The Utah Public Service Commission tweaked proposed rules but rejected delay for shifting state USF contributions to a connections-based mechanism. In a Monday notice in docket 17-R360-01, the agency accepted some language tweaks by industry suggested in recent comments (see 1708030033). But the PSC disagreed with CTIA and AT&T that the proposed connections-based mechanism may violate federal law mandating that the state mechanism not be inconsistent with, rely on or burden the federal mechanism, which is based on revenue. “The PSC has made every effort to include in the rule provisions that legally separate the UUSF surcharge from any and all interstate revenues,” it said. It said issues raised about how to assess USF fees to prepaid wireless would be addressed through a separate rulemaking or legislative action. “However, the PSC considers that implementing a per-access line surcharge cannot be delayed beyond January 1,” the agency said. “That date is mandated by statute, and is also necessary to allow the PSC to move forward on other rulemaking related to the 2017 legislation.” The amended rule may take effect Oct. 9 at the earliest, the commission said.
The Lifeline Connects Coalition (LCC) asked for reconsideration of an "alarming decision" by the Universal Service Administrative Co. "to reverse course and not provide a service provider application programming interface (API)" to an FCC-mandated national eligibility verifier for the low-income USF support program. The commission and USAC planned the API "so that applicants can seamlessly enroll in Lifeline and access the National Verifier for an eligibility determination," said an LCC filing posted Tuesday in FCC docket 11-42 on a meeting with Wireline Bureau staffers. Providing a service provider API is required by a 2016 Lifeline overhaul order, and "was decided early in the process and included in the Final National Verifier Plan, will reduce opportunities for waste, fraud and abuse and will make the National Verifier more efficient and cost-effective," the group said. The LCC also addressed "subscriber proof of eligibility" migration timing issues, its reconsideration petition on upcoming minimum service standards increases, and a recent GAO call to make Lifeline enforcement and processing improvements (see 1708150023). TracFone Wireless met with Chairman Ajit Pai to discuss Lifeline matters, including its advocacy of commission-adopted "reforms to prevent waste, fraud and abuse." The provider cited its recommendations for further actions, including to prohibit in-person handset distribution and incentive-based compensation for third-party agents. It also discussed implementation of the national verifier, concerns about minimum broadband standards and its various businesses, said a filing Monday. An attached presentation said the company has 25 million U.S. customers and is the largest U.S. prepaid no-contract provider.
NTCA again urged the FCC "to address the shortfall" in high-cost USF support "undermining" the "effectiveness of recent reforms" as "RLECs are being asked to do more with less." Lack of funding for a model-based mechanism means 71,000 rural locations will receive lower-speed broadband, "and 50,000 may see no broadband investment," said the group's filing Tuesday in docket 10-90 on a meeting with an aide to Chairman Ajit Pai. It said a shortfall of $173 million-$283 million over the next year "for cost-based USF recovery will severely harm rural American consumers and businesses in the form of higher prices, lower speeds, and reduced investment." Some 183 NTCA carriers indicated they plan to cut broadband investments over the next year by nearly $950,000, on average, the group said. NTCA said it understood Universal Service Administrative Co., as of now, will cease next year to collect for the overall high-cost USF annual budget of $4.5 billion, instead collecting only what is needs to meet "current demand," which for RLECs, "would include a budget control mechanism that artificially 'suppresses' USF support demand." The group urged the FCC to direct USAC to collect at least the $4.5 billion in support, pending completion of a budget review the agency promised a federal court. The FCC should use reserves to help fill the shortfall, NTCA said, citing USF cash balances that overall "may approach $8 billion as of year-end," including up to $2.2 billion for high-cost support, about $445 million of which is unallocated.
Four Senate Homeland Security Committee leaders urged GAO Monday to refer its May report on continued “weaknesses” in the Lifeline USF program’s management to the FCC Enforcement Bureau and Office of Inspector General “for further investigation and possible enforcement action.” Committee Chairman Ron Johnson, R-Wis., ranking member Claire McCaskill, D-Mo., Investigations Subcommittee Chairman Rob Portman, R-Ohio, and ranking member Tom Carper, D-Del., sought the additional action in a letter to Comptroller General Gene Dodaro. GAO said the Lifeline program’s management remains deficient despite FCC and Universal Service Administrative Co. efforts to improve controls over finances and enrollment by low-income consumers. The report also identified broader problems in USF contribution system oversight and the commission's use of a private bank account rather than the Treasury Department to store $9 billion in USF net assets (see 1706290037). “GAO found numerous examples of [Lifeline] program funds being used to subsidize ineligible or fraudulent subscribers,” the senators said. “Addressing systemic weaknesses in Lifeline management and oversight, along with the referral of each instance of potential fraud identified by GAO, will ensure that the waste, fraud and abuse that [the GAO] identified is eliminated.” They also sought GAO results from undercover testing of Lifeline providers. The FCC and USAC didn’t comment.
