Universal Service Administrative Co. in 2016 focused on protecting USF integrity, streamlining and optimizing program operations, supporting stakeholders "through better online tools," and employing data "to improve operational effectiveness," said CEO Chris Henderson in USAC's annual report posted Thursday in FCC docket 96-45. "These initiatives became all the more important with the FCC’s new and ongoing modernization orders for Lifeline, High Cost, and Schools and Libraries. While Rural Health Care didn’t have a formal modernization order from the FCC, 2016 was a transformative year as we implemented changes to accommodate a growth in demand for funds. The ground work we laid to prepare for these program shifts was a stabilizing force in a year of enormous change, and has helped us execute a volume of work unparalleled at USAC."
FCC staff denied requests for review of Universal Service Administrative Co. audit findings of USF contribution filings but remanded the cases to USAC for further consideration of some issues. The findings involve "whether certain revenues associated with specific mixed-use special access lines (also referred to as private lines) should be considered interstate" in assessing USF contributions, said a Wireline Bureau order in docket 96-45 in Friday's Daily Digest. Carrier USF contributions are based on their interstate and international telecom end-user revenue. The review requests were filed by DeltaCom, McLeod USA Telecommunications Services, PacTec Communications, Puerto Rico Telephone, US Link and XO Communications. The facts varied, but each party said USAC misapplied a "ten percent rule" in the audits of their USF contribution filings, the order said. The rule assigns "mixed-use private or WATS" line costs as intrastate if 10 percent or less of a line's total traffic is interstate. "USAC appropriately relied on the ten percent rule to determine the jurisdictional nature of the revenues," the bureau wrote. "USAC may have failed to consider other relevant evidence that particular private lines were properly classified as intrastate. We therefore remand the requests for review to USAC for further consideration consistent with this Order."
Commissioner Mignon Clyburn lauded an FCC broadband health mapping platform as "a monumental step" that's building knowledge and awareness about the importance of advanced health services. Calling it "simply unacceptable" that 34 million Americans lack access to 25 Mbps connectivity and others can't afford it, she said the initiative is helping identify areas with "critical need" for broadband health solutions. "It is designed to assist those committed to closing infrastructure gaps, to ensure that everyone has access to the technology necessary, and enable quick and top-rated health care assistance," she said, according to prepared remarks Thursday at a state telehealth summit in Columbia, South Carolina: The interactive tool "will enable those in both the public and private sectors to access and analyze statistics about broadband connectivity, as well as health and other indexes on a national, state, and county level." Clyburn said the tool overlays broadband data with key health information down to the county level. "Using this data, the FCC also has been able to identify, what we call the 100 'critical need' counties, meaning those communities with limited broadband access and very high health needs," she said, noting the initiative was launched by a Connect2Health task force in August (see 1608020017). She said requests for the USF Healthcare Connect Fund, which has an annual budget of $400 million, "reached a historic high of nearly $378 million" in funding year 2015, the most recent available.
FCC Chairman Ajit Pai is dubbing April “infrastructure month” and two infrastructure items top a busy tentative agenda for the April 20 commissioners’ meeting. Separate NPRMs are to examine how the FCC can further expedite the deployment of both wireless and wireline infrastructure, as expected (see 1703290049). The April agenda focuses on Pai’s “digital empowerment agenda,” his biggest theme so far (see 1701230058). States meanwhile are working on wireless siting issues (see 1703300054).
Lifeline advocates knocked FCC Chairman Ajit Pai's plans to roll back the agency's process for designating Lifeline broadband providers (LBPs), which he said usurped state authority. Senior House Democrats blasted the decision and Commissioner Mignon Clyburn voiced disappointment. Some said Pai wasn't living up to his rhetoric to close the "digital divide," but others praised him, including a key Republican senator. Although Commissioner Mike O'Rielly didn't comment, he previously said he didn't believe the FCC could bypass state authority to designate USF-eligible telecom carriers (ETCs) for Lifeline. Pai announced he would begin a proceeding to scrap the LBP process and said he didn't believe staff in the meantime should approve pending LBP applications (see 1703290025).
