SAN DIEGO -- As states seek broadband-for-USF and funding tweaks, an FCC member was said to visit the city where state regulators are meeting, NARUC attendees told us. Commissioner Mike O’Rielly was expected to have been in San Diego on Tuesday for closed-door meetings of the federal-state joint boards on Universal Service and Jurisdictional Separations. His office didn't comment. Also at the meeting, states and electric utilities joined local governments protesting balance on FCC Chairman Ajit Pai’s Broadband Deployment Advisory Committee (BDAC).
Net neutrality appears likely to be the marquee issue at the Senate Commerce Committee's Wednesday confirmation hearing for FCC Chairman Ajit Pai and Commissioner-nominees Brendan Carr and Jessica Rosenworcel, but is unlikely to derail the hearing, lawmakers and lobbyists told us. Committee Democrats are more likely to bring up net neutrality and the FCC's other recent controversial actions, lobbyists said. Committee Republicans are likely to want to downplay the net neutrality issue and instead emphasize other telecom issues, lobbyists said. Net neutrality NPRM comments were due Monday (see 1707180009).
NTCA said a funding "disconnect between the Lifeline and high-cost USF programs" left rural consumers "stuck in the 'digital divide.'" Budget constraints and other structural issues limit rural carriers' ability to make 15/2 Mbps broadband available to "large swaths of their service areas," said the RLEC group in a Friday filing in docket 10-90. The FCC provided an "inflation-based update" to the Lifeline low-income subsidy program, but "there is no realistic Lifeline discount large enough to enable a rural low-income consumer to obtain standalone broadband when the 'starting price' for all of the rural consumers in a given area is already far in excess of what is available in urban areas," NTCA said. While the FCC "took steps to remake the Lifeline program for the broadband era and also updated the High-Cost mechanism in recent years, the artificially constrained and arbitrary High-Cost budget is undermining the goals of both the High-Cost and Lifeline programs ... to the detriment" of rural users, the group said. It urged the agency "to reconsider the sufficiency of a budget for the existing High Cost program that is based upon arbitrarily time-locked support levels now more than six years old."
FCC Chairman Ajit Pai responded to letters from Sen. Joni Ernst, R-Iowa, and more than 100 House members earlier this month in response to their concerns about the USF’s stand-alone broadband problem, which prevents rate-of-return (RoR) carriers from receiving USF support for broadband customers using other providers for voice service. Pai noted ongoing FCC efforts to address a “punch list of lingering issues” with the commission’s 2016 order revamping the RoR USF support mechanisms (see 1603300065). Pai also plans to continue his push on rural broadband deployment at the FCC’s Aug. 3 meeting (see 1707130059). Despite the 2016 order, “I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment,” Pai said in letters to Ernst and the House members (see here, here, here and here). “This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America.” Pai said he hopes the changes will help, but the lawmakers “may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem -- for time is not on the side of rural Americans.”
The FCC set a pleading cycle on the planned transfer of prepaid wireline customers in 10 southern states from Global Connection to Tele Circuit Network. Comments are due July 27, replies Aug. 3, said a Wireline Bureau public notice in docket 17-170 in Friday's Daily Digest. Global Connection provides prepaid local and long-distance services in 26 states, and is a Lifeline USF eligible telecom carrier (ETC) in the 10 southern states plus two others. Tele Circuit is a Lifeline ETC in five of the southern states.
Rural telco groups urged the FCC to eliminate or change a rate floor that requires rate-of-return carriers to charge customers a certain monthly amount for basic voice service to avoid losing USF support. NTCA (here), WTA (here) and the Pennsylvania Public Utility Commission (here) were among those seeking to scrap the rate floor in comments posted in docket 10-90 Monday and Tuesday, with the RLEC groups suggesting modifications if the rule is retained. USTelecom said the commission "should take a serious look" at making changes or eliminating the rate floor, while ITTA said it backed "an exploration of whether to disaggregate the current single national rate floor." NCTA said "some form of the rate floor" should be maintained.
DirecTV and Dish Network objections to a proposed hike in direct broadcast satellite regulatory fees lack merit since consumers won't be harmed, the American Cable Association said in an FCC docket 17-134 filing posted Monday. ACA said the Media Bureau's MVPD activities involve DBS providers and cable and IPTV providers equally, and all see equivalent benefits. That justifies the proposed hike and supports full parity among MVPD payers, it said. Dish and DirecTV didn't comment Monday. CTIA, meanwhile, said non-high cost USF full-time equivalent employees who get reallocated should be reallocated as indirect FTEs, and there's no reason for reclassifying FTEs from the Wireline Bureau who work on high-cost USF or other agency-wide issues. It urged rejection of combining commercial mobile radio service and interstate telecommunications service provider regulatory fee categories and of a flat per-license fee on Communications Act international Section 214 authorizations. Level 3 backed AT&T's call for regulatory fees on both common carrier and non-common carrier terrestrial international bearer circuits, saying the FCC should seek further comment on eliminating the IBC fee category in favor of an assessment on each international 214 authorization or each holder of an international 214 authorization.
The FCC simplified annual reporting duties of recipients of high-cost USF support by eliminating rules that it said are duplicative or no longer necessary. The commission, acting on a 2016 Further NPRM targeting rate-of-return telcos, found it could end certain reporting requirements eligible telecom carriers face for network outages, unfulfilled service requests, complaints, pricing information, service quality certification and duplicative Form 481 filings (contingent on Universal Service Administrative Co. implementation of an online portal), said an order in docket 10-90 in Monday's Daily Digest.
A request the FCC consider business data service (BDS) relief for some rural telcos got support from two RLEC trade groups and seven rural carriers, while AT&T said it wouldn't object but raised some issues with proposed continuation of certain rate-of-return regulations. The parties' comments were posted Thursday in docket 17-144. Sprint's opposition and supportive comments from TDS and a smaller RLEC were posted earlier (see 1707060051). NTCA and WTA said they backed an ITTA/USTelecom petition to open a rulemaking to consider allowing RLECs receiving model-based USF support to opt into relaxed BDS rules for price-cap carriers. Both the FCC and individual carriers would "benefit from the efficiency of a clearly defined and carefully constructed path" enabling model-based carriers to convert to price-cap BDS regulation, commented NTCA/WTA. They said, however, the FCC must ensure there aren't "unintended consequences or adverse impacts" on consumers or RLECs not participating in the conversions, with details to be sorted out. Blackfoot Telephone Cooperative and six other "Big Sky" RLECs supported the petition and its substantive proposals. AT&T questioned two aspects of petitioners' proposals to retain other rate-of-return regulations: a waiver of an "all-or-nothing" rule that otherwise requires rural carriers electing price-cap regulation to move both switched access and special access (BDS) to price caps at the same time; and a "one-time unfreeze" of separations factors in setting initial rates. AT&T said the FCC shouldn't waive the all-or-nothing rule and said any one-time unfreeze of separations factors must be subject to public comment.
Utah delayed a shift to connections-based USF contribution until Jan. 1, the Utah Public Service Commission said in a Wednesday notice in docket 17-R360-01. The effective date was Aug. 1, but wireless carriers sought an extension, in comments this week (see 1707050016). “The PSC is in the process of reviewing comments regarding this issue and will alert interested persons as to any further proceedings,” it said. Utah could be the first state to move from revenue-based contribution; other states are also mulling contribution reform (see 1706300049).