The Competitive Carriers Association warned that amounts proposed for the Mobility Fund II are inadequate. Replies were due last week on oppositions to various reconsideration petitions on the February FCC order launching the MF-II (see 1702230042). U.S. Cellular recently released a study on how much funding would be necessary to build and maintain a 4G LTE network in rural areas, CCA said. “Annual maintenance capital costs ... would be approximately $1.05 billion, while annual operational expenses ... would be approximately $1.08 billion, in total approximately five times the amount budgeted for MF II,” CCA commented in docket 10-90. “Absent contrary evidence, such a fact-driven study should be relied upon by the FCC to determine an appropriate budget.” CCA asked the FCC to rethink a requirement that MF-II fund applicants secure a letter of credit before authorization of support. The requirement could limit the number of companies that apply, CCA said. It's "critically important that this USF support reaches areas in-need, especially unserved and underserved locations, and the FCC must implement a framework that encourages robust participation in the program through clear, cost-efficient goals,” President Steve Berry said in a news release. T-Mobile defended its arguments to reconsider MF-II order speed and latency thresholds. The carrier said it “demonstrated that the speed requirements adopted in the Mobility Fund Order exceed the actual median data speeds consistently provided.” Only the Rural Wireless Association opposed its calls for change, T-Mobile said. RWA said it was right to urge the FCC to utilize a 5 Mbps download threshold to determine an area’s eligibility for MF-II support, instead of 10 Mbps: The lower number "conflicts with the Commission’s statutory mandate to ensure that rural areas have access to services that are reasonably comparable to those available in urban areas.”
State regulators welcomed news the USF contribution factor may not change in Q3, but some voiced continued concern about the long-term trend toward rising assessments on telecom carriers. "Fortunately, the USF assessment factor won't be increasing this quarter due to lower than anticipated demand on the E-rate program," emailed South Dakota Public Utilities Commissioner Chris Nelson Friday.
The Nebraska Public Service Commission executive director resigned after he couldn’t agree with the agency on a resolution to conflict-of-interest questions, the state telecom regulator said. Government watchdogs decried possible conflict of interest after Nebraska’s attorney general found no violations by PSC Executive Director Jeff Pursley, who consults on the side for telecom companies (see 1705170037). “The Commission and Dir. Pursley agreed that he would sever his ties with his part-time employer,” a PSC spokeswoman emailed us. “However, they could not come to an agreement on when that would occur and Director Pursley chose to resign.” The resignation is effective June 12; Pursley’s duties will be absorbed by staff until a new executive director is hired, the commission said in a Thursday news release. “Jeff is a man of many of talents,” said Chairman Tim Schram, praising Pursley’s USF experience.
ITTA and USTelecom asked the FCC to ease business data service regulations for some rural telcos by allowing them to opt into recently adopted relief for price-cap carriers. "Rate-of-return carriers that receive universal service fund ('USF') support based on theoretical cost models (termed 'model-based rate-of-return carriers) must comply with legacy regulation only for their BDS offerings," said a petition for rulemaking Thursday. "Costs of such rate-of-return regulations for these carriers now outweigh the benefits of the regulation." The petition "requests that model-based rate-of-return carriers be permitted to opt into existing price cap regulation for their provision of BDS, subject to certain conditions. ... Continued compliance with rate-[of]-return-based rate regulation, including tariffing, tariff review plans, cost studies, and associated requirements, entails significant costs that are difficult for model-based rate-of-return carriers to recover in the competitive marketplace."
The FCC should hike rural healthcare funding and spur high-speed deployment, some parties said regarding the agency's broadband healthcare solutions initiative. The Schools, Health & Libraries Broadband Coalition, the American Hospital Association, Alaska groups and others urged the FCC to increase the USF healthcare connect fund's $400 million in annual support. Communications industry interests sought actions to remove barriers to broadband deployment and free up more spectrum. Almost 70 comments were filed in docket 16-46 by Thursday.
Rural telco groups and CenturyLink urged FCC caution in revising separations rules for how costs are allocated between the federal and state jurisdictions. ITTA said the FCC should eliminate the separations regime for price-cap carriers. Comments were posted Wednesday and Thursday in docket 80-286. The FCC recently extended a freeze on jurisdictional separations rules for 18 months while a federal-state joint board attempts to develop new proposals (see 1705150064).
FCC staff denied a Stratos Government Services request to exempt subcontractors from making certain USF contributions. Stratos in 2009 asked the commission to broaden the scope of a USF contribution exemption -- for entities providing interstate telecommunications exclusively to government or public safety entities -- by extending it to subcontractors. "Stratos asserts that the language of the government-only exemption itself is unclear and that the policy underlying the exemption supports including subcontractors," said a Wireline Bureau order Wednesday in docket 06-122. "We disagree with Stratos’s assertion that the language of the exemption itself is unclear because it does not explicitly include subcontractors." Separately, the bureau partially granted and partially denied a Morris Communications bid to reverse a Universal Service Administrative Co. decision denying the company's "request to reverse principal and late payment fees attributable to unpaid [USF] contributions, including those associated with a revised 2000 FCC Form 499-A." Morris said the USAC decision was unlawful and procedurally defective, and it was unable to pay due to changed financial circumstances. "We find no basis to reverse USAC’s decision and conclude that Morris has failed to demonstrate good cause that would warrant waiver of our rules," said a bureau order Tuesday. "Late payment fees based on Morris’s revised contribution obligation for the period in question were excessive. ... [W]e direct USAC to adjust those fees to reflect the updated contribution obligation for that period."
The industry USF contribution factor could stay in Q3 at 17.4 percent of carriers' U.S. interstate and international (long-distance) telecom end-user revenue, industry consultant Billy Jack Gregg emailed Wednesday. Previously, he projected the Q3 contribution (assessment) factor could spike to 19.6 percent, based on Universal Service Administrative Co.'s estimate for quarterly USF subsidy demand (see 1705030049). That sparked some concerns (see 1705040059).
The Missouri Public Service Commission sought more comments on a state USF proposal to add support for broadband-only services under its Lifeline and Disabled programs, said a notice last week. The agency asked how the proposal might affect the state USF’s projected 15 percent year-over-year participation decline. Comments are due June 5. Big telecom companies opposed expanding state USF support in comments earlier this month (see 1705020022).
Under a draft order, the FCC would reconsider a 2016 rural USF overhaul's treatment of rate-of-return telco provision of consumer broadband-only loops (CBOLs), a commission spokesman emailed Monday. "It relates to rules on the surrogate cost method for determining the cost of CBOLs and the ARC [access recovery charge] imputation methodology." NTCA discussed various ways to address "questions raised by its petition for reconsideration and/or clarification regarding imputation of Access Recovery on standalone broadband lines," said a filing by the RLEC group Friday in docket 10-90 covering a Wednesday phone call with an aide to FCC Chairman Ajit Pai. NTCA urged the agency "to adopt relief targeted along the lines of what NTCA requested in its petition, and to ensure that whatever relief is adopted will not have a material adverse impact on universal service support under a fixed budget." The recon item was sent to commissioners Thursday, according to the agency's circulation list, which was updated Friday.