Lawmakers hammered the FCC over the costs and burdens that telecom carriers for tribal communities face when seeking waivers to the commission’s USF reforms. The barrage came at a hearing held Friday by the House Subcommittee on Indian and Alaska Native Affairs. Subcommittee Chairman Don Young, R-Alaska, was particularly critical of the commission’s high-cost order, which he said will lead to the eventual demise of the carriers that serve rural and tribal America. The FCC said that they did not agree with Young’s “characterization."
The FCC Media Bureau adopted a consent decree with the University of San Francisco and Classical Public Radio Network in San Francisco concerning the proposed assignment of the license for KUSF(FM) San Francisco from USF to CPRN. The decree stipulates that the organizations violated rules that prohibit noncommercial educational stations from selling program time for a profit, the bureau said in an order (http://xrl.us/bna7yt). Both organizations will collectively make a $50,000 voluntary contribution to the U.S. Treasury, it said. The bureau’s investigation into the violations is terminated, it said. The entities violated the rules in connection with a public service operating agreement, bureau Chief Bill Lake said in a statement (http://xrl.us/bna7z2). USF agreed to allow the programmer “to provide substantially all of the programming for the station in return for a monthly payment that exceeded the station’s expenses,” he said. “I hope our action in this case will serve as a reminder of the need for complete accuracy in all application filings."
Cox Communications opposed a telco’s USF waiver request. Accipiter Communications’ FCC petition (CD June 4 p5) “relies heavily on its inaccurate account of the facts involving” the telco’s “efforts to provide service in Vistancia, a subdivision in Peoria,” Ariz., which Cox serves, the cable operator said. “Accipiter also fails to meet the requirements for a waiver or to demonstrate that a taking will occur unless a waiver is granted.” Cox said in a filing posted Wednesday to docket 10-90 (http://xrl.us/bna5dz) that it’s “been subject to multiple attacks by Accipiter in Commission proceedings, starting in late 2010."
Senate Indian Affairs Committee members urged FCC Commissioner Mignon Clyburn to consider how proposed reforms of the Universal Service Fund could negatively affect rural and native communities, during a hearing Thursday. In particular, lawmakers took issue with the hurdles and cost of the FCC’s waiver process for telecommunications companies that cannot adjust to the USF reforms.
The FCC Wireline Bureau asked Albert Hee, CEO of Sandwich Isles, a carrier in Honolulu, a battery of questions about its businesses practices, in a letter sent Wednesday. The carrier gets USF support of as much as $13,000 per line. The carrier asked for a waiver of new FCC rules limiting high-cost support to $250 per line per month. An “overwhelming majority of Sandwich Isles’ expenses -- many millions of dollars -- consist of significant payments to a number of affiliated companies” and many of them are owned by Hee, or family members, the letter notes. In its request seeking a waiver, “Sandwich Isles has failed to be forthcoming regarding its affiliates, the finances of these affiliates” and other financial matters, the FCC said. The letter was released on the eve of a hearing by the Senate Indian Affairs Committee on USF reform, at which Hee is expected to testify. “We strongly disagree with the FCC’s categorization of Sandwich Isles’ responses as not being forthcoming,” said Rick Joyce, a lawyer at Venable who represents the carrier. “We have responded to every single question the FCC has presented and have repeatedly invited the FCC to meet with the owners, lawyers and accountants to answer any questions they might have."
FCC Chairman Julius Genachowski circulated a draft fourth USF and intercarrier compensation reconsideration order, addressing how waivers will be handled by the agency. The standard set in the original order was more focused on consumer issues and loss of voice service, a commission official said. The order adjusts the standard to take broadband into account, since broadband was the major focus of October’s landmark USF/intercarrier comp reform order. The Wireline Bureau also plans to issue in the next few days an order providing some relief for one of the five rate-of-return carriers that have sought a waiver of the $3,000 annual per-line support limit imposed by the October order, the official said. The bureau is likely to grant relief to one or two of the other waiver applicants as well, the official said.
U.S. network operators’ privacy practices generally work, and the FCC has a role to play on the issue, Chairman Julius Genachowski said. Both the FCC and the FTC have “a very important role,” one that’s “in many respects” complementary, he said in a Q-and-A Tuesday at an FCBA luncheon. “In other respects they overlap,” Genachowski said of the agencies’ privacy roles, with the FCC focused on networks and “the FTC is more focused on apps.” He again said an update of the 1996 Telecom Act may be a good idea.
The FCC Wireline Bureau seeks comment on its proposed data specifications for collecting study area boundaries to implement reforms that are part of the USF/intercarrier compensation order (http://xrl.us/bnabtn). The bureau proposed to collect boundary data from all ILECs using the same data specifications, and seeks comment on the proposal. The data collection is in response to concerns over the accuracy of Tele Atlas wire center data used to determine benchmarks to limit recovery of capital costs and operating expenses for high-cost loop support, a public notice said. Accurate service area boundaries will also be necessary in order to implement the Connect America Fund Phase II reforms, which will use a combination of competitive bidding and a forward-looking cost model to provide USF money in areas served by price-cap carriers. The bureau sought comment on a voluntary process for state commissions to resolve overlap claims. Comments are due July 2 in docket 10-90, replies July 17.
Recent FCC changes to USF subsidies for rate-of-return ILECs are “modest and overdue,” CTIA and NCTA argued Friday in oppositions to several requests for commission-level review of new rules designed to limit reimbursable capital and operating costs. They said a stay would harm competing providers if the ILECs were “allowed to continue receiving excessive and inefficient amounts” of high-cost loop support (HCLS) in areas where the support is unwarranted. The NTCA, OPASTCO and others petitioned for review of the Wireline Bureau’s HCLS Order in late May, arguing the quantile regression methodology imposes unreasonable burdens on rural LECs, applies support limits randomly and will fail to provide incentives for efficient operations (CD May 29 p7).
U.S. Agriculture Secretary Tom Vilsack thinks the new FCC rules on high-cost loop support make the USF less predictable, and that the Wireline Bureau’s waiver process uses the wrong standard, he told FCC Chairman Julius Genachowski last week. The commission has received several petitions for review of the Wireline Bureau’s HCLS Benchmarks Order setting out a regression methodology for determining reimbursable support on capital expenditures. Six companies have filed waiver requests of the various rules adopted in last fall’s USF/intercarrier compensation order, an FCC spokesman said.