The FCC's proposed USF contribution rate for Q3 is 17.1 percent of carrier revenue from interstate and international telecom service end users, said the Office of Managing Director in a public notice Tuesday in docket 96-45. That would be down from Q2's 17.4 percent and the same as what industry analyst Billy Jack Gregg recently projected after Universal Service Administrative Co.'s latest revision to its estimates for USF demand and industry revenue (see 1706050008). If the FCC doesn't act within 14 days, the proposal will take effect.
The California Public Utilities Commission may oppose the FCC on wireline and wireless infrastructure NPRMs and notices of inquiry. California commissioners plan to vote Thursday on proposed staff comments to the FCC, said an agenda. Staff asked permission to comment that the FCC is “reading its authority more broadly than the statutory language warrants,” said the draft comments released Friday. “Plain language of §253(d) does not give the FCC the power to promulgate rules to preempt state and local regulations.” The FCC “must act through case-by-case adjudication, not a blanket peremptory rulemaking,” it said. Staff disagreed that the FCC should remove or reduce copper notice requirements. The federal regulator shouldn’t reduce from 180 days the waiting period for a certificate to terminate service, and should keep a prohibition on disclosing network change information until after public notice, the draft said. “Absent this rule[,] an ILEC planning to retire copper could notify an affiliate which could lay fiber where a competitor already has a wholesale agreement, potentially putting that competitor out of business.” The FCC should maintain protections ensuring that disabled customers can continue to communicate on IP networks, and shouldn’t remove 2015 standards for discontinuance of legacy services and replacement services, it said. “Customers might lose free access to 911, or service functionality or coverage, or access to relay service.” Also on the agenda for Thursday’s CPUC meeting, commissioners will vote on opening a rulemaking to consider whether text messaging is a telecom service that must pay into state USF and other programs (see 1705150040). And commissioners will vote on whether to extend until Aug. 23 the deadline to align state LifeLine with changes to the federal low-income program.
Alaska Communications Systems said USF management faces "an acute crisis" affecting the FCC Rural Health Care (RHC) Program. ACS said recent regulatory actions "demonstrate that a secondary goal, shrinking the contribution factor, may be taking precedence over the Communications Act’s mandate to increase access to universal service." Universal Service Administrative Co. and FCC decisions reducing funding by 7.5 percent for approved RHC projects "have put rural health care providers ('HCPs') in an untenable position, leaving them incapable of paying for services ordered, and leaving service providers uncertain of recovering their expenses," said a company filing in docket 02-60 Friday. "The FCC is now considering a proposal to further harm the RHC program by using RHC program reserves to temporarily reduce the contribution rate rather than support real needs for rural health care," said ACS, citing USAC as changing, "without explanation," its 3Q recommendation for funding RHC from contributions to the RHC reserve (see 1706050008). "It is troubling that the Commission might inadvertently cede a golden opportunity to improve broadband access for rural HCPs in exchange for a merely cosmetic change to the contribution line item." The telco asked the agency to hike RHC funding without increasing the contribution factor and without borrowing from the RHC reserve fund or a high-cost program account. The FCC and USAC didn't comment Monday.
Commissioner Mignon Clyburn spoke positively of state broadband privacy efforts, following Congress repealing 2016 FCC broadband privacy rules. "When over 90% of consumers feel like they have lost control over their personal information ... government has a role to play when it comes to the protection," she told a Southeastern Association of Regulatory Utility Commissioners conference Monday, according to written remarks. "While I do not believe that any in the SEARUC member region have done so, over a dozen other states have introduced broadband privacy bills and I firmly believe that these federal and state privacy efforts do not have to be combative; they can be complementary. My goal of putting #ConsumersFirst holds true for privacy as well, which for me means that people and businesses who use broadband internet service should not reside in a regulation-free zone." FCC Chairman Ajit Pai and FTC acting Chairman Maureen Ohlhausen plan to harmonize internet privacy protections. Clyburn said FCC-proposed repeal of its 2015 broadband classification as a Communications Act Title II telecom service would "take away our strongest legal authority" for using USF to subsidize broadband, complicating "the fight to close the digital divide" and, potentially, state USF programs. She suggested it would be "mutually beneficial" for the FCC to adopt a nationwide Lifeline eligible telecom carrier application process accepted by all states. Clyburn said a Title II reversal also would add uncertainty to pole attachments and undercut FCC ability to use Section 253 to pre-empt state and local telecom barriers to tower siting and rights-of-way. She urged state regulators to work to reduce inmate calling service rates.
