Basing net neutrality rules on Communications Act Title II would mean small- and medium-sized ISPs would be “burdened with the costs required to retain lawyers” and “to administer the reporting and other rules that would no doubt go along with it,” 99 companies wrote Commerce Secretary Penny Pritzker, hoping to push President Barack Obama’s administration to oppose treating the companies as common carriers. “We want to get the president’s ear,” said Alex Phillips, FCC committee chairman for the Wireless Internet Service Providers Association, of the letter to the cabinet-level agency from WISPA members.
The FCC should grant Guadalupe Valley Telephone Cooperative’s emergency request for an expedited waiver of Section 51.917(c) of the commission’s rules, NTCA said in comments (http://bit.ly/1mYYFkW) posted Tuesday to docket 10-90. The Texas company relies on USF support and intercarrier compensation revenue, the filing said. The company is requesting it be able to include as company base period revenue of $278,317.62 owed to it by Halo, which has been forced into Chapter 7 bankruptcy, ceased operations and liquidated all of its assets, the filing said. Quoting GVTC’s petition, NTCA said the inability to include the Halo money “would have ‘a significant adverse impact on GVTC’s recovery mechanism funding,’ and would ‘limit[] the company’s ability to invest in and improve its network.'” TDS Telecommunications should be granted a waiver from the March 31, 2012, deadline for defining its eligibility recovery baseline as set forth in footnote 1745 of the USF-for-broadband order, the company’s outside attorney Yaron Dori told FCC Chairman Tom Wheeler’s legal adviser, Daniel Alvarez, on Monday, said an ex parte notice (http://bit.ly/1mZ9L9E) posted in docket 13-39 Tuesday. Halo’s bankruptcy made it “legally impossible” to obtain a court or regulatory decision order to force Halo to pay amounts ordered to TDS for inclusion in the baseline, the filing said.
Rural electric cooperatives excel at providing broadband access and need funding, Robert Hance, CEO of Midwest Energy Cooperative, testifying on behalf the National Rural Electric Cooperative Association, told House lawmakers Tuesday. The FCC must be “inclusive” with its Connect America Fund money, Hance said during a House Agriculture Subcommittee on Livestock, Rural Development and Credit, telling Congress that rural electric cooperatives “need your support to compete for the billions of dollars available to provide broadband in high cost areas.” The FCC is still struggling when it comes to providing USF for rate-of-return companies, USTelecom Vice President-Policy David Cohen testified, praising the agency’s retreat from quantile regression analysis and urging “serious consideration” of the proposal put forth by the rural telecom industry. Rural Utilities Service (RUS) Administrator John Padalino touted the government’s efforts to finance rural telecom and the relevance of RUS in the 21st century. “While the focus of this hearing is on the deployment of broadband through Rural Utilit[ies] Service programs, these programs are not operated in a vacuum,” Subcommittee Chairman Rick Crawford, R-Ark., said in his opening statement. “It will be helpful to review those changes in the recent Farm Bill in light of the FCC’s changes to how rural telecommunication companies receive assistance. The efforts by the FCC to reform the USF have a direct impact on smaller rate-of-return carriers who both rely on USF support to provide service, and RUS loans to expand their coverage areas.” Officials representing CTIA and NTCA also testified (CD July 29 p12).
Despite the FCC’s recent crackdown on Lifeline fraud, more work needs to be done to rein in the growth in spending of a program that’s more than doubled in five years, Commissioner Ajit Pai told Citizens Against Government Waste Monday. Pai proposed setting an annual budget for Lifeline to “increase incentives to eliminate fraud and improve accountability within the program.” A cap on Lifeline spending would “prevent any future explosion in spending without direct Commission accountability,” he said. The FCC could prohibit Lifeline wireless carriers from giving free service for the program, Pai said, to remove the incentive for recipients to improperly sign up for more than one account. “Requiring some skin in the game would align the Lifeline program with our other universal service programs, each of which requires some contribution by recipients to cut down on waste, fraud and abuse,” he said. The FCC could empower states to play a stronger enforcement role by clarifying that states are free to take steps to ensure the program’s integrity, Pai said. Another option would be to lower the $9.25 monthly subsidy to “cut both the incentive for fraud and the phone bills for consumers who pay into the USF,” he said. The FCC should also begin requiring Lifeline carriers to keep proof of consumer eligibility for the program, Pai said. Companies that violate Lifeline regulations should be subject to forfeitures, he said.
