Rural telcos pressed FCC officials for increased USF support and other changes to the subsidy program. Citing almost $1.5 billion in annual "unmet needs" under an "arbitrary' $2 billion rural carrier cap, the Small Company Coalition asked the FCC to tap over $8 billion in reserves to reduce contributions to the system and address the "shortfall" in funding support for small, rate-of-return carriers, in a filing posted Wednesday in docket 10-90 on meetings with Commissioner Brendan Carr and aides to Commissioners Jessica Rosenworcel and Mignon Clyburn. The SCC said Universal Service Administrative Co. audits cost about $250 million but led to only $8 million in recovery of questionable funds in 2016. It urged more focus "on demonstrably problematic programs and bad actors" and use of a "materiality" threshold. The group asked for "eliminating overlapping or outdated reporting requirements" and "raising awareness regarding the impact of shrinking" high-cost loop support.
FCC staff released a USF E-rate eligible service list (ESL) for funding year 2018, adopting two proposals it made to clarify language to assist applicants seeking support for on-premise network equipment, and regarding "the category of service that should apply to inside wiring between different schools or libraries sharing a single building." (Category One services support broadband connectivity to schools and libraries; Category Two broadband within schools and libraries.) "We add to the ESL the proposed clarifying note regarding the eligibility of on-premises Network Equipment with both Category One and Category Two functionalities," said a Wireline Bureau order Thursday in docket 13-184. "On-premises Network Equipment that has both Category One and Category Two functionalities is eligible for Category One support if it is necessary to make a Category One broadband service functional." The bureau also clarified that "applicants should classify inside wiring between two schools sharing a single building as Category Two services." It declined other proposals.
Alaska may increase its state USF surcharge factor to 15.8 percent, a 1.6 percentage point increase, the Regulatory Commission of Alaska said in a Wednesday public notice. The change, effective Jan. 1, would mean a $7.90 state USF fee on a $50 monthly billing of intrastate telecom services, the RCA said. The commission sought comments on the proposed increase by Nov. 2. Decreasing revenue from the state USF has led the RCA to consider short-term and long-term changes to the fund (see 1709210038).
The Alaska Telephone Association voiced concern about FCC reporting duties on rural telcos and mobile carriers receiving USF support under an Alaska Plan order (see 1608310067). The commission required participants to provide maps of existing and planned fiber and microwave middle-mile facilities, said an ATA filing posted Wednesday in docket 16-271 on meetings with aides to Chairman Ajit Pai and Commissioners Michael O'Rielly and Jessica Rosenworcel, and Wireline and Wireless bureau staffers. But recently released agency instructions "require extensive reporting [of] last mile facilities and will be extremely time-consuming and expensive to implement," the filing said. Executive Director Christine O'Connor "expressed concern that without modification, the additional reporting beyond middle-mile facilities will divert significant resources from broadband service and deployment. She asked that participants get access to a "High Cost Universal Broadband" portal ASAP "so they can upload geocoded locations of broadband service where it has already been provided under the Alaska Plan."
NTCA continued to press the FCC to "remedy the shortfalls" in high-cost USF support, initiate a comprehensive budget review by year-end as contemplated by the agency, and, in the meantime, continue to collect the current overall budget amount for the high-cost program. If such collection yields USF contributions "in excess of then-current high cost USF demand," the commission should "use any such additional sums to mitigate the shortfalls in support that are being applied only to smaller rural carriers," said the RLEC group in docket 10-90 on its latest discussion with an aide to Chairman Ajit Pai (here) and a meeting with Commissioner Michael O'Rielly and an aide (here). It asked that "any high-cost USF reserves that have not already been expressly allocated" be used "to fill the budget shortfall" near term, and would welcome other potential solutions "to the ongoing support crisis."
