Long overdue, Phase II of the Connect America Fund has several open questions about its implementation, attorneys told a Federal Communications Bar Association audience Thursday evening. Originally scheduled to be in place by the end of 2012, the second phase will provide five years of USF support to price cap carriers in return for a statewide commitment to build out networks that can provide voice and broadband service. But many questions are still up in the air, panelists said, from how the cost model will work to what approach the competitive bidding process will take.
"There can be no question” about the importance of the Universal Service Fund and promoting broadband deployment in rural America, but doing so won’t be easy, said FCC Chairman Tom Wheeler Thursday. FCC commissioners got a brief status update on its moves to reform the USF during the meeting. The presentation went over in some detail recent history of USF reform, including progress on Phase II of the Connect America Fund. Other commission members indicated they had concerns that parts of the program limit full use of the program by carriers. Staff last gave an update at the FCC’s June meeting.
The National Exchange Carrier Association submitted the “latest view” of USF data for the “2011-x and 2012-x” periods, as requested by FCC staff in connection with analyses related to recently adopted USF reforms, NECA said in a filing Wednesday (http://bit.ly/HMTdEO). The data include all changes reported during the past three months, such as corrections for errors and omissions, and “average schedule company” to “cost company” conversions.
New FCC Chairman Tom Wheeler, who took office Nov. 4, has yet to have to make a hard or controversial decision, and plenty will follow, but instead has been busy setting a tone for his chairmanship. That started his second day when Wheeler met with staff, promising he would be open to ideas and plans to be the kind of chairman who walks the halls at the commission. The same day he released a lengthy blog post (http://fcc.us/1cCIDhM) offering his broad view on the role the FCC must play in a changing world.
Universal service needs to remain “a pillar upon which the IP evolution is built and sustained,” National Telecommunications Cooperative Association CEO Shirley Bloomfield told new FCC Chairman Tom Wheeler in a letter Monday (http://bit.ly/1cl1BEP). NTCA mentioned its 2012 petition proposing various “policy paths” that the FCC could pursue as it deals with the IP transition. It’s important to “avoid clinging as a matter of routine or comfort to old rules in the face of changes in technology, competition, and consumer preference,” Bloomfield said -- but it’s also important to have clear “rules of the road.” The “rural call completion epidemic” is a “canary in a coal mine” that shows the risks that can arise without clear rules, she said. The FCC should also work to reduce regulatory uncertainty, she said, and reform the quantile regression analysis-based caps on high-cost USF support that have frozen broadband investment.
Corrections: (1) The changes city-owned Longmont Power & Communications is making to its fiber network — to which it will continue as sole service provider — is to build it out to reach all residents (CD Nov 7 p5). (2) The USF-funded Lifeline program (CD Nov 8 p6) does not pay for any cellphones that participating carriers give to Lifeline subscribers free of charge. (3) Clarification: The FCC Intergovernmental Affairs Committee starts its reauthorized two-year term the date of its first meeting, which will be after Dec. 2 (CD Nov 4 p15).
The FCC should refrain from setting one-size-fits-all requirements for the E-rate program, and use its limited E-rate funds responsibly instead of simply aiming to double the fund’s size, parties said in reply comments.
Stinson Morrison attorney Harvey Reiter will get just seven minutes to persuade Denver appeals court judges that the FCC’s 2011 revamp of the USF and intercarrier compensation rules unlawfully hurt his rural CLEC clients. Asked if that’s enough time, Reiter responded with a hearty laugh. “It is what it is,” he said. Scott McCollough of the Austin firm McCullough Henry has five minutes to convince the court that the FCC abandoned the statutory construct of “user” versus “carrier.” McCullough expects to “be interrupted within the first five seconds,” he told us, erupting into laughter.
The FCC needs to do more to stop the “lingering uncertainty” of quantile regression analysis, a crucial part of the November 2011 USF order, 26 senators wrote FCC Chairman Tom Wheeler (http://bit.ly/1gpCSon). Signatories include Communications Subcommittee Chairman Mark Pryor, D-Ark., and Judiciary Committee ranking member Chuck Grassley, R-Iowa. They called quantile regression analysis “one of the main causes of uncertainty” and said they appreciate the FCC’s efforts to “temporarily relieve” the effects of the analysis. “We remain concerned the reform order is limiting the ability of small rate-of-return carriers to provide rural consumers with the broadband service they need to compete in today’s global economy,” said the letter sent this week. The order is causing declining private sector investment, the letter said. “Both potential borrowers and lenders have indicated hesitation in moving forward with loans for broadband infrastructure improvements due to the uncertainties created by the reform order.” USTelecom posted the letter Tuesday and said it was sent Monday. “As of today, more than 70 senators and representatives have written to the FCC about the QRA, and USTelecom continues to encourage members of Congress to reach out to the commission on this important issue,” said USTelecom in a blog post Tuesday (http://bit.ly/HEQqhp). It noted the letter urged the FCC not to slow Connect America Fund Phase II implementation.
"The current state of connectivity feeds inequality,” said National Economic Council Director Gene Sperling Tuesday at a Washington Post event on the country’s lingering digital divide. That sentiment was shared by every official and educator who took the stage, as they struggled with how to increase broadband connection and adoption among those who lack access, can’t afford it, or say they don’t want it.