Some Balk on State USF Broadband Proposals

The PRC proposed defining broadband as having at least 4 Mbps download and 1 Mbps upload speeds in unserved and underserved areas. Currently, the USF rules define broadband at dial-up levels -- 56 kbps or more. Under the proposed rule in docket 16-00225, an area is unserved if 90 percent of households lack access to fixed or mobile broadband with 4/1 Mbps speeds, and an underserved area is one in which 50 percent or more lack access. The current rule says an area is unserved if no households can get 56K wireline service, and an underserved area is where a wireline provider offers at least 56K but less than 4/1 Mbps broadband. To support the broadband program, the PRC proposed increasing the USF surcharge 1 percentage point.

“Staff is not recommending the Commission adopt a broadband program in the next iteration of the NMRUSF rule,” they said. “There is no need to adopt definitions for areas unserved or underserved by broadband.” The program's broadband portion is under appeal by CTIA and under review by the New Mexico Supreme Court, they said. “The Commission needs to implement a working rule that sustainably funds the NMRUSF,” the staff said. “If the Commission wishes to pursue elements of the rule which it believes may subject it to a reasonable risk of appeal to the Supreme Court, then Staff recommends the Commission work to codify those ideas in statute.”

Staffers cautioned in general against bold changes. "Staff is cognizant of the Commission’s concerns regarding the appeal of prior NMRUSF rules,” the bureau said. “Staff is concerned also, and suggests that the Commission, in weighing proposals from the parties in this case, be aware of the potential for appeal for each proposal, and when in doubt err on the side of caution and adopt rule provisions which will insulate it from the risk of appeal thereby putting the veracity of the rule in doubt.”

Establishing a broadband fund “is unlawful, arbitrary, and capricious,” CTIA commented. Doing so would exceed the commission’s authority, and there’s no record evidence supporting a broadband fund, CTIA said. The PRC should focus instead on fund accountability, it said. Comcast agreed the PRC lacks authority to add broadband. CenturyLink supported the broadband program, suggesting only a few tweaks to the language setting up the program.

The specter of lawsuit was raised in other recent state USF proceedings. The Nebraska Public Service Commission is considering revamping state USF contribution methodology, but CTIA warned of a possible suit if the state proceeds before the FCC overhauls federal USF contribution (see 1608040032). AT&T is litigating with the Kansas Corporation Commission on similar grounds. The Utah Public Service Commission, which is considering contribution reform amid projections its fund could run out early next year, tentatively decided in July to increase its revenue-based surcharge as an interim step while the state legislature considers broader changes (see 1607150017).

Oregon

Last week, cable and phone companies slammed a petition by the Oregon Telecommunications Association (OTA) to amend the definition of basic phone service to include access to broadband (docket AR 604). The definition determines which services receive state USF distributions. In opposition comments Friday, AT&T said the proposed change “may have far ranging impacts,” but OTA hasn’t said why it wants the change or what it means by access to broadband. The FCC pre-empts including broadband internet access service, an interstate service, in the definition of basic phone service at the state level, it said. AT&T said the state commission should instead do a comprehensive review of state USF starting in 2019. The state legislature is the body that should determine ways to promote broadband in Oregon, it said.

“While the Legislature has delegated authority to the Commission to define the term ‘basic telephone service,’ it has not authorized the Commission to expand the scope of that definition to include "access to broadband,” the Oregon Cable Telecommunications Association commented. Broadband internet access service is an interstate service regulated by the FCC, it added. State USF funds may be used for broadband mapping, but not broadband itself, it said.

What OTA means by “access to broadband service” isn’t “broadband service,” OTA said in its Sept. 9 petition. “It is not the broadband service provided by Internet Service Providers (ISPs) that is part of basic telephone service. Instead, it is the ability to access the providers of broadband service that would be part of the definition of basic telephone service just as the current definition requests access to long distance service providers to be offered.”

In other state USF developments, the D.C. PSC is considering changes to its fund in light of the FCC recent Lifeline order. Sept. 2, the PSCDC issued a notice of inquiry seeking comments on changes to administration of the Universal Service Trust Fund. The FCC order “may require major changes to the rules and administration” of the D.C. USTF, it said. The comments are currently due Saturday, but the Office of the People’s Counsel filed a motion earlier this month to extend the deadline to Nov. 7 because OPC needs to procure outside subject-matter experts. The California Public Utilities Commission also has sought comment on changes to its own fund as a result of the FCC Lifeline order (see 1609230029), and state implementation issues were a major subject of the July NARUC meeting (see 1607270020).

The PSCDC Friday proposed a state USF rate of 0.07 percent for 2017, down from 0.095 percent in 2016. The rate reflects a budget for the D.C. USTF of $529,375, down from $591,875 in 2016, the PSC said in a public notice Friday in case No. FC988. The proposed budget includes a $400,000 reduction in the fund balance to offset the 2017 budgetary expenses, the PSC said. The proposal included $100,000 for Lifeline reimbursement, down $40,000 from 2016. Comments are due Oct. 3, replies Oct. 13.