FCC OK's Alaska USF Plan for Rural Telcos, Mobile Carriers; Clyburn, Pai Dissent

The Alaska carriers will have the option of receiving fixed amounts of support over 10 years to deploy and maintain their fixed and mobile networks, "given the unique climate and geographic conditions of Alaska," the FCC said. "We will provide a one-time opportunity for Alaskan rate-of-return carriers to elect to receive support frozen at adjusted 2011 levels for a 10-year term in exchange for meeting individualized performance obligations to offer voice and broadband services meeting the service obligations we adopt in this Order at specified minimum speeds by five-year and 10-year service milestones to a specified number of locations." Carriers not opting into the plan will have the option of receiving support based on an alternative broadband cost model or legacy rate-of-return support mechanisms revised in March, the agency said.

If all carriers elect the new option, "we expect this plan to bring broadband to as many as 111,302 fixed locations and 133,788 mobile consumers" within 10 years, the FCC said. "ATA represents that collectively, as of year-end 2015, the Alaska rate-of-return carriers served 124,166 remote locations, with 49,062 of those locations lacking broadband at speeds of 10/1 Mbps or above. If all Alaska rate-of-return carriers that have submitted proposed performance plans participate in the Alaska Plan, and those performance plans are approved as submitted, over 36,000 locations will become newly served with broadband at speeds of 10/1 Mbps or above, and the number of locations with 25/3 Mbps service will increase from 8,823 to 77,516 locations. Moreover, under ATA’s proposed plan, the 24,138 locations that were unserved by any benchmark at the end of 2015 would be reduced from 24,138 locations to only 758 locations over the term."

Clyburn said she dissented because of "serious deficiencies" in the plan, including continued support of overlapping mobile providers, which she said in a statement defied a key FCC principle: "We do not subsidize competition. We do not provide duplicative high-cost support to carriers in the same area and we do not subsidize carriers where other unsubsidized carriers are providing service." She said the plan did little to address "the very real middle-mile problem in Alaska."

Pai said the FCC missed a chance to fix Alaska's connection issues, dedicating no funding to solve the middle-mile problem. "The problem isn’t a lack of money; it’s the waste of taxpayer dollars," he said, citing $365 million in waste. "The Order violates basic tenets of universal service reform." The order "condones" duplicative buildout, "rewards" wireless carriers for serving remote areas already served by rivals, and "carves out a special funding stream for one carrier with no discernible public policy purpose," he said. "The Alaska Plan proposed that Alaskan wireless carriers not participating in the plan face a three-year phase down of support. The Order adopts that plan for most carriers but delays that phase down for a '12 month period from the release data of the Report and Order' for AT&T and only for AT&T."

Commissioner Mike O'Rielly voted to approve the order after working out a compromise on the competitive overlap issue that he called "tough but fair." He said there's no 4G LTE overlap in Alaska by eligible carriers, but he recognized "overlaps could develop." The order "resolves the issue by deciding that, in five years, the Commission will take another look at where the funding is being used," O'Rielly said in a statement. "If overlaps were to develop, duplicative funding in such areas will be eliminated."