Providers Battle Over FCC Allocation of USF Support for Puerto Rico, US Virgin Islands
Incumbents and competitors in Puerto Rico and the U.S. Virgin Islands disagreed over how the FCC should divvy up USF support for the islands' hurricane-hit telecom networks. Puerto Rico Telephone Co. (PRTC or Claro) and Virgin Islands Telephone (Viya) urged targeting funding to their networks, but their rivals backed a competitive process to spread fund around. Reply comments were due Wednesday in docket 18-143, responding to initial comments on an NPRM proposing $889 million in "Stage 2" subsidies for fixed services (over 10 years) and mobile services (over three years): $698 million for Puerto Rico ($444.5 million fixed, $254 million mobile) and $191 million for the Virgin Islands ($186.5 million fixed, $4.4 million mobile). The notice was attached to an order (see 1805290028) that allocated $64 million in "Stage 1" for near-term network restoration (see 1808080011).
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PRTC said there's much agreement the Puerto Rico fund "is insufficient" to meet FCC goals. It sought an additional $620 million for fixed providers, above existing legacy frozen support, to further restore and harden networks, and expand broadband. The telco said giving it a "right of first refusal" would speed efforts to rebuild and extend service to the most locations economically. If not, commenters agree on using "a competitive request proposal process rather than an auction" that would "introduce inefficiencies and delays," PRTC said. The telco also urged continuing its $36 million in annual frozen support, extending funding to underserved areas not just unserved areas, and restricting eligibility for fixed funding to companies that had networks and provided broadband service to residential customers before the hurricanes.
Liberty Cablevision of Puerto Rico agreed funding should be hiked and target existing networks but opposed giving PRTC a right of first refusal. Funding should be disbursed through competitive bidding, favoring proposals offering higher speeds and quality, "regardless of technology, while expanding service to the maximum number of people," particularly in "locations most in need," it said.
WorldNet Telecommunications criticized proposals to "effectively restrict" funding "to, in the extreme, the ILEC alone and, in any event, to just a handful of select large service providers." The "proposals include a right-of-first refusal ... for the ILEC, restricting funding eligibility to residential service providers, and restricting funding opportunities to large geographic areas -- all proposals that would extremely limit and/or preclude a number of existing" providers, it said.
VPNet opposed PRTC's bid to retain its frozen support, urging reallocating the funding competitively. It also opposed AT&T's proposal in initial comments to focus Stage 2 funding on restoration and hardening efforts, and create a Stage 3 more focused on broadband expansion and unserved areas. "Segregating the objectives will not necessarily result in more efficient restoration, improvement and expansion of broadband service," VPNet said. It could lead some providers "to skip Stage 2 or propose smaller geographic areas that are more likely to be built in three years, resulting in fewer areas where service can be quickly restored or provided."
The effort "must go beyond restoring legacy systems" and "make critical investments" in new telecom infrastructure in both Puerto Rico and the Virgin Islands, said a coalition of groups. "These investments would be short lived unless we also create redundancies and backup systems to make our infrastructure more resilient." It said satellite technology can provide "the most cost effective and deployable stop-gap solution ... when the conventional infrastructure is compromised." Hughes Network Systems also urged satellite funding (see 1808080011).
Fixed support to Viya as the Virgin Islands' "sole carrier of last resort will best serve" FCC goals, the incumbent provider and wireless affiliates said. "No other provider is positioned to offer high-quality fixed voice and broadband service throughout the USVI as quickly or as effectively." Competitive funding could violate the FCC principle against using USF support to deploy "duplicative networks," Viya said. "[A]ny attempt to carve up support between multiple entities through a competitive allocation process is likely to leave the most rural parts of the USVI unserved." Viya also renewed calls, including by AT&T, for reallocating mobile funding between the Virgin Islands and Puerto Rico, based on their populations.
The FCC should reject Viya's proposal to "maintain and increase support only to Viya," Broadband VI said. "Given that Viya has restored subsidized and insured service to only about 60 percent of its customers while Broadband VI has restored and expanded its unsubsidized service, it would be extremely unwise for the Commission" to ignore "the benefits of a competitive process." It also opposed "novel eligibility obstacles" while agreeing with AT&T's proposal for a Stage 3. Momentum Telecom opposed Viya's proposals "to further cement its monopoly control" and said the incumbent had refused to interconnect with it.
It's Virgin Islands policy to require utilities to locate their new systems underground to harden them, said Gov. Kenneth Mapp (I). He said access to underground ducts and conduits built with FCC support could be made available to other utilities for last-mile infrastructure on reasonable terms, as done for pole attachments.