FCC Chairman Ajit Pai acted on Puerto Rico in light of the near meltdown in communications because of Hurricane Maria, but some say there’s more the agency can do. Commissioners took about a day to approve an order (see 1710030057) making up to $76.9 million immediately available for the restoration of communications networks in Puerto Rico and the U.S. Virgin Islands. “The FCC’s actions are intended to enable carriers to restore essential communications services as quickly as possible,” said a news release.
E-rate USF subsidies for school and library voice services plunged under an FCC shift to broadband support that includes a four-year phaseout of voice support ordered in 2014, said a Wireline Bureau report in Tuesday's Daily Digest. It said voice discounts were $708 million (34 percent) of $2.1 billion of total E-rate funding in funding year 2014 but dropped to $259 million (10 percent) of $2.5 billion in FY 2016. Applicants seeking voice support dropped from 24,575 in FY 2014 to 18,884 in FY 2016, "though most of the applicants who no longer apply for voice services continue to seek E-rate support for other services," said the report, which stemmed from the 2014 order. "If the Commission takes no further action after the Bureau issues this report, the phasedown will continue until no funding is available for voice services in funding year 2019." NTCA and TDS (see 1703030013) asked the FCC to keep E-rate voice discounts; T-Mobile urged the commission to carefully consider requests to reconsider the voice phaseout (see 1708090044).
Reps. Kevin Cramer, R-N.D., and Collin Peterson, D-Minn., led a letter from 37 House members that urged the FCC to do a review of the High Cost USF program budget and proposed an interim change aimed at mitigating current budget constraints before a review. The letter follows up on concerns lawmakers raised in May about USF (see 1705020056). “We strongly urge you to maintain level collections from telecommunications companies into the future” before the review or High Cost USF budget adjustments, the lawmakers wrote to FCC Chairman Ajit Pai. “To the extent that the collected sum exceeds High-Cost USF spending obligations at the time, the FCC should directly apply funds to help mitigate or neutralize the budget constraints applied to these smaller, rural operators.” It's “currently unclear” how excess funds “may be obligated under existing budget instructions,” but “their continued collection has the potential to help provide rural communities with comparable broadband services for comparable rates relative to urban areas,” the lawmakers said. “In doing so, the country will move closer to the fund's stated mission.” NTCA CEO Shirley Bloomfield praised the missive.
Fight for the Future launched a campaign Tuesday targeting the four Senate Democrats who voted Monday in favor of FCC Chairman Ajit Pai's reconfirmation. The Senate confirmed Pai on a 52-41 vote, prompting reaction that divided sharply between supporters and opponents of the FCC's 2015 net neutrality rules (see 1710020062 and 1710030064). All four Democrats -- Joe Manchin of West Virginia, Claire McCaskill of Missouri, Gary Peters of Michigan and Jon Tester of Montana -- previously told us they were leaning toward confirming Pai (see 1709280056). Manchin and Peters separately told reporters they were impressed by Pai's focus on increasing rural broadband deployment. “I just need a lot of help in West Virginia, and he’s been moving in that direction,” Manchin said. Pai has been “very receptive to ways to expand broadband access” in Michigan's Upper Peninsula region, Peters said. Manchin and Peters noted ongoing concerns with Pai's bid to rescind 2015 net neutrality rules, which figured prominently in other Senate Democrats' floor speeches opposing the chairman (see 1709150060). Peters said he will now work to “hold [Pai] accountable” on net neutrality. McCaskill and Tester previously cited work with Pai on policy issues like oversight of the Lifeline USF program as a reason to reconfirm him. FFTF tweeted that the four Democrats “voted for an FCC chairman that wants to allow Internet censorship, throttling, and extra fees” and urged the group's supporters to call the senators' offices.
Puerto Rican telco and media industry groups paint a grim picture of communications on the island after Hurricane Maria, with indications full resumption could be a long way off. Some said the FCC's information collection system continues (see 1709270061) struggling. Chairman Ajit Pai is proposing that carriers in Puerto Rico and the U.S. Virgin Islands be allowed quicker use of their USF allocations for network rebuilding.