Alaska Communications knocked an Alaska Telephone Association wireless USF proposal to the FCC, saying it provides a windfall for competitors -- and General Communications (GCI) in particular -- without clearly addressing middle-mile connectivity needs in rural Alaska. ATA's proposal for keeping annual USF support for rate-of-return wireline telcos in the state at $55 million for 10 years, subject to reasonable broadband deployment expectations, was appropriate, said an Alaska Communications (ACS) filing in docket 10-90. The price-cap telco said the rate-of-return plan is consistent with its own Connect America Fund Phase II proposal for the state's price-cap areas. But ACS objected to ATA's "extraordinary" proposal to expand annual USF support for wireless competitive eligible telecommunications carriers in the state to $100 million for 10 years. The telco called the billion-dollar proposal a "CETC enrichment plan" that would not ensure connectivity to remote areas, including 188 Alaskan Bush communities. "ATA does not endorse a specific proposal for closing Alaska’s middle mile gap, with defined deployment milestones and enforceable performance standards for capacity, speed, latency, and -- most important of all -- service affordability (as the Commission adopted for the rest of the nation)," ACS said. It said much of the $1 billion would "underwrite GCI's unregulated middle-mile monopoly," thus harming competition. The telco said the FCC should address ATA's proposals for wireless and rate-of-return carriers separately. If the CETC support is increased, ACS said, the FCC should attach safeguards, including "reasonable non-discriminatory access obligations, affiliate transaction rules, and cost-based pricing requirements, to ensure adequate and quality broadband service sufficient to meet current and project demand." GCI Senior Counsel Chris Nierman emailed in response Tuesday: “All of the providers supporting the Alaska Plan have demonstrated its need and benefits to consumers. Alaska’s unique circumstances require an integrated plan to address the challenges for Alaska. Just as the FCC saw fit to provide stability for non-contiguous price cap carriers like ACS, a similar approach is appropriate for Alaska’s other providers.” ATA didn't comment, but its representatives last week discussed its planned "Alaska Infrastructure Fund" with Wireline Bureau officials, said a Monday filing that included detailed proposed revisions to the FCC's recently updated rate-of-return USF rules (see 1603300065).
A Senate Republican appropriator questioned how the FCC handled its recent rate of return USF overhaul and is pressing for inquiries, he told NTCA members Tuesday. Scores of NTCA members flew to Washington this week for a meeting and to lobby congressional offices Tuesday.
FCC Commissioner Ajit Pai asked Universal Service Administrative Co. for help in fighting waste, fraud and abuse in the Lifeline USF support program since wireless resellers started participating heavily in 2009. The commission's investigation of Total Call Mobile "revealed much about the dubious practices of the industry," he said in a Monday letter to USAC CEO Chris Henderson. The FCC recently proposed a $51 million fine against Total Call in a notice of apparent liability (see 1604080032). Pai said the investigation showed, for example, that Total Call's sales agents "repeatedly registered duplicate subscribers to the addresses of local homeless shelters and used fake Social Security numbers to register duplicate subscribers." The FCC learned Total Call "was not alone" in some of the practices, he said. Pai asked USAC to give his office by May 2 certain pieces of information on each of the four Lifeline wireless resellers named by Total Call sales agents, along with USAC actions, among other things.
NTCA officials suggested rural telcos should receive additional high-cost USF support in order to achieve sustainable broadband service and equitable treatment under FCC subsidy programs. Speaking at the group's policy conference Monday, the officials said Lifeline and E-rate USF programs received substantial funding hikes and were indexed for inflation, unlike rate-of-return high-cost USF support, which only has increased a little and isn't indexed. NTCA members -- about 500 of whom were in attendance -- will lobby congressional offices this week on the issue, they said.
ViaSat pressed the FCC to devise "technologically neutral" USF reverse auctions that permit all technologies to compete for broadband subsidies on an equal playing field. ViaSat advocates "a straightforward design for the upcoming Connect America Fund Phase II reverse auctions that would award funds to the bidder that can offer qualifying service with the lowest required subsidy, thereby encouraging broad participation and facilitating efficient outcomes," said a company filing in docket 10-90 Thursday. "ViaSat opposes proposals that would unduly complicate the CAF II reverse auctions by awarding 'points' to certain bidders based on subjective criteria -- particularly as those proposals tend to favor particular technologies over others in heavy-handed fashion." It said the March 14 letter from the Utilities Telecom Council and other rural electric and telco associations responding to a Dec. 29 Hughes Network Systems (HNS) submission underscores the problem of points-based plans. "The Associations and HNS both advocate complex schemes that would create opportunities for gaming the funding process and marginalizing particular technologies -- including, in the case of the Associations’ proposal, marginalizing satellite broadband," ViaSat said. It said the proposals would: (1) delay initial funding selections and spark numerous challenges to them, (2) favor certain technologies over others without regard to quality or cost efficiency, (3) inflate funding requirements, leading to increased contribution burdens for consumers and/or a “funding gap” that leaves many unserved households without broadband access, and (4) at best, delay the availability of service to those households. ViaSat disputed association arguments that satellite service is incapable of providing high-quality broadband service.
