House Republicans will try to use the Continuing Resolution to stop the FCC from acting on its net neutrality order. In a speech Tuesday, House Communications Subcommittee Chairman Greg Walden, R-Ore., said he filed an amendment prohibiting the FCC from spending any money to implement the rule. Also at the NARUC meeting, Walden said he’s considering legislation to overhaul FCC process. He questioned the White House’s FY 2012 budget estimate for money that could be raised by voluntary incentive spectrum auctions.
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’s failure to deal with VoIP endangers the commission’s broader Universal Service Fund and intercarrier compensation regime reforms, said Windstream Vice President for Federal Government Affairs Eric Einhorn Monday. The commission’s rulemaking notice isn’t definitive about VoIP traffic, he said at the National Association of Regulatory Utility Commissioners’ winter meeting, and without clarity nagging questions “could unravel the system before we even get to intercarrier compensation reform.” Einhorn was part of a panel on USF/intercarrier comp reform.
Congress has “an obligation to get involved” in overhauling the Universal Service Fund, House Communications Subcommittee Chairman Greg Walden, R-Ore., said after a subcommittee hearing Thursday. (See separate report in this issue.) He said he wants to ensure that USF money goes to places that really need it and that the fund is managed properly. “We've had some very productive discussions with some of our committee members and developed some principles and are working on some further principles,” Walden said. He said Rep. Lee Terry, D-Neb., who last year introduced a USF revamp bill with former Rep. Rick Boucher, D-Va., will play a key role in the discussion. Walden again said there’s no specific date for introducing the Republicans’ planned resolution of disapproval against the FCC net neutrality order, but it will happen after the order appears in the Federal Register.
States aren’t expected to be squeezed out of the Universal Service Fund system anytime soon and they'll actively engage in the FCC’s USF and Intercarrier Compensation proceeding, Tony Clark, president of the National Association of Regulatory Utilities Commission, said in an interview. The FCC voted Tuesday to issue a broadly worded rulemaking notice to reshape the USF and ICC system (CD Feb 9 p1). The notice has an entire section on the role of states, an FCC official told us.
FCC Chairman Julius Genachowski abandoned trying to use Title II authority in the net neutrality order, but his proposed overhaul of the Universal Service Fund may revive the reclassification debate, an industry official and a former Obama administration adviser each told us. Genachowski wants to refocus the fund to support high-speed broadband, and his staff has drafted a notice of proposed rulemaking that the commission is expected to vote on next week. Congress is poised to jump into the universal service deliberations (CD Jan 28 p4).
FCC Chairman Julius Genachowski is taking an aerial view of revamping universal service and intercarrier compensation in a new rulemaking notice. It takes up in general the necessity of subsidizing and deploying high-speed broadband but leaves contentious questions like the contribution factor for another day, commission and industry officials said. As expected, the FCC circulated a rulemaking notice late Tuesday for the commission meeting Feb. 8. The commission wants to use “market-driven, incentive based policies and increased accountability” to shift universal service money to “near term support for broadband deployment in unserved areas,” the agency said in a news release. It seeks to adopt measures to address intercarrier compensation (ICC) “arbitrage, as well as a long-term transition from current high-cost support and ICC mechanism to a single, fiscally responsible Connect America Fund,” the FCC said.
Nullification of FCC net neutrality rules through the Congressional Review Act topped a list of communications and technology priorities for Republicans on the House Commerce Committee. Also listed in a staff memo Tuesday as “key issues” this year: Spectrum auction legislation, revamping the commission’s processes, broadband stimulus oversight and a Universal Service Fund overhaul. Colin Crowell, former aide to FCC Chairman Julius Genachowski, said on a panel Wednesday at the State of the Net Conference he doubts that the GOP’s planned resolution of disapproval concerning net neutrality will succeed.
Payphone operators’ request for emergency cash and long-term Universal Service Fund support was panned by Sprint-Nextel, Verizon, USTelecom and TracFone Wireless. The American Public Communications Council filed a petition last month asking the FCC for about $57 million in emergency Lifeline money and for a proceeding on whether payphones should receive universal service support permanently (CD Dec 6 p6). The petition drew support from the Florida Public Telecommunications Association, which said that the collapse of the payphone industry “has been greatly exacerbated in Florida and other states … due to the introduction of ‘free’ governmentally supported cell phone service offered by TracFone and more recently Virgin Mobile.”
CTIA supports “elements” of the Federal-State Joint Board on Universal Service’s recommended decision on changes to the low-income Universal Service Fund program, the group said in an FCC ex parte filing. The association reported on a meeting last week with Wireline Bureau officials. CTIA supported the board’s recommendation of the use of a national database for determining consumer eligibility for low-income Lifeline support, the filing said. “CTIA urged the Bureau to ensure that establishment of the database is done in a comprehensive manner that accommodates modern communications and addresses issues of waste, fraud and abuse,” the filing said. “Additionally, CTIA urged the Bureau to consider the national scale of the USF low-income programs and avoid a patchwork of 50 separate databases for eligibility without a national aggregation point."
Frontier Communications, which took over Verizon’s lines in 14 states last July, is set to increase rates for its FiOS video products due to rising cost, executives said in an interview. Broadband deployment and other Verizon transaction obligations as well as access revamp will be Frontier’s priorities this year, they said.