Pennsylvania Public Utility Commissioner Andrew Place shares stakeholder worries from initial comments to the FCC NPRM on capping the USF at $11.42 billion. The “hard cap” could reduce "needed support for the continuous deployment of broadband access networks and services," he replied in docket 06-122, on his behalf and not the PUC's. It could "create an artificial and unnecessary competition for funding resources between the constituent programs," he said. Place noted the FCC's plan came without "finalizing its long-standing proceeding on the reform of the federal USF contribution base and methodology in conjunction with the corresponding referral to the Federal-State Joint Board on Universal Service." Other replies posted earlier this week raised similar points (see 1908270053).
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.
Opposition poured in to an FCC proposal to cap the overall budget for the various USF programs and to combine the budget cap for two mechanisms to fund anchor institutions, in comments posted through Tuesday to docket 06-122. Stakeholders said such a plan would be difficult to implement and contradicts both the USF mission and the current FCC chairman's top priority to close the digital divide (see 1906030059).
INDIANAPOLIS -- There are alternatives to Congress and the FCC requiring carriers and others to remove from their networks equipment made by Chinese telecom gear makers, NARUC was told. Though some state commissioners later expressed skepticism, industry panelists (see 1:30 p.m. event listing) largely backed monitoring networks of U.S. companies for cyberattacks, including from Huawei or ZTE, and testing all equipment before installation for vulnerabilities. Stakeholders generally want testing and monitoring across the board, not limited to one company or manufacturers based in one country.
State commissioners hope the FCC takes note of coming NARUC resolutions (see 1907100028) on delaying some further changes to a billion dollar federal subsidy for poor people to get phone and broadband services. In interviews before their Sunday-Wednesday meeting to consider two such draft proposals, some expressed optimism the federal regulator might make changes midway through program revisions begun under the last presidential administration. Another telecom resolution, advocating no overall USF budget, lacks a sponsor and won't move forward unless it adds one, stakeholders noted this week.
The FCC’s Aug. 1 commissioners’ meeting will be headlined by proposed rulemakings on robocalls and the Rural Digital Opportunity Fund, per the tentative agenda and drafts released Thursday late afternoon. Members will vote on an NPRM on low-power FM technical rules, orders on 911 location and small satellites, plus items on a toll-free number auction and local franchising authority over cable.
Requiring Lifeline providers to use a federal database to check if consumers are eligible for government-subsidized, carrier-provided phone and broadband services is causing more concerns from states, as they lose the ability to run their own checks. NARUC members will vote at their July 21- 24 meeting on asking the FCC to halt activation of the national verifier (NV) in any more states this year, and separately on recommending the agency not cap the overall USF. NV rollout prompted concerns subscribers are being dropped from carriers' customer rolls over difficultly verifying eligibility even though they may indeed be eligible (see 1907080009).
Kentucky Lifeline subscribers may be decreasing partly due to the FCC and Universal Service Administrative Co.’s Lifeline national verifier rollout, said a group of RLECs and CLECs. They commented Wednesday in docket 2016-00059 at the Kentucky Public Service Commission about possible changes to state Lifeline support. Kentucky should expand state Lifeline support to include mobile service, revisiting a 2017 decision to limit it to landline carriers with declining enrollments, wireless companies said.
Some USF program allies raised alarms in interviews and statements about Friday's FCC 3-2 NPRM calling for an overall budget cap for the four programs (see 1905310069). Some plan to spread the word about the rulemaking to the public, hoping for a critical response. Advocates for government fiscal discipline had kinder words about the rulemaking.
By a party-line FCC member vote, the regulator began asking about starting an overall USF budget cap, as expected (see 1905240064). "Mindful of our obligation to safeguard the USF funds ultimately paid by ratepayers," and to ensure the money is "spent prudently" and consistently, the NPRM asks a number of questions.
Industry lawyers are watching a pledge by FCC Commissioner Mike O'Rielly to develop rules to prevent new E-rate-subsidized fiber networks from overbuilding existing USF-funded broadband providers and "stealing" their prime customers, such as schools. Kelley Drye said in a Thursday email blast that "one of the most significant things to watch may be Commissioner O'Rielly's questioning of USAC [Universal Service Administrative Co.] over possible use of USF money to overbuild existing broadband networks." Joel Miller, O'Rielly's chief of staff, emailed us that "Commissioner O'Rielly has made fixing the problem of overbuilding a high priority." Several Texas telcos this week offered suggestions for an FCC rulemaking to oversee the matter (see 1905230005). O'Rielly also calls for legislative fixes to prevent duplicative spending on broadband across federal agencies, and if other agencies and departments become involved, to ensure proper coordination.