Idaho USF probably isn't sustainable and may require a legislative fix, Public Utilities Commission staff said at a teleconferenced Wednesday workshop. The PUC is assessing state USF viability, as several other states also are expected to revamp state funds this year. State changes are appropriate, but federal action is needed, Joint Board on Universal Service State Chair Chris Nelson told us.
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 FCC pushed back the launch of a Lifeline national verifier of consumer eligibility for the low-income USF support program, citing the need to address security issues. The initial implementation of the national verifier, scheduled this month in six states, is being postponed until "early 2018," said a Wireline Bureau public notice Friday in docket 11-42.
An FCC draft ruling and orders would undo 2015 net neutrality regulation and Title II broadband classification under the Communications Act, as Chairman Ajit Pai and staffers outlined Tuesday (see 1711210020). The 210-page draft declaratory ruling, report and order, and order released Wednesday would "reverse heavy-handed utility-style" broadband regulation "and return to the light-touch framework" that promoted a "free and open internet" before Title II classification, it said.
BALTIMORE -- State members of the Federal-State Joint Board on Universal Service are ready to recommend how to revamp USF contribution, said State Chair Chris Nelson at a NARUC meeting. State members met unofficially Sunday without their FCC counterparts, Nelson told us. Monday, the NARUC Telecom Committee delayed voting on two competing Lifeline resolutions, but voted for a draft resolution to support requiring direct dialing of 911 in hotels and other enterprises.
States with dwindling intrastate USF revenue aren't waiting for the FCC to decide how to revamp federal contribution. The Nebraska Public Service Commission this week became the second state regulator to adopt connections-based contribution to replace a revenue-based model. A representative for small rural companies applauded and said it’s time for the FCC to act. The Utah PSC previously adopted a connections mechanism that will take effect Jan. 1 (see 1710240042). The New Mexico Public Regulation Commission may soon hold stakeholder discussions about moving to connections.
The National Hispanic Media Coalition and other public interest groups urged the FCC to do more to address the communications meltdown in Puerto Rico and the U.S. Virgin Islands (see 1710040046). Chairman Ajit Pai, meanwhile, said he appointed a staff task force on hurricane recovery. Addressed to Pai, the letter also was signed by the Center for Media Justice, the Color of Change, Free Press and Public Knowledge.
A Thursday Senate Homeland Security Committee hearing on “weaknesses" in the Lifeline USF program's management identified in a May GAO report is likely to be less balanced in the program's favor than a previous committee hearing, communications sector lobbyists from across the political spectrum said in interviews. The Senate Commerce hearing last week included a strong defense of the program from Free Press Deputy Director Jessica González and calls from Democrats for Congress to be patient before the national verifier program instituted in the FCC's 2016 Lifeline overhaul order fully rolls out in 2019 (see 1709060063).
Senate Commerce Committee Chairman John Thune, R-S.D., and other committee members told us Wednesday they Are receptive to calls to delay discussions about a replacement or major overhaul of the Lifeline USF program until the national verifier program instituted in the FCC's 2016 Lifeline overhaul order fully rolls out in 2019. Most witnesses at Commerce's Wednesday Lifeline hearing said Congress should give the FCC a chance to fully implement the 2016 order's provisions. Thune and other committee Republicans also signaled interest in working with Senate Homeland Security Committee ranking member Claire McCaskill, D-Mo., on a Lifeline bill if offered.
Supporters and critics of the Lifeline USF program will closely follow a Wednesday Senate Commerce Committee hearing on issues identified in a critical May GAO report on the program for signs of whether the Senate has a sufficient appetite to pursue legislation to revamp parts of the program, lawyers and lobbyists said in interviews. The hearing and a Sept. 14 Senate Homeland Security Committee one will examine the GAO report, which said the Lifeline program’s management remains deficient despite FCC and Universal Service Administrative Co. efforts to improve controls over finances and enrollment by low-income consumers (see 1706290037).
FCC rules streamlining reporting duties of high-cost USF recipients take effect Sept. 22, said an order summary in the Federal Register Wednesday. The July 7 order eliminated some annual reporting requirements eligible telecom carriers face for network outages, unfulfilled service requests, complaints, pricing information, service quality certification and duplicative Form 481 filings (contingent on Universal Service Administrative Co. implementation of an online portal). Another summary in the FR sought comments by Oct. 23 under the Paperwork Reduction Act on a proposed FCC information collection in annual and quarterly reporting worksheets (Form 499-A, Form 499-Q) for telecom contributors to the universal service fund and telecom relay service fund. The information is also used to calculate FCC regulatory fees for interstate telecom service providers, it said.