The FCC should address issues that arose during the first phase of the USF mobility fund before launching phase II, the Rural Wireless Association said in a letter to the commission. “There is a continued need to support mobile communications services in rural areas,” RWA said. “Mobile voice and broadband services are critical to public safety communications and economic development, and can help address problems such as the ‘digital divide’ and ‘homework gap’ that are present in rural America. For these reasons, it is critical that the Commission craft and implement a dedicated mobility support mechanism that will provide specific, predictable, and sufficient support to both advance and sustain the availability of mobile services in high-cost areas.” The FCC should start by looking at Mobility Fund Phase I and “carefully consider what did and did not work,” RWA said. The record shows that only $67 million in Mobility Fund Phase I (MFI) funding has been disbursed, and more than $70 million was returned to the FCC, the group said. “RWA recommends that the Commission staff solicit feedback on MFI before diving headfirst into a Phase II mechanism that risks replicating unpredictable processes,” the letter said. RWA also said FCC data on broadband deployment needs to be improved. The group called on the FCC to address problems caused by the incompatibility of CDMA and GSM networks, in the filing posted in docket 10-208.
The FCC made tariff review plans available for ILECs updating interstate access service tariffs. A Wireline Bureau order in Thursday's Daily Digest included a link to the TRPs, which support rate revisions by both price-cap and rate-of-return telcos in their tariffs. "The completion of the TRPs appended to this document will provide the supporting documentation to partially fulfill the requirements established" in various sections of the Commission’s rules, the order said. Rate-of-return telcos on July 1 must adjust their tariffs to reflect an 11 percent authorized rate of return under a six-year phasedown from 11.25 percent to 9.75 percent adopted in the FCC's rural USF overhaul order in March (see 1603300065). Both rate-of-return and price-cap telcos must incorporate other tariff modifications that were detailed in the order.
Rural telcos will have to provide more broadband, often with less federal support, said Fletcher Heald attorney James Troup, who represents RLECs and examined recent FCC actions overhauling high-cost USF subsidies for rate-of-return carriers (see 1603300065 and 1603310039). The commission is "imposing numerous additional obligations upon rate-of-return regulated incumbent local exchange carriers (ILECs), while leaving many rural ILECs with the same or even less compensation to satisfy the significant broadband build-out expenditures mandated by the new regulations," Troup said in a blog post Wednesday. The FCC is phasing down the authorized rate of return from 11.25 percent to 9.75 percent over six years and giving carriers two options: shifting to model-based support or staying with legacy mechanisms, with one revamped as Connect America Fund Broadband Loop Support (CAF BLS) and providing stand-alone broadband support. In both cases, ILECs "will have new broadband construction obligations entailing additional costs," Troup wrote. "The FCC did not allocate additional funds to recover the increase in construction expenditures for those ILECs that elect to receive CAF BLS and high cost loop support. The FCC only provided $150 million more to pay for all the new broadband construction it is mandating for those ILECs that select model-based support. The funds within the current budget will first be distributed to those that elect model-based USF, and what is left within the current budget will be available for those that receive CAF BLS and high cost loop support." Many RLECs will receive less funds under a "regression analysis" that limits operating and corporate expenses, and due to capital budget constraints, he said. The changes create substantial uncertainty for those choosing legacy support, Troup told us Thursday. He said rural telcos will be forced to bear the burden of broadband construction that benefits long-distance providers, wireless carriers and Internet edge players using those networks.
The Competitive Carriers Association remains optimistic that small carriers will be active in the TV incentive auction, President Steve Berry said. Berry predicted the forward auction, in which carriers will bid for licenses, will start in May or June, in comments streamed from the CCA spring conference in Nashville. “A number of policy wins were essential to make this auction actually a reality for smaller carriers and many of our members,” Berry said. The smaller license sizes, spectrum reserve and mandated interoperability in the FCC’s rules were CCA priorities, he said. “CCA members are a critical part of the mobile infrastructure system.”
Frontier Communications gained access to $48.6 million in Connect America Fund subsidies for serving 114,610 locations in areas of two states covered by wireline systems it recently acquired from Verizon (see 1604010036), said an FCC Wireline Bureau order in Tuesday's Daily Digest. Frontier was authorized to receive $32 million for California and $16.6 million for Texas that Verizon had accepted in broadband-oriented CAF Phase II support. The bureau directed Universal Service Administrative Co. to disburse to Frontier the USF subsidy amounts, which included some deferred amounts and other adjustments not previously disbursed to Verizon.