Rural telcos said FCC constraints are "ravaging" their ability to meet broadband needs. "Budget control mechanism 'haircuts' -- now in the 12-to-15 percent range and apparently increasing to 19-to-20 percent or so in 2018 -- are the primary current factor disrupting the predictability and sufficiency" of "critical high-cost support revenue streams," said a WTA filing Friday in docket 10-90 on meetings it and members had with Wireline Bureau officials. "Growing shortfalls are making it extremely hard to undertake broadband extensions and upgrades and obtain the loans needed to finance them; forcing cutbacks in staffing, maintenance and service operations; and making it difficult to repay existing broadband construction loans." They urged "the current high-cost support budget for Rate-of-Return carriers be increased, and that relief be provided from the burgeoning budget control mechanism 'haircuts' ravaging RoR Path RLECs." The FCC should address "issues teed up for reconsideration or further action in connection with high-cost [USF] reforms, including a recommended, readily available path toward helping to mitigate the pervasive insufficiency of USF support and greater prospective confirmation as to the eligibility of certain expenses for cost recovery," said an NTCA filing on a meeting with an aide to Commissioner Mike O'Rielly.
FCC commissioners approved temporary rules providing immediate relief to schools and libraries contending with “devastation” caused by Harvey, Irma and Maria. It makes "available targeted support to schools and libraries that are forced to rebuild facilities and replace equipment damaged by the Hurricanes, and provide increased flexibility for eligible services to be restored through service substitutions,” said a Monday order in docket 02-6. “We also make additional E-rate support available for schools that are incurring additional costs for eligible services, e.g., for increased bandwidth demand, because they are serving students that have been displaced by the storms, even though they may not be contending with substantial physical damage.” The storms together caused an estimated $150 billion-$200 billion in damage to areas of Texas, Florida and Georgia “and to virtually all of Puerto Rico and the United States Virgin Islands,” the agency said. Commissioner Mike O’Rielly said the FCC should work with Congress to determine whether the USF programs could be reimbursed through funding targeted to hurricane relief. “Because of our budget limitations, providing additional funding from universal service generally comes at the expense of other recipients,” O’Rielly said.
Large telcos and others urged the FCC to complete an intercarrier compensation move to bill-and-keep arrangements under which carriers don't charge each other for exchanging traffic, and speed the transition to IP-based networks. Rural telcos urged a more cautious approach and further FCC action only after addressing USF subsidy "shortfalls." Comments were posted Thursday and Friday in docket 01-92 on a public notice seeking to refresh the record as a lengthy phaseout of many terminating charges continues under a 2011 overhaul.
NARUC blasted the FCC for rejecting what the agency termed the “blunderbuss approach” of the Minnesota Public Utilities Commission applying state regulations to Charter Communications’ fixed interconnected VoIP service (see 1710270053). In an amicus brief Friday at the 8th U.S. Circuit Court of Appeals, the FCC said allowing Minnesota to regulate VoIP would disrupt the market, stifle competition and hurt consumers. The federal agency again declined to say if it's a telecom or information service. But its statement could have big impact in the case and on the broader question of whether states can regulate such services, observers said.
An FCC draft item would begin an overhaul of the Lifeline USF program subsidizing providers of broadband and voice service to low-income consumers. Three orders would aim to crack down on "waste, fraud and abuse" and two notices would propose to adopt an annual funding cap and seek ways to better target support to those most in need. They would also target funding to facilities-based providers, not resellers. The actions and proposals were contained in a combined draft that Chairman Ajit Pai put on the tentative agenda Thursday for the Nov. 16 commissioners' meeting (see 1710260049).
The Senate Commerce Committee's main telecom policy priority for the remainder of this year is likely to be an amplified focus on broadband infrastructure issues before the long-anticipated release of a White House-backed infrastructure legislative package expected to include a broadband title, lawmakers and lobbyists told us. Other telecom-related issues also could command the committee's attention depending on a range of other factors, including advancement of the Stop Enabling Sex Traffickers Act (SESTA), they said. The committee remains unlikely to take up FCC reauthorization legislation even if the House is able to pass its own version this year, lobbyists said.
