WTA voiced concern about apparent FCC plans to transfer to the U.S. Treasury USF money currently managed by the Universal Service Administrative Co. "WTA wondered why there has not yet been commenced a formal rulemaking wherein the proposed transfer plans and revised USF administration procedures and rules could be reviewed, analyzed and commented upon," said its filings (here, here) Monday in docket 05-195 on meetings with aides to Chairman Ajit Pai and Commissioner Mignon Clyburn. It cited questions and concerns, including: How would Treasury involvement "reduce risk" and "ensure continued strong financial management" by interposing a new group of Treasury offices and employees between collection and distribution functions performed by USAC since 1999? Who will distribute moneys for the high-cost, Lifeline, E-rate and rural healthcare mechanisms -- USAC or Treasury? WTA is "very concerned" about some statements in a GAO report (see 1706290037) "that appears to have initiated or accelerated the apparent transfer plans," it said. "WTA is concerned about the increased levels of unpredictability likely to be injected into USF administration and revenue streams by the contemplated transfer to Treasury. WTA members and other [RLECs] must employ 10-to-30-year loans to extend and upgrade their broadband networks, and will not be able to obtain or repay such loans if their critical USF revenue streams are periodically disrupted or otherwise become uncertain." The FCC didn't comment.
The Senate reconfirmed FCC Chairman Ajit Pai Monday (see our bulletin 1710020030), and as expected 1709280056), on a 52-41 vote. Four Democrats voted for Pai: Sens. Joe Manchin, W.Va.; Claire McCaskill, Mo.; Gary Peters, Mich.; and Jon Tester, Mont. The final vote followed a floor debate in which Senate Republicans strongly backed Pai and Democrats criticized the chairman for his proposed rescission of 2015 net neutrality rules, Sinclair's proposed buy of Tribune and other controversial policy matters (see 1709150060). Pai's new term lasts until June 30, 2021.
Telcos urged the FCC to give RLEC near-term broadband relief from USF contributions, but consumer advocates said the commission should assess all broadband service in an overhaul of the system funding the subsidy program. USTelecom and NTCA noted no opposition (see 1709140052) to their petition for temporary forbearance from application of USF contribution requirements to rural carrier broadband internet transmission services until the agency settles how all broadband services should be treated. "Commenters agree that the disparate treatment amongst broadband internet access service providers when it comes to federal USF contribution assessments highlights the need for USF reform," they replied in docket 17-206 Thursday. The Eastern Rural Telecom Association also backed the petition: "To not grant temporary forbearance would mean a continuation of this discrimination of this subset of RLEC broadband customers." The National Association of State Utility Consumer Advocates noted there were only three initial comments and said it agreed with the Pennsylvania Public Utility Commission's view that contribution "reform" is needed. "All carriers’ broadband services should contribute to the USF, especially now that all the USF programs support broadband, and support for voice service is being phased out," NASUCA said. "The upcoming USF contribution factor will be 18.8% [of carrier interstate and international end-user telecom revenue], the highest ever, largely because of the low level of assessable non-broadband revenues. Rather than forbear from having the [rate-of-return] carriers contribute, the Commission should expeditiously extend the contribution requirement to all providers of broadband services." The group said RLEC relief "can't reasonably be granted, if at all" until the FCC receives a federal-state joint board recommendation.
The Senate invoked cloture Thursday on FCC Chairman Ajit Pai's reconfirmation 55-41. It begins a long-expected floor debate in which Democrats strongly criticized the commission's proposed rescission of 2015 net neutrality rules, Sinclair's proposed buy of Tribune and other controversial policy matters (see 1709150060). Forty-nine Senate Republicans and six Democrats voted in favor of invoking cloture on the Pai debate, confirming expectations the Democratic caucus wouldn't be fully unified. At least four of those Democrats told us they are planning to support Pai again when a final confirmation vote occurs Monday.