The FCC should be in no rush to push through changes to the separations regime for price-cap carriers, NTCA replied in docket 80-286. The FCC recently extended a freeze on jurisdictional separations rules for 18 months while a federal-state joint board attempts to develop new proposals (see 1705150064). The record doesn't "support comprehensive separations reform” now, NTCA said. “Current separations rules may ultimately need modification, if not complete overhaul, to reflect the evolution of the communications marketplace towards IP-enabled services that are interstate in nature. However, existing separations rules should be retained while reforms to Universal Service Fund and intercarrier compensation mechanisms that specifically sit atop the existing rules still take root.” The Moss Adams accounting and consulting firm agreed. In initial comments, associations representing carriers “each indicate in their own ways that now is not the time for the FCC to undertake significant reform of the Part 36 jurisdictional separations rules,” the firm said. “For the most part, Moss Adams concurs.” Moss Adams replied that NTCA is right, the FCC should allow USF and intercarrier compensation measures to play out for a while first, even if change ultimately is desirable. The two filed the only replies by our deadline Friday.
High-quality broadband, satellite communications and various devices play roles in e-health, early replies in FCC docket 16-46 showed Thursday. Comments were due later that day. "Reliable, secure, high-speed, high-bandwidth, low-latency broadband access is critical to enabling access to care and modern healthcare technologies," said Baxter. "As healthcare organizations transition from wired to wireless, and as data moves from within an organization’s private network to the broadband network, the cybersecurity, privacy, legal, and other risks grow. ... Guidance, tools, and policies" can help, it said: "Broadband-enabled services are used in all healthcare settings." Initial comments show such solutions "always depend upon a reliable and secure broadband connection of sufficient speed and capacity," wrote the Satellite Industry Association. SIA touted satellite broadband as a telehealth solution. Nokia said medical research shows health "benefits of self-monitoring in the areas of activity, weight and blood pressure and sleep." Initial comments on a public notice urged the FCC to hike rural healthcare funding; the USF healthcare connect fund has $400 million yearly (see 1705250035).
The FCC fined Advanced Tel $975,000 for failing to file required data and contributions to federal programs including USF and the telecom relay service fund for several years, said a Thursday forfeiture order. In its initial notice of apparent liability for forfeiture, the FCC sought a fine of about $1.59 million, but the company said it can’t pay that much and argued it should be reduced due to the statute of limitations. It didn’t dispute the alleged violations, the FCC said.
The FCC modified language in a notice of apparent liability approved under ex-Chairman Tom Wheeler against Network Services Solutions and its CEO for wire fraud and overbilling the USF Rural Health Care program, but otherwise is largely sticking with the fine, increasing it slightly from almost $21.7 million to just over $22.5 million. The company and CEO Scott Madison allegedly used forged and false documents to seek funding from the program, a violation of the federal wire fraud statute and the program’s competitive bidding rules (see 1611070045). The order was approved Monday, over a partial dissent from Commissioner Mike O’Rielly, and released Wednesday. “An erroneous or illegal payment from the Fund must be recouped,” the NAL said. “We have a duty to recover those misspent funds, and if payment is not received by the Commission as demanded, we have an inherent right to collect by exercising available legal procedures.” The company didn’t comment.
The Minnesota Public Utilities Commission will appeal a federal district court opinion that Charter VoIP is an information service that may not be regulated. The commission informed U.S. District Court in St. Paul of its appeal to the St. Louis-based 8th U.S. Circuit Court of Appeals in a Wednesday notice (in Pacer). With the FCC never ruling definitively on how to classify interconnected VoIP, observers see the case as having big implications for whether states also may regulate internet-based voice communications.
The USF contribution is now projected to drop in Q3 from 17.4 percent to 17.1 percent of carriers' U.S. interstate and international (long-distance) telecom end-user revenue, said industry consultant Billy Jack Gregg. Universal Service Administrative Co. projected Q3 industry revenue would be $13.11 billion, about $505 million less than Q2, which, combined with previously revised estimated USF demand (see 1705240058), would raise the contribution factor to 18.2 percent, Gregg emailed Friday. But in a Saturday email update, Gregg said USAC filed another revised demand projection based on rural health care fund (RHC) changes, including a determination that collections for funding year 2016 RHC programs would exceed demand by $63.8 million. USAC revised the Q3 RHC demand downward to $35.3 million. USAC also "found that $34.6 million reserved for FY2016 Healthcare Connect Fund obligations would no longer be needed, and used this $34.6 million to further reduce" Q3 RHC demand, he emailed. "After prior period adjustments and projected interest earnings, the final adjusted demand for the RHC will be negative $1.2 million, an overall reduction of $100.9 million from the RHC demand originally projected. The revision to the RHC reduces overall USF demand" for Q3 $1.896 billion, he wrote. "Because of the drop in RHC demand, the USF contribution factor for the third quarter will go down from its current level, in spite of the continued erosion of the USF contribution base."