Don’t use USF money to build out service where providers already are providing broadband and phone service, the American Cable Association recommended to Congress. ACA also recommended that broadband service not be assessed for USF contributions but that USF should support broadband service. Distribute the support “efficiently” and “on a competitively neutral basis,” with “fiscally responsible” USF programs, it said. ACA submitted its comments to the House Commerce Committee in response to questions about overhauling USF policy. Those comments were due Friday but have not been released online by the committee (CD Sept 22 p7). It’s fine for states and state regulators to create USF programs as long as they don’t give money to regions already served and as long as “any eligible telecom carrier [ETC] can compete to obtain support on a competitively neutral basis,” it said. “For federal universal service programs, the role of the states and state commissions should be more circumscribed” and “largely to examine whether a provider is a ‘bad actor,'” ACA said. “ACA suggests that the FCC take over the ETC designation process for its programs, which it does already in select instances, and permit states to participate in that process if they have material information about the qualifications of the potential ETC.”
Congress received divided views on how important state authorities should be in any new communications regimen, in comments due Friday to the House Commerce Committee on a white paper about overhauling Communications Act USF policy (CD Sept 22 p7). Groups representing smaller telecom companies and state regulators emphasized the importance of an ongoing state role, and several commenters pointed to the FCC Federal-State Joint Board on Universal Service and its potential importance for federal-state cooperation. Bigger industry groups such as CTIA advocated more limited state involvement.
Industry officials urged Congress to reconsider many elements of USF support policy, despite lauding the broad principles that have guided it. House Communications Subcommittee Republicans issued a white paper last month (http://1.usa.gov/1pmX66c) asking several questions about USF, seeking responses by Friday. It was the fifth white paper the subcommittee issued as part of efforts to overhaul the Communications Act, an initiative announced in December. Initial responses, which the committee has not posted online but were shared with us, were on what parties considered necessary changes to the USF contribution mechanism.
Calls by education and library groups, and FCC Commissioner Jessica Rosenworcel in a speech Wednesday, to increase E-rate funding are running into opposition from telcos, in comments filed in the E-rate modernization Further NPRM. The Independent Telephone and Telecommunications Alliance and USTelecom said they worry expanding E-rate could cut into other USF programs like the Connect America Fund.
FCC Inspector General David Hunt told a House Communications Subcommittee Wednesday that he has been unable to hire criminal investigators, despite recurring requests. Hunt said his office “initiated a discussion with management” on its need to hire investigators in early 2012, but has been unable to do so. Hunt also questioned FCC Chairman Tom Wheeler’s decision to set up a USF Strike Force under the Enforcement Bureau and whether its efforts duplicate work more properly handled by the Office of Inspector General (OIG).
The FCC “must tackle long overdue” USF contribution reform before thinking about expanding the E-rate budget to meet the goal of spending $1 billion annually for E-rate Wi-Fi connections in schools and libraries, ITTA said in comments filed Monday in docket 13-184. “Universal service contribution rates have jumped 60 percent under the current Administration,” it said, and the commission “can no longer ignore the pressure its decisions put on the” USF. Doing so would jeopardize other agency goals, including broadband development, and would increase costs “that are ultimately borne by consumers,” ITTA said. The FCC’s $2.30-per-square-foot E-rate funding formula for libraries “would result in the inequitable distribution” of funds, said a study commissioned by the Urban Libraries Council submitted in the same docket. The study found that unlike for rural, town and most suburban libraries, square footage is not an accurate indicator of library users or Wi-Fi costs, ULC said (http://bit.ly/1qZ6GM4).