Connections-based USF contribution in Nebraska would be more stable than a revenue-based mechanism because “connections, regardless of technology or revenue trends, are essential for telecommunications,” Windstream replied Tuesday in Nebraska Public Service Commission docket NUSF-100. The company rejected Charter arguments from last week that the PSC shouldn't overhaul its contribution method based on unproven assumptions that revenue may decline forever and that the number of wireless connections will continue to grow (see 1709210038). A Nebraska group of rural independent phone companies rejected warnings by Charter and CTIA about the move to connections. “No amount of revisionist arguments … can change the fact that remittances to the NUSF have steadily and materially declined, or … that the only means to stabilize remittances generated by the current revenue-based mechanism is to increase the surcharge percentage," the rural carriers replied. The PSC is unwilling to increase the surcharge, so contribution must change to a connections-based mechanism, they said. Charter disagreed: “There are serious obstacles to implementing a connections-based approach successfully.” The PSC lacks authority because the FCC gives states authority only over intrastate revenue, and a connections-based mechanism “by its nature is unrelated to intrastate revenue,” the cable company said. Rural carriers want to switch to avoid a cap on revenue-based surcharge, Charter said: Rural carriers support “a new methodology so [rural carriers] can argue (in a later phase) for a larger fund.” Cox, which earlier outlined its terms for changing contribution methods, clarified that it never fully supported an overhaul. Cox said it asked the PSC "to make this change be as simple as possible, [but] it doesn't negate or lessen Cox's concern with Nebraska experimenting with the implementation of a new and untested methodology.” Business customers with many lines might bear an unreasonable burden under connections-based USF if the PSC uses FCC Form 477 data, which doesn’t adequately identify high-capacity facilities, replied the Association of TeleServices International.
Commissioners Mignon Clyburn and Jessica Rosenworcel slammed the 2017 version of the FCC’s mobile wireless competition report, approved 3-2 Tuesday in a party-line vote. Both questioned whether wireless in parts of the U.S. is genuinely competitive. During the Obama administration, the FCC repeatedly declined to determine there's effective competition in the U.S. wireless market. The new report says there is. The disagreement was expected and has been a topic of contention between Republicans and Democrats (see 1709220049).
The FCC invited input on the sufficiency of budgets for E-rate Category Two services, which provide broadband access within schools and libraries at a discount under the USF subsidy program. Comments are due Oct. 23, replies Nov. 7 on how applicants, service providers and others have used their budgets, and the percentage of purchased Category Two services that are being covered by the budgets, said a Wireline Bureau public notice in docket 13-184 and Monday's Daily Digest.
Free Press is increasing its opposition to FCC Chairman Ajit Pai amid perceptions that a Senate floor vote on Pai’s reconfirmation could happen as soon as late this week, two communications sector lobbyists said Monday. Senate Republican leaders have been hoping to invoke cloture on the Pai confirmation vote before the upcoming Columbus Day recess, with up to 30 hours of floor debate ahead of a final vote (see 1709130054 and 1709150060). Free Press is collecting signatures on a petition urging the Senate to “fire” Pai when his confirmation comes up for a vote. “He's failing at his job” and “that means we need the Senate to fire him,” the petition said. “Not a single senator should support” Pai’s agenda. The group cited possible rescission of 2015 net neutrality rules, ongoing concerns about the FCC’s handling of Sinclair, and the debate over the Lifeline USF program. The FCC didn’t comment.
NTCA asked the FCC to begin a "comprehensive' high-cost USF budget review by year-end as contemplated since a 2011 overhaul, and to collect the current budget amount near term. If such collection exceeds current USF demand, the FCC should "use the additional sum to mitigate the shortfalls in support that are being applied only to smaller rural carriers," the RLEC group said. The requests came in a filing Wednesday in docket 10-90 on discussions with aides to Chairman Ajit Pai and Commissioner Jessica Rosenworcel. NTCA asked the FCC "to use any high-cost USF reserves that have not already been expressly allocated pursuant to Commission order to fill the budget shortfall." Once a budgetary review is completed, "the Commission can then make informed, updated judgments about the 'right size' of the high-cost USF budget," it said.
Industry cautioned Alaska and Nebraska regulators about their state USF revamps, in comments posted this week. At the Regulatory Commission of Alaska, AT&T and rural phone companies said a proposed short-term fix should be temporary and the RCA should launch a more comprehensive proceeding. In Nebraska, wireless carriers asked the Public Service Commission not to proceed with a proposed shift to connections-based USF contribution.