Satellite operators and WTA suggested a variety of changes to rules the FCC adopted between 2001 and 2004, in filings (see here, here and here) posted Friday in docket 16-251. The comments deadline in the Regulatory Flexibility Act rules review is May 15. Intelsat recommended eliminating Section 25.170's requirement for satellite operators to annually report satellites and spectrum unavailable for service, contact information for interference resolution and construction process and expected launch dates of authorized replacement satellites. It said the Section 25 requirement is largely redundant given other filings and notices, and requires something of satellite operators that terrestrial operators don't need to do. It also recommended modification of Section 25.119 rules requiring prior approval of pro forma transfers of control of non-common carrier satellite and earth station licenses, calling it "illogical" non-common carrier licenses holders "must undergo the labor- and time-intensive process of submitting an application for FCC approval" even though the agency recognizes pro forma transfer applications don't raise public interest issues. It recommended discontinuation of Form Schedule S, which contains technical information regarding proposed space station operations -- information that could be provided in spreadsheets and narratives "without having to use the burdensome Schedule S software." EchoStar and its Hughes Network Systems listed six Part 25 rules and two Part 2 rules they said should be eliminated or revised as "duplicative, unduly burdensome and no longer in the public interest." They include 25.111(e), requiring submission of a paper copy of an application to the International Bureau; 25.112 (a)(3), (b), not allowing applications for satellite use of spectrum prior to international allocations for such use; and 25.114, requiring separate space and earth station applications operating in the same network. WTA suggested eliminating or revising several Section 54 reporting requirements. One regulation it singled out for deleting was the Section 54.305 rule that provides high-cost support to a carrier acquiring exchanges from an unaffiliated carrier, with WTA saying it has created "orphan" exchanges that require separate accounting and come with high costs while getting little USF support. WTA also said Form 477 filing requirements should be annually, calling the current, twice-a-year requirement "very time consuming and expensive" for RLECs.
The FCC should stop states from writing broadband privacy rules or regulating VoIP and IP services, Commissioner Mike O’Rielly said Friday in remarks to the American Legislative Exchange Council (ALEC) in Charlotte, North Carolina. The Republican commissioner said he has discussed both with Chairman Ajit Pai. More than 10 states are mulling ISP privacy bills responding to President Donald Trump and Congress for using the Congressional Review Act to kill FCC privacy rules (see 1705050042). “It is both impractical and very harmful for each state to enact differing and conflicting privacy burdens on broadband providers, many of which serve multiple states, if not the entire country," said Pai. "If necessary, the Commission should be willing to issue the requisite decision to clarify the jurisdictional aspects of this issue.” O’Rielly slammed the Minnesota Public Utilities Commission, which is battling with Charter over VoIP classification in U.S. District Court in St. Paul (see 1704040043): “Such inappropriate jurisdictional overreaches by states should be nipped in the bud.” O’Rielly, the federal chair of the Joint Board on Separations, acknowledged the FCC hasn’t made a clear statement about VoIP jurisdiction. “The commission should have just declared VoIP to be an interstate information service,” he said. “Arguably, VoIP is just an application not even subject to FCC jurisdiction much less that of individual states.” O’Rielly railed against what he sees as a “progressive agenda” to “vanquish capitalism and economic liberty.” He compared the FCC to ALEC, a conservative group that progressive groups criticized for allegedly writing bills on behalf of big firms: “Like ALEC, the new commission is facing its share of unwarranted and inappropriate criticism.” In revisiting net neutrality with an NPRM to be considered at the commissioners' May 18 meeting, the FCC aims to return to “its previous approach to broadband that enabled staggering innovation, creativity, competition, disruption and consumer benefit,” the commissioner said. The 2015 net neutrality rules weren’t necessary, he said. “All of the propaganda in the world cannot paper over the fact that these new burdens were not in response to actual marketplace events but hypothetical concerns dreamt up by radical activists.” O’Rielly cheered ALEC’s opposition to municipal broadband. “It would be easy, as some have done, to blindly support any means necessary to get more and faster broadband to people they represent,” he said. He said he’s “very aware that many homes in America do not have acceptable broadband today” -- that’s why he wants to modernize USF: “This, I believe is a defensible program and one that we seek to inject with as many market driven aspects as possible, including operating reverse auctions to minimize and narrow the amount of subsidy provided.”
FARMINGTON, Pa. --Prospects for major infrastructure legislation are iffy at best, an FCBA conference heard Friday. Brookings Institution fellow Blair Levin said he's "highly skeptical" an infrastructure bill will be enacted, estimating the chance at about 10 percent. "I think there will be some type of plan. I think broadband will be in the plan," said Wiley Rein attorney Anna Gomez, but she questioned whether there would be funding.
Chairman Ajit Pai said the FCC has been more productive in his tenure than under recent past permanent chairmen, with 49 items adopted in his first 100 days, compared with 34 under Julius Genachowski and 25 under Tom Wheeler during the same time period. Pai's comments were in a talk Friday at the American Enterprise Institute in which he largely recapped agency actions since he took over and described how they fit into closing the digital divide, modernizing rules, promoting innovation, consumer and public safety protection, and operational improvement. Text of the prepared remarks, which we heard live, was posted by the FCC along with a fact sheet.