Telecom providers criticized a Nebraska proposal to change the state USF contribution formula from one based on revenue to a connections-based mechanism using phone numbers. In February, the Public Service Commission proposed a $1.29 surcharge for mobile voice, $1.24 for residential fixed voice and a five-tiered scheme for assessing charges to business lines. The current revenue-based contribution factor is 6.95 percent. But in testimony Friday released this week in docket NUSF-100, business line providers including Cox, Frontier and Windstream said the scheme for business lines isn't clear and may be tough to manage. For business lines, it’s not clear what revenue is to be considered in determining the surcharge -- only the business tariff rate or also extended-area-service fees and long-distance charges, Windstream said. Long-distance charges can fluctuate widely month to month, and business bundles could further complicate assessment, it said. Frontier said its billing system can't segregate or sort business customers into the five proposed tiers. Level 3 said assessing based on the number of phone numbers could hurt enterprise and government customers that have many phone numbers. CenturyLink said the business tiers are hazy and distinguishing between mobile and fixed lines for USF fees isn't equitable. CTIA said assessing different fees to mobile and fixed lines is “unreasonably discriminatory.” In other testimony, Communications Director Cullen Robbins proposed three alternative plans for contribution fees: (1) set mobile and residential voice surcharges equal at $1.29 and use two categories for businesses, single-line and multiline; (2) charge mobile and fixed the same fee and have one charge for business lines; and (3) use two categories for business -- single line and multitiered -- and treat residential fixed voice as a single-line business. "Continued declines in Nebraska Universal Service Fund (NUSF) remittances as a result of the erosion of the assessable base has led to a need to revise the contribution mechanism for the NUSF," Robbins said. A connections-based system is "more stable and predictable than the current mechanism,” he said. Some wireline companies supported the principle of assessing USF fees by connection as bringing more stability to USF. "A connection-based mechanism should be less volatile than a revenue-based mechanism, and … it should be less vulnerable to erosion of the contribution base," Windstream said. But Charter said it would be better to keep the status quo. "Moving away from this system will be complex, costly, confusing, and will likely need to be duplicated if the FCC ultimately changes the federal system,” it said. "Continuing with a revenue-based system is the most efficient, the most trusted, the most enforced and most enforceable, system yet devised. As [Winston] Churchill said: 'Democracy is the worst form of government, except for all the others.' The same can be said for revenue-based contribution systems -- at least at this time.”
Rep. Bill Johnson, R-Ohio, will be the “go-to guy” leading broadband infrastructure efforts for the House Commerce Committee and “therefore, for the Republican conference,” House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., said Tuesday before a gathering of NTCA members. “This is a guy you’re going to see a lot as we focus on broadband expansion.”
FCC Chairman Ajit Pai voiced sympathy for blocking a rural phone "rate floor" increase scheduled for July, and is committed to taking broader action to benefit rural consumers. Speaking at an NTCA legislative conference Monday, Pai said he hopes the commission can issue a fall public notice on further details of a planned Connect America Fund subsidy auction for fixed broadband services. Questioned by NTCA CEO Shirley Bloomfield, he was noncommittal about providing more FCC funding for rural telco USF mechanisms, but repeated his support for Congress including broadband through USF in any infrastructure bill.
Consumer advocates and individuals urged the FCC to undo revocation of nine Lifeline broadband provider (LBP) designations and to move forward with other actions to help low-income consumers get access to high-speed services under the USF subsidy program. Free Press received more than 13,000 comments from people protesting FCC Chairman Ajit Pai's "attacks on Lifeline and supporting the expansion of the program to broadband," it said in a release. Pai has defended the Wireline Bureau's February LBP revocation decision (see 1702070062). Free Press joined reply comments of Voices for Internet Freedom members at the commission in docket 11-42, which were due Thursday. "Another 18,000 public comments were filed by Demand Progress, a digital rights group urging the FCC to support Lifeline and close the digital divide for those who need access most," Free Press said. Most initial comments contained similar pleas, but industry representatives didn't expect the FCC to reverse the bureau decision (see 1703170035).
NTCA made its case to key FCC officials for addressing rural telco subsidy concerns. "Key universal service priorities for early 2017" include "the negative impacts of continuing" USF "budget shortfalls on the availability and affordability of broadband for consumers and businesses in rural America, the chilling impact on broadband investment of uncertainty arising out of the new capital investment allowance, and the adverse implications for rural consumers associated with escalating local voice rates pursuant to the rate floor policy," said a filing in docket 10-90 Wednesday on meetings with aides to Chairman Ajit Pai and with Commissioner Mike O'Rielly and an aide.