FCC Chairman Ajit Pai criticized a USF rate floor and plans to seek action to "protect rural Americans from unjustified government-mandated rate increases in coming months." He said the rate floor requires USF-backed carriers to charge a minimum amount or lose subsidies. "The rate floor has forced many rural customers to pay higher rates than some of their urban counterparts," without corresponding benefits, he said, sharing concerns of Sen. Tom Cotton (R) and others in the Arkansas delegation (exchange posted Thursday in docket 19-9). Pai noted the FCC in 2017 froze the rate at $18 per month through July 2019 to head off increases to $20 and $22, and adopted an NPRM seeking comment on whether to eliminate the rate floor. NTCA officials say the rate floor could cause rural rates to "skyrocket." Separately, rules prevented the FCC from granting two telco co-op relief requests for increased model-based high-cost USF support, said Pai, responding to Sen. Roy Blunt, R-Mo. (here), and Rep. John Shimkus, R-Ill. (here).
The Schools, Health & Libraries Broadband Coalition urged the FCC to resolve open issues in its USF Rural Health Care Program and make changes to its Telecom Program and Healthcare Connect Fund components. SHLB proposals included increasing a $581 million annual cap to $800 million, adopting a deadline for processing RHC applications, clarifying a “rural” definition and providing support “for 95 percent of the difference between the urban and rural rates (except in Alaska) in order to reduce funding delays and expedite application approvals,” said a release on comments posted Thursday in docket 17-310 responding to a public notice. Six months after a funding year 2018 application deadline, “a sizable number of RHC applicants still have no idea whether they will be funded,” said Executive Director John Windhausen. “The demand for RHC funding has exceeded the funding cap the last two years, yet there’s still no policy or precedent for how funding should be allocated when this occurs. The program has become shrouded in ambiguity and uncertainty, and we fear that the rural healthcare providers most in need will withdraw from the program.” AT&T said the FCC should phase out the Telecom Program outside Alaska and adopt "E-rate best practices" during the transition. Alaska Communications proposed rural and urban rate calculations "using an administratively simple, lowest corresponding price rule, or a convenient rate matrix, which would serve as a ceiling in the case of rural rates, and a floor in the case of urban rates, to ensure that support remains predictable and the size of the RHC program remains reasonable." TeleQuality Communications suggested "a market-based approach as an alternative to establishing a more complicated regulatory regime for the Telecom Program." GCI Communication urged the FCC to "ensure that rural rates are determined by the market," without additional rate regulation or cost studies. GCI supplemented an application for review seeking FCC reversal of a Wireline Bureau reduction in its RHC support by 26 percent in FY 2017 (see 1811130040) with information it "could not have known or addressed at the time" of its appeal.
Rep. Anna Eshoo, D-Calif., is defending a letter she and other lawmakers wrote the FCC and DOJ Antitrust Division to support T-Mobile's proposed buy of Sprint amid criticism from groups opposed to the deal. House Communications Subcommittee Chairman Mike Doyle, D-Pa., said he's not concerned opinion among subcommittee Democrats may be divided on the transaction. House Communications and the House Judiciary Antitrust Subcommittee are to examine T-Mobile/Sprint during a Feb. 13 hearing (see 1901280051). Two other House Communications members joined Eshoo in signing the letter -- Reps. Billy Long, R-Mo., and Kurt Schrader, D-Ore.
The Oklahoma Corporation Commission should promote competitive neutrality by supporting legislation to require state USF collection at the point of sale (POS) for prepaid services sold by third-party retailers, CTIA commented, posted Monday in docket PUD-201800066. Legislators prefiled two such bills (HB-2606 and SB-730) for introduction Feb. 4 when the session opens. Most Oklahoma USF contributors including postpaid wireless can collect contributions through line items on their bills, but prepaid carriers don’t have a direct retail relationship with customers who buy service through third parties, CTIA said. The OCC doesn’t have jurisdiction over the third-party retailers so it can't require they remit surcharges, it said.
Huawei Technologies fired back at the Telecommunications Industry Association for arguing the National Defense Authorization Act means the FCC can bar use of USF money to buy from companies that “pose a national security threat” to U.S. communications networks or its supply chain (see 1812100045). TIA’s views are “far afield of the actual provisions of law relevant to the Commission’s proceeding,” Huawei said in docket 18-89. TIA “repeatedly conflates distinct provisions of the NDAA; for example, by arguing that ‘Section 889 applies to the USF programs’ without distinguishing between different paragraphs within that section that contain different terms,” Huawei said: It “transparently tries to reframe the issue by characterizing any reading of the statute with which it disagrees as ‘creating a USF exception.’” TIA "stands by our comments and reply comments," a spokesperson said.
House Communications Subcommittee leaders diverged on approaches to net neutrality legislation, during the State of the Net conference Tuesday. Chairman Mike Doyle, D-Pa., staked out a partisan agenda on that and other telecom policy issues. Ranking member Bob Latta, R-Ohio, emphasized the need for continued bipartisanship on the House Commerce Committee as the GOP settles into its new role as the minority party. Their comments came ahead of House hearings on net neutrality and T-Mobile's proposed purchase of Sprint, which also got attention Tuesday (see 1901290040).
FCC Chairman Ajit Pai's decision to move up a Feb. 21 monthly meeting to Feb. 14 was welcomed, given potential for another shutdown after Feb. 15 (see 1901290014). Pai announced Tuesday the tentative agenda would be the same five drafts originally planned for Wednesday's meeting, now item-less due to the recent shutdown (see 1901230058). Separately, the FCC delayed to Feb. 8 deadlines on many filings due Jan. 8-Feb. 7 (see 1901290043).
The full federal government got back to work Monday, after a prolonged partial shutdown that shuttered the FCC, FTC, NTIA and other agencies overseeing communications policy. Incoming FCC Commissioner Geoffrey Starks will be sworn in Wednesday by Chairman Ajit Pai in an eighth-floor conference room and will participate in the commissioners’ meeting that follows, said industry officials. President Donald Trump signed off Friday on a continuing resolution to reopen the FCC and other shuttered agencies through Feb. 15, after the House passed the measure as expected (see 1901240016).
Oklahoma sought bids for support services for state USF for schools and libraries. The Oklahoma USF administrator will consider proposals for a one-year contract that would start Feb. 14 and could be renewed up to five times, said a request for proposals Thursday. The administrator seeks “a partner to provide education, training, and support services to ensure that the OUSF Administrator, public schools and libraries in Oklahoma are receiving necessary support, and therefore E-rate funding, as a means assisting in the management of costs to the OUSF,” said the RFP. “It is critical to Oklahoma schools and libraries that the OUSF Administrator is versed in the Federal E-rate program and that the OUSF process does not run counter to the Category 1 process.” Proposals are due Feb. 4.
The shutdown is having immediate FCC consequences in the form of delayed filing deadlines and shuttered websites. It could also ripple out to delay expected rule changes for 2019, industry officials told us this week. Since staff isn’t available, expected early-2019 policy decisions on kidvid and rate regulation, court cases and progress of deals such as T-Mobile buying Sprint are considered likely to be delayed.