Universal Service Administrative Co. CEO Chris Henderson resigned this week, said a news release Thursday from USAC, which administers FCC USF telecom subsidy programs. Henderson, who had been CEO since September 2014, "led the company through a period of tremendous growth and change focused on enhancing program integrity and improving the stakeholder experience, as part of fulfilling the FCC’s universal service mission," the release said. The board named Vickie Robinson, vice president-general counsel, acting CEO until a permanent replacement can be found. No reason was given for Henderson's departure. FCC Chairman Ajit Pai, who had often questioned USAC oversight when he was a commissioner, recently blasted USAC management of the E-rate school and library discount program, and asked Henderson to devise a plan to address "serious flaws" by May 18 (see 1704190026). Pai didn't comment Thursday. Commissioner Mike O'Rielly, federal chairman of the federal-state joint board on universal service, said Henderson's departure gave USAC a chance "to clean up its act." O'Rielly issued a statement saying: "USAC as it has been managed is not sufficiently accountable to the Commission, and is not meeting the needs of universal service stakeholders or the public, who pay fees to support USAC’s operations. Absent significant and timely improvements, I believe that all options should be on the table, including putting USAC’s functions out for contract, as the Commission has done in other circumstances.”
State regulators voiced concern about a projected spike in the USF contribution factor, saying they look forward to developing recommendations for changes as part of a federal-state joint board that's chaired by FCC Commissioner Mike O'Rielly. Industry consultant Billy Jack Gregg said this week the contribution factor could jump in Q3 from 17.4 percent to 19.6 percent or more of carriers' U.S. interstate and international (long-distance) telecom end-user revenue (see 1705030049).
The Arizona Corporation Commission applauded a state budget agreement that includes $3 million for broadband expansion to rural schools. The legislature and Gov. Doug Ducey (R) agreed to the plan; debate and votes are planned for Thursday, the ACC said in a Wednesday news release. The agreement follows the commission's adoption of an $8 million state broadband fund for rural schools (see 1703140055). The $8 million in state USF funding plus the budget’s $3 million makes the state eligible for federal matches of more than $100 million for broadband through federal E-rate Category One, the commission said. “The commitment of funds in the Legislature’s budget and in the AUSF creates a huge win for our state and our students,” said Chairman Tom Forese. Commissioner Andy Tobin said the broadband investment will bring greater “parity between our urban and rural areas.”
The USF contribution factor could spike in Q3 from 17.4 percent to 19.6 percent or more of carriers' U.S. interstate and international (long-distance) telecom end-user revenue, said industry consultant Billy Jack Gregg in his quarterly email update. He cited Universal Service Administrative Co. projections of increased USF demand, particularly for E-rate school and library discounts, as the driver, and said the contribution (or assessment) factor could go even higher if projected industry revenue declines, as it has been trending. A 19.6 percent factor would be "the highest assessment factor ever." The previous high was 18.2 percent in Q1 of 2016, he said Wednesday. Some reacted to us with concern.
Big telecom companies opposed proposals to expand Missouri USF support to broadband-only and high-cost voice services. In comments Monday in docket TW-2017-0078, Verizon said law prohibits the Public Service Commission from using state USF to support broadband. The statute says it’s only for local voice service, and broadband isn’t a telecom service subject to state jurisdiction, Verizon said. Competition is keeping voice service affordable, it said: “There is no justification for imposing higher MoUSF fees on Missourians in order to create a high cost fund when the competitive market is operating as it should.” CenturyLink, Level 3 and the Missouri Cable Telecommunications Association separately opposed both proposals in other comments. AT&T opposed high-cost voice support, commenting that “technology has evolved past the point where supporting traditional voice service makes sense.” The carrier didn’t oppose a state broadband fund, but suggested conditions: “To the extent Missouri seeks to make state-based USF support similarly available for broadband service, the state USF statutory scheme will likely need to be amended to provide the Commission with necessary jurisdiction, recognizing that the FCC has reiterated that broadband internet access is an interstate service.” Participation in the state program should be voluntary and the fund shouldn’t duplicate existing broadband networks or federal support from the FCC Connect America Fund, AT&T said. FairPoint and a group of small Missouri phone companies supported the broadband fund and high-cost voice support. "The FCC has required ETCs [eligible telecom carriers] receiving [federal USF] high-cost support to spend even more money on their networks, while at the same time, the FCC is providing less financial support through FUSF and ICC [intercarrier compensation] to accomplish that mandate,” the small telcos commented: That “created a real need for states like Missouri to consider establishing their own high-cost funds to assist ETCs in continuing to provide state-of-the-art telecommunications services, including Broadband, in rural areas where the cost of doing so is significantly higher than more populous, urban areas.” Most commenters disagreed or didn’t comment on eliminating the state USF, but AT&T said it wouldn’t be opposed if that’s what the PSC wants.
TDS Metrocom and XO Communications asked the FCC to reverse a staff order denying requests to review Universal Service Administrative Co. audit findings on USF contributions, though the staff remanded some issues to USAC (see 1703310042). The companies said the Wireline Bureau erred in determining whether mixed-use private line revenue should be considered "interstate" (and assessed for USF contributions) under a "ten percent rule" that assigns private line revenue as intrastate if 10 percent or less of a line's total traffic is interstate. TDS, which combined with US Link, one of the original parties, said the order made errors. "It applies the ten percent rule in violation of Commission precedent; it is based on mistakes in fact that presume all intrastate private lines are mixed use and connected to the Internet; and it violates the Administrative Procedures Act [sic] by substituting new law for old -- applying the ten percent separations rule to CLECs and adopting a new burden of proof and production -- without notice and comment," said the company's application for review posted Tuesday in docket 96-45. TDS said the FCC should reverse the order, apply it only prospectively or give the company a waiver on a 2010 audit. In its application seeking reversal, XO made similar arguments: "The Bureau misinterpreted the Commission’s orders involving the jurisdictional classification of private line revenues and, like USAC, essentially requires [XO] to prove that a circuit is not interstate. Commission history and the purpose of the Ten Percent Rule, however, demonstrate that so-called 'mixed use' private line services are to be treated as intrastate communications if, as in the case of [XO], the circuits are physically intrastate and are configured by the provider as closed networks and there is no affirmative evidence that any of the traffic is interstate."