A court set oral argument for 9:30 a.m. Oct. 26 on an ILEC challenge to FCC orders that granted incumbent telcos only partial forbearance from USF service obligations. Three-judge panels reviewing a case will usually be named 30 days prior to argument, said the order (in Pacer) of the U.S. Court of Appeals for the D.C. Circuit in AT&T v. FCC, No. 15-1038, which listed USTelecom and CenturyLink as intervenors. Price-cap telco and FCC briefs last year argued the merits of commission decisions leaving carriers subject to unsubsidized legacy USF voice duties on an interim basis in areas where they don't receive new broadband-oriented Connect America Fund support (see 1607120073, 1609070029 and 1609300037).
The FCC invited input on a telco request for targeted USF contribution relief for RLECs while the agency seeks to revise the subsidy program's industry funding system. Comments are due Sept. 13, replies Sept. 28 on a joint NTCA/USTelecom petition seeking temporary forbearance from the application of USF contribution requirements to rural telcos' broadband internet access transmission services, pending commission USF contribution decisions for other broadband services (see 1706140064), said a Wireline Bureau public notice in docket 17-206 Monday.
The FCC listed 13 rural telco study areas that could have USF support phased out because they're subject to complete competitive overlap. Comments are due Sept. 11, replies Oct. 10 "on whether the competitors in the study areas codes (SACs) listed are in fact offering voice and broadband to 100 percent of locations in the relevant census blocks meeting the requirements in 47 CFR § 54.319(a)," said a Wireline Bureau public notice Friday in docket 10-90. The PN provided examples of the most persuasive types of information competitors can offer and described ways the review process was simplified. Following comments and analysis, the bureau said it would publish a final list of rate-of-return study areas subject to total overlap. High-cost USF support in those areas will be frozen at the amount disbursed in the prior year, "and the phase-down in support will commence," to two-thirds of the frozen baseline amount in the first year, and to one-third in the second year, it said.
The FCC inquiry into advanced telecom capability (ATC) deployment signals interest in viewing mobile broadband as a potential substitute for fixed, which would have implications for merger and acquisition reviews and other matters, some parties said. They reacted to a notice of inquiry Tuesday into whether broadband-like ATC is being rolled out to all Americans in a reasonable and timely fashion, pursuant to Section 706 of the Telecom Act (see 1708080070). The prior FCC used negative ATC findings to help justify net neutrality rules and other policy actions under the section's mandate for agency action.
Alaska commissioners disagreed on the future of state USF, at their teleconferenced Wednesday meeting in Anchorage. The Regulatory Commission of Alaska voted 3-2 to seek more comments on proposed rule changes for what to do in a USF shortage situation, a short-term effort to stem bleeding of the fund. The RCA asked comment on a revised proposal reflecting some industry suggestions from the previous comment round, in which some telecom providers said they would prefer more comprehensive USF changes (see 1708010024). Commissioner Jan Wilson voted no, preferring comprehensive to “piecemeal” changes to the fund. Commissioner Rebecca Pauli voted against moving forward because she doesn’t see a financial crisis in the Alaska USF and she doesn’t believe the RCA should regulate telecom since the agency can’t keep up with communications technology, she said. “Things are moving too fast. … I’m just not sure what we bring to the table.” But Commissioner Bob Pickett said AUSF is of “major concern” because the contribution surcharge is rising fast and the fund is “largely unaccountable” as it runs on “automatic pilot.” He agreed the RCA may not be adding much value to telecom, but said: “Does that mean I’m going to sit here and watch a grant program go down the road, not directed by any coherent, discernible and verifiable public process? No, absolutely not.”
The FCC's going from three to five commissioners (see 1708030060) isn’t likely to alter Chairman Ajit Pai’s momentum and main policy agenda, but it could lead to shifts on lower-profile items and possibly a slightly slower-moving commission if Pai seeks to include all the members in deliberations, industry officials said Friday. Former officials said the additions likely means Commissioner Mike O’Rielly’s role will grow in stature. Telecom, cable and satellite representatives expect little to no learning curve given the experience the two bring. Commissioner Brendan Carr may not trigger any notable change in Pai’s agenda, since pet interests of his very likely could be baked into Pai’s priorities.