Adak Eagle Enterprises and Windy City Cellular laid out for FCC staff how they're cutting costs in their attempts to serve remote Adak Island, Alaska, following the FCC’s grant of a waiver to the companies temporarily giving them extra support to serve the remote area (http://bit.ly/WlFw6a). The order was from the Wireless and Wireline bureaus as they evaluate the two carriers’ need for extra funding. “AEE and WCC have been struggling to maintain operations since their universal service funding was drastically (and immediately, without notice) reduced under the USF ... Transformation Order, including a staggering 84 percent flash-cut to WCC’s funding and the subsequent rapid phase-down of funding for AEE,” the carriers said (http://bit.ly/XLbKD0). “AEE and WCC appreciate the interim relief provided by the Bureaus as they are evaluating a long-term resolution of their waiver requests. AEE and WCC have been actively pursuing cost-cutting measures in order to minimize the amount of universal service support necessary for the companies to continue providing quality service to their customers in a safe manner.” Much of the data submitted was redacted from the public version posted by the FCC.
The USF/intercarrier compensation order remained intact after the sixth order on reconsideration, released Wednesday. In response to several petitions for reconsideration, the FCC declined to reconsider adoption of its high-cost universal service support rules for rate-of-return carriers, and declined requests to reconsider the monthly per-line cap of $250. The original order “represents a careful balancing of policy goals, equities, and budgetary constraints,” the commission said. The latest iteration did make what Chairman Julius Genachowski called “some modest adjustments” to simplify spending caps and give the Wireline Bureau more flexibility to “maintain certainty regarding year-to-year funding levels.” Commissioner Ajit Pai wrote separately to criticize unpredictable benchmarks he thinks will undermine efficient and prudent decisionmaking by rate-of-return carriers.
When a customer chooses not to take plain old telephone service on a broadband-capable loop -- instead desiring to take only broadband -- the costs of that loop get reassigned to a category that doesn’t qualify for USF support, officials from NTCA, NECA and the Western Telecommunications Alliance told FCC Wireline Bureau officials Thursday (http://bit.ly/ZxVyuA). “In practical terms, this means that a consumer’s rates for broadband in high-cost areas will increase simply because that consumer might decide that he or she only wants broadband and no longer wants to purchase POTS on that line,” they said. “This result -- denying the availability of USF support and increasing broadband rates based solely upon a rural customer’s choice to purchase only broadband -- significantly undermines consumer freedom of choice, deters broadband adoption, and inhibits technological evolution.” The groups asked the commission to structure a standalone broadband funding mechanism to “fulfill the express and plainly stated intent” of its 2011 reform order.
Human judgment is necessary in executing the FCC’s quantile regression analysis, since it “is currently and likely always will be inaccurate to such an extent,” said a white paper from Alexicon Consulting and Balhoff & Williams, filed with the FCC Thursday (http://bit.ly/Zv4j8K). The analysis determines telcos’ high-cost support and was implemented as part of the FCC’s November 2011 USF order. The report’s two authors are listed as Alexicon Principal Vincent Wiemer and Michael Balhoff, an attorney with Balhoff & Williams.
The FCC needs to find a near-term solution to make USF support available to rural LECs for broadband-capable networks even where a consumer chooses not to take voice service, NTCA told an FCC Wireline Bureau official Friday, an ex parte filing said (http://bit.ly/Yn7A33). Rules denying USF support for broadband-capable networks in high-cost areas based solely upon a rural customer’s choice to purchase only broadband “significantly undermine consumer freedom of choice and inhibit technological evolution,” NTCA said. The commission should “complete the transition it has already adopted on the face of the November 2011 order -- and thereby facilitate technological evolution -- through simple and straightforward technical fixes to existing rules that would implement this vision for consumers in areas served by RLECs,” NTCA said.
Commenters generally supported a process proposed by the FCC Wireline Bureau to let parties challenge census blocks misidentified by the National Broadband Map (NBM). The process would let parties challenge census blocks identified as eligible to receive Connect America Fund Phase II support, when the parties argue they're actually unserved by an unsubsidized competitor. Cable and wireless ISPs offered some tweaks to the process. USTelecom and several rural associations offered alternative proposals that would involve recommendations by state authorities.
State legislators in Kansas are considering a bill on Internet Protocol-enabled services that’s at odds with a January ruling of the Kansas Corporation Commission. The state regulators asserted authority over fixed interconnected VoIP, while sponsors of Kansas’s House Bill 2326 propose, like more than two dozen other states, that state utility commissions should have very limited authority over IP-enabled technology. The Kansas bill attracted initial supporters from the American Legislative Exchange Council and the Voice on the Net Coalition. Other state bills limiting IP regulation are moving forward in Wyoming (CD Feb 1 p7), Arizona and other states.
Demand for Rural Utilities Service loan funds dropped to 37 percent of the total amount of loan funds appropriated by Congress in FY 2012, Agriculture Secretary Thomas Vilsack and Rural Utilities Service Acting Administrator John Padalino told FCC Chairman Julius Genachowski Feb. 8, according to a letter sent Friday (http://bit.ly/UEgr4z). Current and prospective borrowers say they're hesitant to increase their outstanding debt and move forward with planned construction due to “the recently implemented reductions in USF support” and intercarrier compensation payments, Vilsack and Padalino said. The FCC must take action “to help restore certainty and stability for rural broadband investment,” they said.
The FCC’s November 2011 USF order reflected the goals in President Barack Obama’s Tuesday State of the Union address, said Commissioner Mignon Clyburn at a lunch event Wednesday in Washington. The president’s message, as Clyburn interpreted it, was “we need to do things smarter” and “more with less,” making use of coalitions, partnerships and more, she said. She framed the FCC’s actions in recent years as emblematic of this approach. At the event, hosted by Mobile Future, the National Coalition on Black Civic Participation and the National Association of Neighborhoods, she spoke alongside several entrepreneurs in a discussion about how to promote innovative technologies and what regulatory structures should oversee them.
The FCC explained the history of its universal service rules and exactly why a major revamping was necessary, in a brief filed with the 10th U.S. Circuit Court of Appeals Wednesday (http://xrl.us/bofga9). The intercarrier compensation that the FCC used to subsidize local phone service for decades “no longer serve[s] the evolving communications needs of 21st century America,” the commission wrote in its response to the joint preliminary brief of the petitioners, who are challenging many of the USF and intercarrier compensation rules in the commission’s landmark 2011 order. The FCC explained its rulemaking process, its solicitation of comment, and its review of the “voluminous” administrative record, before ultimately reforming and modernizing its “antiquated” rules. Universal service and ICC were “two dysfunctional regulatory regimes in need of reform,” the commission wrote. “The 20th century framework for intercarrier compensation no longer made sense in the modern communications market.” The commission also discussed the waste associated with the old systems, and how the USF/ICC order was designed to address those problems. Finally, the FCC reminded the court that the agency is entitled to Chevron deference, and where Congress has not spoken directly to the question at issue, the agency is entitled to adopt a “permissible construction” of the statute. “Judicial review of FCC action under the [Administrative Procedure Act] ‘is no more searching’ where (as here) the agency’s decision ‘represents a change in policy,'” the FCC wrote, quoting circuit precedent. The commission argued for a “deferential standard of review,” in which a court “may not displace the agency’s choice between two fairly conflicting views, even though the court would justifiably have made a different choice."