CTIA sees spectrum as its top priority, it plans to tell the House Tuesday: “Congress therefore must encourage the [FCC] to do everything necessary to ensure that these [spectrum] auctions are successful and on schedule,” Executive Vice President Chris Guttman-McCabe plans to say, according to his written testimony, at a House Agriculture Subcommittee on Livestock, Rural Development and Credit hearing on broadband investment. He will advocate for less regulation for the wireless industry and a “predictable, expedited process for seeking siting approvals,” as well as the removal of barriers to the deployment of fiber. The hearing will begin at 10 a.m. in 1300 Longworth. Rural Utilities Service Administrator John Padalino is also scheduled to testify, as is USTelecom Vice President-Policy David Cohen; Robert Hance, CEO of the Midwest Energy Cooperative on behalf of the National Rural Electric Cooperative Association; and Lang Zimmerman, vice president of Yelcot Communications on behalf of NTCA. Zimmerman plans to focus on the funding that rural companies need. “Unfortunately, the success, momentum, and economic development achieved from the RUS’s telecommunication programs were put at risk as a result of the regulatory uncertainty arising out of USF reforms,” he will say, according to written testimony. “It will be all the more important to continue providing RUS with the resources it needs to lend to the rural telecom industry as demand for financing will inevitably increase when reforms are improved and small carriers are given certainty, hopefully through a program like the Connect America Fund that is designed to promote broadband investment.” He will also talk about the urgency with which rural companies require access to such funding, warning against the possible implementation delays that could come from any major tweaks in reauthorizing the farm bill. “Thankfully, it appears that the final Farm Bill left RUS with discretion in administering the program that grants sufficient leeway to make it function more smoothly than the initial Senate Farm Bill would've allowed,” Zimmerman will say. Congress should give “an express directive” to the FCC to broaden “the [USF] contribution base to include the information services that USF already supports,” he will say.
The FCC must address the overall spending of the USF, not use “savings” from universal service reform to expand other USF programs, FCC Commissioner Mike O'Rielly said Friday in remarks to the commission’s Consumer Advisory Committee (CAC). O'Rielly said he wanted to lay down this marker as the agency takes up Lifeline reform. He also suggested that at least one of the CAC members should come from a group representing taxpayers.
Gaps in FCC’s data analysis and reporting limit the commission’s ability to evaluate the USF high-cost program, demonstrate its effectiveness, and help ensure that the data collected will inform current and future reforms, a GAO report (http://1.usa.gov/Umzzpr) said Tuesday. “FCC has not traditionally demonstrated how high-cost funds were spent and the results of that funding because FCC had not collected data to do so,” the report said. Competitive carriers and consumers told the GAO the FCC should increase all carriers’ accountability for their use of high-cost funds by providing information on the results of the funding, the report said. FCC has made improvements to its data collection and presentation that could help it address some of these gaps, the report said, but the agency “has not indicated what information it will make publicly available on a regular basis in the future.” By improving the transparency and accountability of USF’s high-cost spending, “FCC and interested parties could better understand the effects of the reforms; determine those most successful in efficiently enhancing broadband availability, service quality, and capacity; and identify areas for improvement,” the report said. The FCC had no comment, but concurred with the findings, according to the report.
NARUC planned Friday to comment on the FCC net neutrality NPRM, adding to the more than 1 million comments already filed on the NPRM. (See separate report in this issue.) NARUC General Counsel Brad Ramsay told us Friday he was still writing the group’s comments but said he anticipated they would “undoubtedly quote” a net neutrality resolution NARUC’s board passed Wednesday at its meeting in Dallas (CD July 17 p17).
For all the last-minute negotiations, partisan bickering and congressional pressure involved in Friday’s FCC E-rate modernization order (CD July 14 p1) -- not to mention the sweep of bringing Wi-Fi connections to millions of schoolchildren nationally -- several major issues facing the program were left on the table, advocates involved in the debate told us. “This was a tough sell, but the next set of deliberations will be even harder,” said Bob Wise, president of the Alliance for Excellent Education and former West Virginia Democratic governor, who supported FCC Chairman Tom Wheeler’s proposal. “There will be an incredible amount of debate."
House Communications Subcommittee Chairman Greg Walden, R-Ore., lauded the FCC saying it’s creating a USF strike force to target fraud and abuse (CD July 15 p10). “Identifying and eliminating waste, fraud, and abuse to protect taxpayer dollars has been a top priority for House Republicans,” Walden said in a news release Monday (http://1.usa.gov/1qcXdDF). “As the USF has continued to grow, it has become an increasing cost on consumers’ monthly phone bill. The FCC has a responsibility to ensure any dollars being spent are being spent wisely and efficiently.”