Research Institute Principal Researcher Sherry Lichtenberg.
Explaining why the net neutrality order released publicly Thursday is 400 pages, a senior FCC official told reporters that the agency wanted to deal with points raised by critics and commenters because it fully expects the order to be challenged in court.
The FCC has not only “failed to pursue meaningful solutions” to making sure broadband is being deployed in a timely and reasonable fashion, but exacerbated the problem by “arbitrarily raising” the broadband benchmark speed and imposing Communications Act Title II regulation on broadband in the net neutrality order, NCTA said in comments filed Friday. Responded to the agency’s January notice of inquiry (see 1501290043) on improving broadband deployment, the comments hadn't been posted in docket 14-126. USTelecom also filed comments on the NOI Friday, which, according to its blog, focused on removing “outdated legacy regulations” and “restrictive local rules and regulations.” The commission failed to “effectively implement many of its own prior recommendations,” including adding broadband to Lifeline and implementing the Remote Areas Fund (RAF) to deploy broadband to unserved areas, NCTA said. The commission should immediately revoke offers to ILECs for high-cost USF support that don't meet the new 25 Mbps download/3 Mbps upload standard, it said. The funding should be offered on a competitively neutral basis to any qualified broadband provider willing to provide the new speed, NCTA said. The agency should also implement the RAF and issue an NPRM to create a broadband Lifeline program, the filing said. An independent third party should also examine why there hasn’t been more progress extending broadband deployment to unserved areas, even though more than $28 billion in federal funding has been spent on the goal since 2010, the filing said. USTelecom urged the agency to grant its October 2014 forbearance petition (see 1410070050), reforming state and local regulations “that impede a provider’s ability to roll out broadband services,” and ensure that broadband providers can deploy fiber in multi-dwelling units. The FCC should “promote efficient and carefully targeted broadband deployment in rural areas” through the Connect America Fund and develop “’sooner rather than later’ a long-term universal service solution for rate-of-return carriers,” USTelecom said.
The FCC should reconsider its Feb. 3 policy statement creating treble damages in calculating fines for violations of federal payment rules, said Comptel, CTIA, NCTA and USTelecom in a joint petition Friday that also seeks a stay. The policy statement makes a “substantial rule change” affecting the USF, Telecom Relay Service Fund, local number portability, North American Numbering Plan and regulatory fee programs, USTelecom said in a blog post. The commission didn't follow proper notice and comment requirements, USTelecom said. Tripling damages is “’arbitrary and capricious,’” it said.
A little-noticed provision in the FCC net neutrality order (see 1502270045) would let small rural broadband providers opt to continue to be partially regulated under the old Communications Act Title II rules instead of the order’s “light-touch” version that forbears from several provisions of the section, the agency and attorneys representing the providers told us. The providers and groups like NTCA and the National Exchange Carriers Association lobbied for the provision, fearing a change in their classification could jeopardize their eligibility to receive USF support for providing telecom service, said Michael Romano, NTCA senior vice president-policy, and Jeffrey Dupree, NECA vice president-government relations. Continuing to be under the old Title II rules also would not weaken what the providers can count under rate-of-return rules.
House Communications Subcommittee lawmakers grilled FCC Managing Director Jon Wilkins Wednesday at an FCC reauthorization hearing. Wilkins said the agency sought to be nimble and use its resources well in its $388 million budget request for FY 2016, more than $50 million more than what it received the previous year. Much of the money would go toward both modernizing the agency’s information technology and its move away from or restacking of its headquarters at the Portals, Wilkins said, as expected (see 1503030053).
The Senate may take the lead on the video overhaul component of a Communications Act overhaul, House Communications Subcommittee Chairman Greg Walden, R-Ore., said Wednesday at the American Cable Association summit. ACA President Matt Polka stressed the importance of Local Choice, a broadcast a la carte proposal that failed last Congress. Senate Commerce Committee Chairman John Thune, R-S.D., was a backer and “remains interested in moving forward,” Polka said in a conversation with Walden. “[Local Choice] puts consumers in control compared to current retrans laws, which gives them no choice at all.”
“Operational demands” have driven up the FCC’s budget request, which is $388 million for FY 2016, agency Managing Director Jon Wilkins plans to testify Wednesday before the House Communications Subcommittee. “For FY 16, the Commission has been forced to adjust its costs upward to manage and execute activities leading to the termination of our headquarters lease in 2017,” Wilkins says in his written testimony. “Over 70 percent of our requested increase supports ‘unavoidable’ costs such as the restacking and move, inflationary increases, and the OIG [Office of Inspector General] base increase.” The hearing, scheduled for 10:30 a.m. in 2322 Rayburn, is focused on FCC reauthorization. Wilkins will argue that the FCC headquarters transition is “an opportunity to create greater cost savings and efficiencies by significantly reducing the Commission's footprint and instituting new management techniques that encourage greater use of shared space,” saving “over $100 million over the life of our new post-2017 lease.” He will say FCC licensees “will bear the brunt of the move” and that the agency is attempting to “assess fees in a fair and equitable manner,” and will defend the agency as fiscally responsible. This FY 2016 budget will “properly align USF expenditures with cost outlays,” thereby “shifting USF funds to cover our salary and compensation expenditures directly related to USF activities,” he will testify. He plans to discuss the “tough budget decisions” the FCC faced as a result of receiving $36 million less than requested last year. “Flat funding has led to staff reductions,” he will say, also warning of big information technology challenges given the agency’s aging systems. “Limited funds have delayed many improvements and threaten to cost us more each day that we are unable to move ahead.”
Despite FCC Chairman Tom Wheeler’s and Commissioner Mignon Clyburn’s remarks Thursday in approving net neutrality rules, small rural broadband providers are subject to Communications Act Title I, which regulates information services, not to Title II common-carrier regulations as Wheeler and Clyburn claimed, USTelecom Senior Vice President-Law and Policy Jonathan Banks wrote in a blog post Friday. In answering fears the agency would regulate broadband rates after reclassifying broadband under Title II, Clyburn said at the commission meeting that the agency hadn't regulated the rates of 700 rural broadband providers, even though they were subject to “full panoply of Title II regulation.” The “hideous complexities” of the commission’s telecom regulations, Banks said, led the companies to provide Title II wholesale transport services they “’sell’” to themselves, while providing Title I broadband service to customers wanting Internet access, Banks wrote. The Title II wholesale service “is fully and completely regulated by the commission, including rate regulation, down to the penny,” Banks wrote. The “misunderstanding illustrates the lack of clarity and understanding around the debate of Title II being a workable regulatory model for achieving an open and vibrant Internet,” Banks wrote. The rural broadband providers have to contribute to the USF based on their Title II revenue, he said. Clyburn noted that the rural providers make USF contributions, but said, “amazingly, the sky has not fallen and things are OK.” Clyburn’s office did not comment Monday. The Title II regulations Banks referred to don't include the forbearance in the "light touch" net neutrality regulations the commission approved, an agency spokesman said.
The net neutrality order approved Thursday (see 1502260043) prevents states for now from making broadband contribute to states' USF, an agency official told us. Commissioner Mignon Clyburn, in voting for the overall order, opposed the restriction, but NARUC General Counsel Brad Ramsay said he doesn’t expect it to cause the same kind of backlash from states as the commission’s pre-emption at the same meeting of North Carolina and Tennessee municipal broadband laws (see 1502260030).