The FCC must take steps to simplify and reduce the costs for small carriers to apply for waivers to the commission’s recent USF reform program, said members of the House Small Business Committee during a hearing Wednesday. Subcommittee Ranking Member Nydia Velázquez, D-N.Y., and Rep. Jeff Landry, R-La., said the waiver process is overly burdensome for small businesses, while Rep. Mark Critz, D-Pa., said small carriers are paying up to $300,000 to apply for the program.
State utility commissioners will consider four potential telecom resolutions at NARUC’s midyear meeting in Portland, Ore., on July 22-25. The resolutions ask the FCC to revisit telecom rules, sometimes lauding the federal commission but often asking it to take action. NARUC posted both the resolution drafts (http://xrl.us/bng7ny) and the conference’s final agenda (http://xrl.us/bng7n6) online, the association said late Monday. The resolutions will, according to NARUC, be debated throughout the Portland conference and may become a part of the association’s policy if they are voted out of the telecom committee and are approved by the board July 25.
A federal circuit court opinion affirming an FCC order on the use of high-cost universal service money supports the FCC’s argument in a case over its new quantile regression analysis to limit USF support for high-cost infrastructure, the commission argued in a letter to the court Friday in case number 11-9900. The U.S. Court of Appeals for the D.C. Circuit ruled for the agency Friday in a challenge from competitive carriers, who sued when the FCC set aside USF money to be used later for broadband (CD July 16 p1). In its letter to the 10th U.S. Circuit Court of Appeals, the FCC said the court decision was a “pertinent authority” that supports the commission’s argument that it would not be in the public interest to stay implementation of the new methodology for imposing limits on expenses that rate-of-return regulated LECs can recover through USF. The FCC also noted that the D.C. Circuit “discussed, with approval,” an FCC waiver process used to provide additional subsidies to telecom carriers. “The Court’s holding is entirely consistent with the FCC’s position … that a waiver for an individual carrier -- rather than a stay of the benchmarks -- is the appropriate remedy where the impact of the benchmarking methodology could undercut consumer access to voice and broadband services,” the FCC wrote.
The regression analysis-based caps on USF support appear to have been implemented without any publicly available testing to confirm or falsify them, the NTCA told FCC Commissioner Ajit Pai and advisers Friday (http://xrl.us/bng3ej). If such testing has been conducted, the commission should produce the results; if not, the commission should suspend the caps, conduct testing and ultimately provide much clearer rules to enable company managers in the field to understand which investments will be recoverable through USF support, NTCA said. Otherwise, the association cautioned, “rural broadband investment by small rural carriers may grind to a halt."
Deciding whether to accept FCC broadband funding under Phase 1 of the Connect America Fund will depend on many factors, not just on the amount of per-household support available, Verizon told an aide to Commissioner Ajit Pai on Thursday (http://xrl.us/bng3br). The company was awarded $20 million to deploy broadband to unserved areas at a subsidy of $775 per location, and has until July 24 to state whether it will take the money (CD July 10 p5). Regarding frozen universal support for broadband operational expenses, carriers should be afforded maximum flexibility in using the funds if the permanent Connect America Fund is delayed, Verizon said. It offered suggestions for near-term changes to the USF contribution system, including annual modifications to the Form 499 instructions for notice and comments, resolution of issues regarding potential contributions on multi-protocol label switching-enabled service, and cleaning up the reseller exemption process. Verizon also opposed subjecting text messaging revenues to USF assessments for the first time.
The FCC opposed a motion for stay filed by the National Telecommunications Cooperative Association in the 10th U.S. Circuit Court of Appeals. NTCA had asked the court to suspend implementation of a Wireline Bureau order adopting a methodology for limiting capital and operating expenses that rate-of-return regulated LECs can recover through the USF (see related story in this issue). In its filing Thursday, the commission opposed NTCA’s request, arguing the association had not demonstrated the irreparable harm needed for a stay. “Even beyond that, NTCA does not contend that the economic harm caused by the modest reductions in support resulting from the benchmarks, which are being phased-in over 18 months, imminently threaten the existence of any carrier,” the FCC wrote. Staying implementation of the Regression Order would “perpetuate the problematic incentives and funding inequities associated with the Commission’s existing rules and delay much-needed reforms intended to benefit consumers,” the FCC said.
More than 650 telecom providers signed a letter to commissioners “to ensure” the FCC and Congress “have clear and unambiguous notice of our collective concerns with the ‘regression analysis'-based caps” on USF support (http://xrl.us/bngrm9). A NTCA spokeswoman said the letter was an industry-wide effort in which several national and state associations, other groups and individual members “all reached out collectively to raise the visibility of this issue among policy makers in Washington.” The commission has received eight waiver petitions dealing with support reductions, of which one has been granted interim relief, a spokesman said. The commission also got two expedited waiver petitions dealing with boundary data, which it granted.
The U.S. Court of Appeals for the D.C. Circuit upheld the FCC in a challenge from competitive carriers, who argued that the FCC “put the cart before the horse” when it ordered that relinquished USF monies shouldn’t be redistributed among a state’s eligible telecom carriers. Instead, the FCC set aside the money to be used later to pay for broadband. The Rural Cellular Association, joined by the Universal Service for America Coalition, argued that the January 2010 order violated the Communications Act and FCC regulations and was arbitrary and capricious in that it fell short of explaining how it ensures the “sufficient” level of support for CETCs required by the act.
NASUCA has asked that all interested parties get a 30-day extension to file reply comments on changes to the USF contribution methodology (http://xrl.us/bngnky). NASUCA argued the 28-day reply period is inadequate to review the 1,465 pages of comments in 79 filings made as of noon Wednesday. “Additional time is needed to review and study the initial comments and potentially to formulate thoughtful reply comments,” the association told the FCC, asking for the reply deadline to be extended from Aug. 6 to Sept. 6.
NTCA met with FCC Commissioner Jessica Rosenworcel’s wireline aide, Priscilla Argeris, to discuss concerns over the lack of transparency and predictability in the new regression analysis-based caps on USF support, said an ex parte filing detailing Monday’s meeting (http://xrl.us/bngevj).