The Universal Service Administrative Co. scored some "quick wins" last year on its efforts to address "priority" initiatives to improve its oversight of the FCC's USF programs, USAC CEO Chris Henderson said in the group's 2015 Annual Report posted Thursday in FCC docket 96-45. "We’ve simplified audit reports to help those receiving them better understand our goals and we’ve built a new approach to managing audits going into 2016," Henderson said in a letter included in the report. "We’ve used direct stakeholder feedback to shape and inform the development of applicant tools and forms. We revamped our approach to Lifeline Program recertification, making the process more consumer-friendly. As a result, our recertification percentage was almost double what it was last year. We’ve also built the foundation of a data capability that will change the way we operate and inform critical stakeholders, such as the FCC, program participants, and the American public." He said USAC is looking to help the FCC in its efforts to connect 34 million people who don't yet have high-speed broadband access.
Commissioner Mignon Clyburn called FCC rate-of-return USF changes a "win-win" for rural consumers wanting broadband and phone consumers paying into the USF. Clyburn said she was proud the FCC went beyond fixing a stand-alone broadband problem that prevented rural telcos from receiving USF support when customers with high-speed Internet access dropped traditional phone service. "We are also establishing a blueprint to connect unserved households and modernize the Connect America Fund to ensure that rate-of-return carriers use finite resources as efficiently as possible," she said in a statement that accompanied the 249-page Order and Further NPRM released Wednesday (see 1603300065).
The FCC voted 3-2 to approve a Lifeline modernization order that extends USF low-income subsidies to broadband service and streamlines the program's administration. But the agency didn't act until after its Thursday meeting was delayed three times, an attempted -- or apparent -- budget compromise collapsed, and Republicans dissented and cried foul. Commissioner Mike O'Rielly suggested personal relations had been "irreparably" harmed because the Democrats "will misrepresent, cut corners and welch on deals." Asked about certain Republican charges, Chairman Tom Wheeler said, "Balderdash."
The FCC rejected a TracFone counsel's appeal to view Lifeline enforcement records under the Freedom of Information Act (FOIA). The agency denied an application for review filed by Mitchell Brecher of Greenberg Traurig seeking to reverse a 2014 Wireline Bureau decision. The bureau had denied his FOIA request that sought information relating to FCC notices of apparent liability (NALs) against his firm's client TracFone and 11 other companies for apparently violating Lifeline USF rules by obtaining subsidy support for more than one subscriber from the same household. Brecher narrowed and clarified his request to three categories of records, but the bureau said the documents were exempt from FOIA disclosure. The full commission agreed in an order Tuesday, with Commissioner Mike O'Rielly partially dissenting. He said he agreed the records were exempt from FOIA release but dissented from the application of Exemption 5 to communications between the FCC and the Universal Service Administrative Co. He said USAC was neither part of the FCC nor a separate federal agency, but an independent, private nonprofit corporation. "FCC-USAC communications are clearly neither intra-agency nor inter-agency communications protected by the deliberative process privilege, and should not be treated as such," he said in a statement attached to the order. Brecher didn't comment.
FCC Chairman Tom Wheeler offered a bevy of defenses and explanations to Capitol Hill on his Lifeline program overhaul and broadband privacy regulation NPRM, both set for votes Thursday at the FCC’s meeting. The agency released Wheeler’s responses to multiple lawmakers Wednesday on the items, as governors slammed the Lifeline overhaul plan and Charter Communications defended it.
The FCC revamped rate-of-return USF support mechanisms for the broadband era, in a 249-page order and Further NPRM released late Wednesday, with Commissioner Ajit Pai partially dissenting and partially concurring. The order gives rate-of-return telcos the option of receiving rural high-cost USF subsidies based on a broadband cost model over 10 years, which will be supplemented by $150 million in additional annual funding from existing USF reserves. For carriers not opting in to the model-based approach, the order updates a legacy mechanism -- renamed Connect America Fund Broadband Loop Support (CAF-BLS) -- to fund stand-alone broadband service to customers, which was a major driver of the reform effort. The changes include measures and incentives to spark greater broadband deployment, the order said.
FCC Commissioner Ajit Pai proposed a $1.75 billion Lifeline annual subsidy cap as the commission heads toward a scheduled vote Thursday on extending the USF low-income support program to broadband service and streamlining administration. He also proposed Tuesday to reduce payments to Lifeline providers if program support exceeds the budget, eliminate "enhanced" Lifeline tribal subsidies in more densely populated areas, and strengthen Lifeline minimum broadband service standards. A draft order would set a budget of $2.25 billion, indexed for inflation, that could be adjusted if spending reaches 90 percent of that amount (see 1603080024).
The FCC appears likely to modify Lifeline mobile voice proposals that have raised concerns, but the specifics remain unclear, some public interest and industry officials told us Monday. Cheryl Leanza, United Church of Christ policy adviser, said she believes there will be some "moderating" changes. "I would be surprised if they didn't alter the proposal in some way. It's hard to say exactly how," she said, but "I wouldn't say it's going to change radically." Public Knowledge counsel Phillip Berenbroick said he "wouldn't be shocked" to see the FCC show some flexibility on proposed minimum service standards and their implementation timeline.
The FCC should carve out Alaskan wireless carriers from a proposed 3G minimum broadband standard for mobile services in the upcoming Lifeline order (see 1603240052), Alaskan carrier General Communication Inc. said in an ex parte filing posted Friday in docket 10-90. GCI met Tuesday with Stephanie Weiner, aide to FCC Chairman Tom Wheeler. “By our best estimate, Remote Alaska contains at least 100 communities with a combined population of more than 40,000 that have access only to a 2G network,” GCI said. “A few years ago, many of those consumers had no wireless service at all. As Alaska wireless providers continue to build out and upgrade service in rural Alaska, the Commission should not make it more difficult for such communities to afford the best service available.” GCI said the simplest option is to exclude all facilities-based Alaska wireless carriers from the 3G minimum requirement. Or, it could apply the minimum standard only where commercial 3G service is offered, it said. “As a last resort,” the FCC could request waivers from carriers that offer 2G service in certain areas, said the cable and telecom provider. “That solution, however, would create uncertainty, cause delay, and unnecessarily tie up Commission and carrier resources.” GCI, a backer of the so-called Alaska Plan for a looming FCC rate-of-return USF overhaul (see 1602250025), also lobbied on that broadband deployment proposal.
Enacting the Rural Health Care Connectivity Act (S-1916) “would increase direct spending and revenues by $197 million and $215 million, respectively, resulting in a net reduction in the deficit of $18 million over that period" of 2017-2026, the Congressional Budget Office estimated in a report released Friday. The Senate Commerce Committee approved the bill in November. The legislation would enable some skilled nursing facilities (SNF) to attain eligibility for USF Rural Health Care (RHC) program grants. “CBO estimates that an average of 1,650 public and nonprofit SNFs in rural areas would be eligible for grants during that period and that participation rates and grant awards would be similar to those for existing RHC programs,” the report said. “Based on information from the FCC, CBO estimates that participation rates would reach 75 percent over a period of several years and that certain non-rural entities affiliated with those participants also would receive funding. Grant awards would vary in size depending on the recipient’s location and choice of benefits.” CBO said the bill would up the cost of an existing mandate for telecom companies. “CBO expects that telecommunications companies would generally pass most of the cost of the fee increase on to consumers,” it said.