While AT&T and other telephone companies have been seeking deregulation from states to avoid having to provide costly and increasingly unprofitable landline service (CD March 19 p12), Maine’s primary telco is taking a different tact. FairPoint Communications is asking the Public Utilities Commission for a $67.6 million-a-year public subsidy to continue providing landline. The company is also asking $2-a-month increase for residential and business landline customers.
Spectrum aggregation limits in Canada’s recent 700 MHz auction meant a more competitive auction, with higher prices and competitive carriers winning some of the spectrum, University of Maryland economist Peter Cramton said in comments filed at the FCC on behalf of T-Mobile. “The main lesson from the Canadian 700 MHz auction is that well-crafted spectrum-aggregation limits can succeed in encouraging valuable competition in the mobile industry without sacrificing auction revenues,” Cramton said (http://bit.ly/1gVIerq). “Were the Canadian auction conducted without limits, it seems likely that the regional operators would have been pushed aside by the much stronger Big 3.” Rogers “as a result of a network sharing arrangement between Bell and Telus had the most to lose if it failed to get” the A and B blocks, he said. “Rogers competed aggressively for AB and won in all the major markets paying CD$4.32 per MHz/POP, about twice the overall average auction price of CD$2.32. The C block also commanded a high price.” Like the Canadian market, the U.S. market is highly concentrated, Cramton said. “In the U.S., the Big 2 [carriers] have 67 percent market share and hold roughly 80 percent of the low-band spectrum, which is best-suited to providing coverage within buildings and in more difficult terrain. Were the Big 2 to dominate the 600 MHz auction, competition in the mobile broadband market would be harmed.” Also on spectrum aggregation, Verizon disputed arguments in a T-Mobile white paper, the T-Mobile USF Mobile Model Report (http://bit.ly/1efEsUX). “T-Mobile recently submitted a cost study analyzing deployment costs in rural markets for different types of spectrum,” Verizon said (http://bit.ly/1i85oqI). “That study provides no support for T-Mobile’s claim that it or any other firm is in danger of being ‘foreclosed’ from competing effectively in any market. The economic evidence shows there is no valid basis for the Commission to abandon its longstanding and successful policy of assigning spectrum to those firms that value it most and that will put it to use promptly to serve their customers."
Nearly 200,000 customers of eligible telecom carriers receiving high-cost USF support had rates below the $14 rate floor as of Jan. 2, an FCC Wireline Bureau analysis found (http://bit.ly/1i4EkIY). Of those, about 150,000 were price cap carrier lines, and 50,000 were rate-of-return carrier lines. It’s a decrease from 220,000 lines that had rates exceeding the rate floor on July 1, the analysis showed. The change represents a monthly reduction of about $290,000 in support, the analysis said.
Senate Communications Subcommittee Chairman Mark Pryor, D-Ark., worries about the FCC Wireline Bureau’s plans to hike its rate floor in July. “The rate floor, which is currently set at $14 will rise to over $20 on July 1, 2014,” Pryor said in a Wednesday letter (http://1.usa.gov/P1Fo93) to FCC Chairman Tom Wheeler. “Telecommunications providers offering service at rates below this rate floor could risk losing vital universal service support if they do not take action to immediately raise the telephone rates of their customers.” Wheeler acknowledged the concern during a separate Senate Appropriations subcommittee hearing Thursday, which Pryor did not participate in. The FCC instituted a series of rate floor hikes as part of its November 2011 USF order to prevent what the agency would consider improper USF subsidies. The agency plans to phase in the increase and delay implementation beyond July, Wheeler said. The rate floor is part of the agency’s attempts to phase out excessive subsidies for basic phone service.
FCC Chairman Tom Wheeler faced lawmakers again Thursday, this time addressing challenges such as rural broadband, tribal consultation and the pressing congressional deadline on the implementation of positive train control (PTC) technology, at a Senate Appropriations Subcommittee on Financial Services and General Government hearing on the $375.38 million for the FCC that the White House requested in its FY 2015 budget proposal (http://fcc.us/1hNuRs2). Wheeler committed to working with a Senate Republican on larger telecom discussions, as well as the urgency of the PTC implementation deadline -- December 31, 2015.
The FCC defended its request for about $36 million more in funding for FY 2015 compared to current funding. The White House unveiled its proposed 2015 budget in early March and recommended Congress approve $375.38 million for the FCC (http://fcc.us/1hNuRs2). The House Appropriations Financial Services Subcommittee scrutinized the proposed budget during a hearing Tuesday, and FCC Chairman Tom Wheeler and Commissioner Ajit Pai testified on behalf of the agency.
The House Small Business Subcommittee on Health and Technology dug into questions of rural broadband deployment Thursday at a field hearing in New York and found grave accuracy problems with broadband mapping, its head lawmaker told us. The hearing was at the Orleans County Legislature in Albion, N.Y. Written testimony released Thursday and interviews revealed plenty of scrutiny about what government problems participants believe may impede industry from deploying broadband infrastructure.
Halfway through a daylong FCC rural broadband workshop Wednesday, an audience member stepped up to the mic and asked how much money is available for the rural broadband “experiments,” and how many of the nearly 1,000 expressions of interest received will be granted. “Nothing has been decided,” responded Carol Mattey, deputy Wireline Bureau chief. How best to dole out its limited universal service money is the challenge for FCC officials, who made it clear they are seeking answers.
FCC Chairman Tom Wheeler will recommend raising the USF contribution rate and sending more money to schools and libraries, if that’s necessary, he told a meeting of the Council of Chief State School Officers in Washington Monday. “I will recommend this to my colleagues if warranted,” Wheeler said, according to prepared remarks (http://fcc.us/1qMDLLo) for the event, which was not open to the public. “But my colleagues and I can’t just pour more money into the program as it presently stands,” he said. “The first step in expansion is introspection."
Two Senate Republicans want the FCC to move forward on the USF’s $100 million Remote Areas Fund. Sens. Roy Blunt of Missouri and Kelly Ayotte of New Hampshire wrote a letter, dated Thursday, to FCC Chairman Tom Wheeler, saying: “If implemented correctly, RAF could potentially provide the most rural areas of the country, including the most rural parts of New Hampshire and Missouri, with access to advanced broadband services” (http://1.usa.gov/1fAJvU9). “We are encouraged that the Commission’s recent IP transitions item included a commitment to address the challenges of providing service to the most remote, unserved areas of the country by the end of 2014,” wrote Ayotte and Blunt. “Please provide us an update as to how the Commission plans to implement the $100 million annual RAF portion within the Universal Service Fund this year."