Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., said the “best thing” about Wednesday’s committee hearing on E-rate “will be Ed Markey on the committee,” during an interview at the Capitol. Markey, a Democrat, was sworn in as a senator Tuesday after winning the Massachusetts special U.S. Senate election to fill the seat vacated by Secretary of State John Kerry, a term that ends in 2015. Hill aides said it’s likely Markey will be named to the Senate Commerce Committee but he had not been formally named at our deadline. A committee spokesman had no comment Tuesday. Rockefeller told us he started pulling the strings to get Markey on the Senate Commerce Committee “a year and a half ago.” Markey is “a natural for it. He’s the E-rate guy in the House,” said Rockefeller. Rockefeller brushed off recent suggestions by House Communications Subcommittee Chairman Greg Walden, R-Ore., that the FCC should seek to cap USF funding. “Chairman Walden has made a career out of making life miserable for me -- but I'm still smiling,” Rockefeller told us. Rockefeller, the original author of the E-rate program, said he was unconcerned by Walden’s recent letter urging FCC acting Chairwoman Mignon Clyburn to implement a cap. “What they do on E-rate in the House is not going to go in the Senate, so he is free to do whatever he wants.” Walden had urged Clyburn to cap the overall fund at current levels and refer any USF expansion proposals to the Federal-State Joint Board on “whether to adopt expansion proposals and, if so, how to implement them within the cap,” according to the letter (CD July 16 p3). Clyburn previously circulated an NPRM ahead of Friday’s commission meeting tied to President Barack Obama’s proposal to modernize the E-rate program to ensure that schools and libraries are connected through broadband of at least 100 Mbps with a target of 1 Gbps (CD June 7 p7). The Senate Commerce Committee’s E-rate hearing is scheduled for 2:30 p.m. in 253 Russell. Scheduled to testify at the hearing are Sheryl Abshire, chief technology officer at Louisiana’s Calcasieu Parish School System; Linda Lord, state librarian at the Maine State Library; Patrick Finn, senior vice president-public sector at Cisco Systems; and James Coulter, co-founder at TPG Capital.
House Communications Subcommittee Chairman Greg Walden, R-Ore., urged FCC acting Chairwoman Mignon Clyburn to “tread carefully” as she considers any expansion of USF, according to a letter made public on Monday (http://1.usa.gov/12QWF57). Walden said Clyburn should seek to cap the overall fund at current levels in order to “provide families some certainty and minimize fluctuations in their monthly bills,” according to the letter. Walden said any expansion proposals should be referred to the Federal-State Joint Board on “whether to adopt expansion proposals and, if so, how to implement them within the cap.”
TelePacific cited legal precedent to the FCC Friday as a followup to its June 25 meeting with Wireline Bureau officials on its petition for partial reconsideration of the 2012 Wholesaler-Reseller Clarification Order (http://bit.ly/13UJBku). “Courts have found USF contributions to be inequitable and discriminatory in violation of Section 254(d) where one type of carrier is put at a distinct competitive disadvantage compared with another type of carrier with no reasonable explanation for the disparity,” TelePacific said. In TelePacific’s case, “identical broadband Internet services offered by two carriers, one utilizing its own special access services and one utilizing an underlying carrier’s special access services, result in disparate USF contributions based on the method of delivery of that service,” the carrier said. The commission has provided no rational justification for its “discrimination” between carriers who own the last mile and carriers who don’t, TelePacific said.
Many draft proposals focus on changes to technology and address potential federal changes in light of that. One NARUC draft proposed an update on slamming rules. The FCC should “update the current rules and regulations on slamming by (1) requiring third-party verification to include mandatory recording of any contact in which customers are solicited for consent to changes in services or providers, (2) by applying slamming rules uniformly to all voice services including traditional wireline, interconnected and over-the-top VoIP, and wireless; and (3) by requiring the prominent notice of the number the customer may call for assistance of the FCC and/or State agency.” Wireline, VoIP and wireless companies should report billing complaint trends as well as “spikes driven by activity of specific third-party vendors” to both state and federal entities, according to the draft.
The FCC’s USF suffers from “spectacular abuses,” researchers concluded, provoking protests and dissent. A 54-page report from George Mason University Professor Thomas Hazlett, a former FCC chief economist, and Scott Wallsten, Technology Policy Institute vice president-research, points to billions of dollars in high-cost line subsidies, tying them to what the authors characterize as a history of problems. The FCC defended the fund, pointing to November 2011 reforms, and NTCA and the Western Telecom Alliance attacked the report’s claims.
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Federal rules are hurting companies’ ability to deploy broadband, two Iowa executives wrote in a Monday Des Moines Register op-ed (http://dmreg.co/16jxzx6). Don Jennings, executive vice president of Partner Communications Cooperative, and Debra Lucht, general manager of Minburn Communications, focused on the effects of the FCC’s November 2011 USF order on Iowa companies and cited a recent survey of 100 Iowa telcos. “Companies responding to the survey estimated they will lose $47.1 million in high-cost Universal Service Fund compensation from 2012 to 2017” due to the order, they wrote. “Eight in 10 companies answering the survey said the order will mean a cutback of investment in network infrastructure.” The Iowa Telecom Association requested the survey, conducted by Wichita State University’s Center for Economic Development and Business Research in the School of Business. The impact will lead telcos to cut their number of employees by “almost 10 percent by 2017, resulting in a direct loss of $14.9 million in wages,” they said of the survey. Both executives noted ways the FCC order has influenced their own company decisions.
The Conference Group lacked standing to challenge an FCC decision that audio bridging software by InterCall must pay into the USF, the U.S. Court of Appeals for the D.C. Circuit said Tuesday (http://1.usa.gov/14oHjbd). The Conference Group, a provider of audio conferencing services, had argued it was harmed by the commission’s ruling, which it said imposed new duties on all audio bridging service providers (CD April 16 p8).
The question of VoIP provoked sharp disagreement. The RLECs of the Iowa Telecom Association (ITA) do “not believe any of the commenters offered any compelling reasons to alter the Board’s precedent that interconnected VoIP is and should remain subject to certain regulatory requirements,” they said (http://bit.ly/15dzMgh). The Iowa Office of Consumer Advocate (OCA) pushed for certain VoIP regulation, running counter to Verizon, AT&T and the Voice on the Net Coalition. “Since virtually all retail rates have been deregulated in Iowa since 2008, the push for preemption or deregulation of VoIP services must be to free VoIP carriers from regulatory oversight of crucial consumer protections,” the consumer advocate said (http://bit.ly/1b5lZez). It pointed to “enforcement of service quality standards, consumer privacy protections, and access to connection to the entire network” and “carriers’ public safety obligations, including providing reliable access to 911 services” as well as the board’s complaint process. Providers are “at times unresponsive to consumer complaints,” it added.
FCC acting Chairwoman Mignon Clyburn circulated an NPRM Friday, teed up for a vote at the commission’s July 19 meeting, examining a further overhaul of the USF E-rate program. The NPRM also comes in the wake of a June 6 speech by President Barack Obama urging the commission to make high-speed Internet available to enough schools and libraries to connect 99 percent of American students (CD June 7 p7).