FCC Commissioner Mignon Clyburn said she opposed any amendments to the Senate’s budget resolution (S.Con. Res. 8) aimed at limiting USF funding for mobile services. Her comments came in a news release Friday. The amendments, which had not been voted on at our deadline, “fail to take into account how vital a program Lifeline is for low income families to stay connected, help secure and maintain jobs, and reach law enforcement in case of emergencies,” Clyburn said. She acknowledged that the program lacked proper controls when it was first implemented but “last year we took appropriate and significant steps to correct that,” she said. “The Commission is open to making additional adjustments where necessary, but in no uncertain terms should qualifying low-income consumers who have followed the rules, be refused service.” Competitive Carriers Association President Steve Berry also objected to any proposed amendments which would limit USF funding for mobile services in a separate news release. “This is not the time nor the place for consideration of policies that would fundamentally impact Universal Service Fund programs,” Berry said. “Eliminating USF support does not reduce the Federal Budget; it only harms rural and low income consumers.”
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
The state of Washington may change how it taxes telecom. Legislators introduced House Bill 1971 Feb. 27 and held a House Finance Committee hearing last week. Sponsored by one Democrat and one Republican, the bill would remove some tax exemptions from the law and draw millions of dollars more in taxes, as well as create a five-year state USF. The bill’s central purpose is tax parity, said House Finance Committee Chairman Reuven Carlyle (D), a bill sponsor, at the hearing. The state’s tax policies “are behind the age and the era,” he said. “We're also trying to recognize that issues like bundling ... really call us to try to get a much simpler, more consistent approach to taxation that is a better reflection of what’s happening in the marketplace."
The FCC responded to attacks on several fronts, arguing in four briefs filed with the 10th U.S. Circuit Court of Appeals that it had authority to adopt the reforms in its landmark 2011 USF/intercarrier compensation (ICC) order. The commission defended Monday its new Access Recovery Charge for ILECs to recoup lost access fees, a rule governing ICC for CLEC-VoIP partnerships and a rule banning call blocking by VoIP providers. The reforms it adopted will let the commission meet its congressionally directed mandate to make broadband service available throughout the U.S., it said.
Georgia legislators’ attempt to restrict municipal broadband failed Thursday night in a 94-70 House vote. But House Bill 282, introduced last month, echoing a failed Georgia bill last year and laws in other states, skyrocketed into a national debate about municipal networks this year before dying on the House floor. Vigorous back and forth occurred among legislators before the evening vote and carried over into stirrings of victory and lamentation Friday.
The landmark order reforming the USF and intercarrier compensation system was a bastion of reasonableness, the FCC argued in the 10th U.S. Circuit Court of Appeals Wednesday. In two briefs totaling more than 130 pages -- one devoted to USF issues, the other to ICC issues -- the commission argued its 2011 USF/ICC order was lawful, necessary and well within the FCC’s authority. Challengers to the order are merely “seeking to preserve the status quo,” the FCC said, arguing the claims of overstepping jurisdiction and violating procedure are “baseless."
The USF/intercarrier compensation order remained intact after the sixth order on reconsideration, released Wednesday. In response to several petitions for reconsideration, the FCC declined to reconsider adoption of its high-cost universal service support rules for rate-of-return carriers, and declined requests to reconsider the monthly per-line cap of $250. The original order “represents a careful balancing of policy goals, equities, and budgetary constraints,” the commission said. The latest iteration did make what Chairman Julius Genachowski called “some modest adjustments” to simplify spending caps and give the Wireline Bureau more flexibility to “maintain certainty regarding year-to-year funding levels.” Commissioner Ajit Pai wrote separately to criticize unpredictable benchmarks he thinks will undermine efficient and prudent decisionmaking by rate-of-return carriers.
Human judgment is necessary in executing the FCC’s quantile regression analysis, since it “is currently and likely always will be inaccurate to such an extent,” said a white paper from Alexicon Consulting and Balhoff & Williams, filed with the FCC Thursday (http://bit.ly/Zv4j8K). The analysis determines telcos’ high-cost support and was implemented as part of the FCC’s November 2011 USF order. The report’s two authors are listed as Alexicon Principal Vincent Wiemer and Michael Balhoff, an attorney with Balhoff & Williams.
House Communications Subcommittee Chairman Greg Walden, R-Ore., said he hopes the FCC’s open Internet order falls when the U.S. Court of Appeals for the D.C. Circuit rules on the FCC’s authority to impose the regulations, he said at the NARUC conference Tuesday. If they do, Walden said he will block any legislative efforts to reinstate the rules. “Let me be clear, not on my watch,” he said.
NARUC will tackle spectrum sharing, emergency communications coordination and the FCC’s “repeated abuses of informal rulemaking,” according to draft resolutions released this week (http://xrl.us/bob6pm). State regulators will consider the resolutions at their winter meeting in Washington in February. The proposed resolutions delve into past controversial territory, such as addressing FCC referral to the Federal-State Joint Boards on Separations and Universal Service. USTelecom objected to joint board referral provisions at the past two NARUC meetings, in Baltimore in November (CD Nov 14 p5) and Portland, Ore., last July (CD July 25 p8), although both of the resolutions passed.
Major changes in the U.S. telecom marketplace in the 15 years since passage of the 1996 Telecom Act highlight the need for reforms to that legislation, said Free State Foundation President Randolph May Wednesday during an event. The pro-deregulation think tank was promoting its new book, Communications Law and Policy in the Digital Age, which focuses on how U.S. telecom law and policy should change over the next five years. Reforms should reflect changes to the marketplace since 1996 -- the switch from analog to digital, the switch from narrow-band to broadband networks and the switch from a mostly monopolistic marketplace to one that’s highly competitive, May said. “Those changes call for a new communications law, and certainly, absent waiting for the new law, changes in the direction of communications policy,” he said.