"Several concerns” worry FCC Inspector General David Hunt, he plans to tell the House Communications Subcommittee Wednesday. “The FCC has refused to allow the IG to hire criminal investigators despite the authority granted to the IG in the IG Act of 1978, as amended,” Hunt said in his pre-filed written testimony (http://1.usa.gov/1s5qnpa). “Criminal investigators are a very much needed resource at this Office, to increase its ability to conduct criminal investigations without consuming the resources of DOJ and the FBI. Further, FCC management retains a right to approve all OIG hires, a requirement which appears to contravene the IG Act and impugn the independence of the OIG.” Hunt will also criticize the FCC Enforcement Bureau’s recently formed USF strike force, referring to concerns “that efforts might be duplicative and resources wasted.” FCC Managing Director Jon Wilkins plans to testify on the agency’s attempts to overhaul its internal processes and other work, despite funding concerns. “Flat funding since 2009, despite the growth in our operational costs, has challenged the FCC’s ability to maintain current service levels,” Wilkins said in his written testimony (http://1.usa.gov/1ydmCAA). “In addition, sequestration created a gap in our budget that not only challenged the FCC’s ability to commit funds to basic programmatic needs, but also introduced budget uncertainties that made it difficult to pursue opportunities to invest in improved efficiency.” The hearing is at 10:15 a.m. in 2123 Rayburn.
The House Small Business Committee is gearing up to pepper FCC Chairman Tom Wheeler on Wednesday with a deluge of questions on a wide range of telecom and media topics, according to the 14-page GOP memo released Monday (http://1.usa.gov/1qXbzoR). It includes detailed sections about FCC history, broadband deployment and the role of NTIA; the Rural Utilities Service and USF; net neutrality; spectrum availability; and media consolidation and proposed mergers. Small Business has an FCC oversight hearing scheduled for Wednesday at 1 p.m. in 2360 Rayburn and Wheeler “will discuss among other issues, broadband deployment, Universal Service Fund (USF) reform efforts, net neutrality, wireless spectrum availability, and increasing media concentration through mergers,” the memo said. It emphasized the implications of ongoing FCC actions for small businesses. “Depending on how the FCC addresses various issues raised in the [net neutrality] NPRM, the ability of small business to utilize the Internet for their retail operations could be affected,” the memo said. “Alternatively, small telecommunications carriers that provide broadband service could find their networks over taxed with burgeoning demand and no way to manage their networks.”
The “steady increase” in the FCC USF contribution factor is “clearly disturbing and unsustainable,” said Commissioner Mike O'Rielly in a blog post Thursday (http://fcc.us/1rZpfDr). He reiterated his call for an overall budget cap on the universal service.
Sen. Mark Begich, D-Alaska, wanted FCC Chairman Tom Wheeler to see firsthand the telecom challenges of Alaska, hosting Wheeler for a visit last week. “I took Chairman Wheeler to Anchorage, Kotzebue and Kiana so that he could see how to best deliver connectivity to an urban community, a hub community and a rural village,” Begich told us in a statement. “He heard Alaskans talk about the need for better, more affordable bandwidth to improve education, medical services and to help grow businesses across the state.” Begich’s daily schedule records show visits to Kiana and Kotzebue Thursday and Anchorage the previous day, which included a meeting with General Communications Inc. and a discussion about broadband deployment. An FCC spokesman confirmed to us Friday that Wheeler was in Alaska meeting with Begich and staff to the state’s Sen. Lisa Murkowski and Rep. Don Young, both Republicans. An ex parte filing from Copper Valley Telephone Cooperative recounted a meeting Wednesday that included Wheeler and aide Patrick Halley discussing Alaska’s rural challenges with Copper Valley Chief Financial Officer Pam Murphy, Alaska Telephone Association Executive Director Christine O'Connor, Begich legislative correspondent Rafi Bortnick and Young legislative assistant Jason Suslavich. “I thanked the Chairman for his leadership in eliminating the QRA [quantile regression analysis high-cost support] model, but expressed my concern with what would replace QRA to distribute High Cost USF support,” Copper Valley CEO David Dengel wrote in the ex parte filing (http://bit.ly/1qXzW2L). “I told the Chairman that because of the elimination of the QRA, CVT is able to deploy fiber to the community of Slana this summer at a cost of approximately $650,000.” They discussed the factors any high-cost support model would have to include. “The FCC has already invested significant amounts of Universal Service Fund support in Alaska in the past several decades which has allowed for twenty first century technologies to reach hundreds of villages across the state,” Begich said. “Without this support, none of that would be possible and Alaska would be left in the dark. I showed Chairman Wheeler that we are putting these funds to good use and making a case for future investment."