Federal judges questioned AT&T more extensively than the FCC about the company's challenge to partial telecom forbearance orders that left ILECs subject to unsubsidized USF voice service obligations. At oral argument (audio) Thursday in AT&T v. FCC., No. 15-1038, AT&T counsel Benjamin Softness of Kellogg Huber was subjected to questioning for 22 minutes by the three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, while the FCC attorney only had 11 minutes (both had been allotted 15 minutes). Chief Judge Merrick Garland disputed AT&T arguments that were based on census block data the company didn't submit before the agency's decisions, and that the FCC carried a particular evidentiary burden cited by the company. AT&T noted afterward it's appealing two FCC orders concerning eligible telecom carrier obligations and designations, with CenturyLink joining as a petitioner and USTelecom as an intervenor. "Compelling providers to provide service in costly-to-serve areas while refusing to provide them with high-cost universal service support violates the Communications Act’s statutory command that the FCC provide 'sufficient' support," emailed AT&T. "These unfunded mandates cause carriers like AT&T to divert capital dollars to maintain [plain old telephone service], a service that few consumers want, instead of using their capital to expand broadband service." The FCC declined comment.
The FCC plans Nov. 16 votes on media ownership and ATSC 3.0, as expected, (see 1710250049), and wireless and wireline infrastructure and cable items, Chairman Ajit Pai blogged, although drafts of the items have not yet been issued. Commissioners also will vote, as expected (see 1710100063), on the next phase of the FCC's spectrum frontiers initiative, setting aside high-frequency spectrum for 5G. The order would make available another 1,700 MHz of high-frequency spectrum “for flexible terrestrial wireless use while providing 4 gigahertz for core satellite use,” Pai said. The FCC approved the first order under ex-Chairman Tom Wheeler in July 2016 (see 1607140052).
The Regulatory Commission of Alaska plans to vote on a short-term fix to Alaska USF and debate more comprehensive USF reform at the commissioners’ Nov. 8 meeting, Commissioner Robert Pickett said at the RCA’s Wednesday meeting. The short-term fix addresses what to do in a shortage situation. On broader changes, Pickett said the existing structure "just does not fit the realities on the ground," but commissioners “have a wide range of opinions” on what to do. Commissioner Rebecca Pauli said she doesn’t know the right approach, but doing nothing isn't an option. The commission should set a date to terminate AUSF and come up with a replacement, Pauli said. Declining Alaska USF revenue led to the RCA proposing a Jan. 1 increase of the AUSF surcharge factor to 15.8 percent (see 1710040011).
FCC Chairman Ajit Pai proposed to assist hurricane-affected schools and libraries in restoring connectivity through the E-rate USF subsidy program. “Yesterday, I shared with my colleagues an emergency order that would help schools and libraries recover from the devastation of hurricanes Harvey, Irma, and Maria," he said in release Wednesday. "This order would provide targeted financial support to these institutions through the FCC’s E-rate program and give them maximum flexibility as they try to restore connectivity. It would also make available additional funds to schools that are serving a substantial number of students displaced by this season’s hurricanes. Once my fellow commissioners have had the opportunity to review this proposed order, I hope they will be able to quickly vote to support this relief.” The Schools, Health & Libraries Broadband Coalition lauded Pai's announcement. "While we have not seen the Chairman's proposal, the SHLB Coalition is very pleased that Chairman Pai has proposed to offer flexible E-rate support to schools and libraries in the areas devastated by the recent hurricanes," said Executive Director John Windhausen. "Fully functioning schools and libraries can help communities get back on their feet and bring hope to struggling families. Restoring Internet access to the schools and libraries can connect teachers, students and families to the world, allowing them to obtain access to essential information to aid the reconstruction effort."