FCC staff denied a Stratos Government Services request to exempt subcontractors from making certain USF contributions. Stratos in 2009 asked the commission to broaden the scope of a USF contribution exemption -- for entities providing interstate telecommunications exclusively to government or public safety entities -- by extending it to subcontractors. "Stratos asserts that the language of the government-only exemption itself is unclear and that the policy underlying the exemption supports including subcontractors," said a Wireline Bureau order Wednesday in docket 06-122. "We disagree with Stratos’s assertion that the language of the exemption itself is unclear because it does not explicitly include subcontractors." Separately, the bureau partially granted and partially denied a Morris Communications bid to reverse a Universal Service Administrative Co. decision denying the company's "request to reverse principal and late payment fees attributable to unpaid [USF] contributions, including those associated with a revised 2000 FCC Form 499-A." Morris said the USAC decision was unlawful and procedurally defective, and it was unable to pay due to changed financial circumstances. "We find no basis to reverse USAC’s decision and conclude that Morris has failed to demonstrate good cause that would warrant waiver of our rules," said a bureau order Tuesday. "Late payment fees based on Morris’s revised contribution obligation for the period in question were excessive. ... [W]e direct USAC to adjust those fees to reflect the updated contribution obligation for that period."
The industry USF contribution factor could stay in Q3 at 17.4 percent of carriers' U.S. interstate and international (long-distance) telecom end-user revenue, industry consultant Billy Jack Gregg emailed Wednesday. Previously, he projected the Q3 contribution (assessment) factor could spike to 19.6 percent, based on Universal Service Administrative Co.'s estimate for quarterly USF subsidy demand (see 1705030049). That sparked some concerns (see 1705040059).
The Missouri Public Service Commission sought more comments on a state USF proposal to add support for broadband-only services under its Lifeline and Disabled programs, said a notice last week. The agency asked how the proposal might affect the state USF’s projected 15 percent year-over-year participation decline. Comments are due June 5. Big telecom companies opposed expanding state USF support in comments earlier this month (see 1705020022).
Under a draft order, the FCC would reconsider a 2016 rural USF overhaul's treatment of rate-of-return telco provision of consumer broadband-only loops (CBOLs), a commission spokesman emailed Monday. "It relates to rules on the surrogate cost method for determining the cost of CBOLs and the ARC [access recovery charge] imputation methodology." NTCA discussed various ways to address "questions raised by its petition for reconsideration and/or clarification regarding imputation of Access Recovery on standalone broadband lines," said a filing by the RLEC group Friday in docket 10-90 covering a Wednesday phone call with an aide to FCC Chairman Ajit Pai. NTCA urged the agency "to adopt relief targeted along the lines of what NTCA requested in its petition, and to ensure that whatever relief is adopted will not have a material adverse impact on universal service support under a fixed budget." The recon item was sent to commissioners Thursday, according to the agency's circulation list, which was updated Friday.
The FCC Friday released the full text of three items it adopted at its meeting Thursday. A combined order/NPRM blocks hikes in a rural telco USF-related rate floor while the commission considers possible policy changes (see 1705180061). Another order makes broad changes to the Part 95 personal radio service rules for Citizens Band radios; walkie-talkies; radio-controlled toy cars, boats and planes; hearing assistance devices; and more sophisticated apparatus including medical implants and personal locator beacons (see 1705180040). A separate NPRM aims to harmonize various mobile earth station rules and open up the conventional Ka-band to those earth stations in motion (see 1705180042).
FCC commissioners voted 2-1 to freeze and review a rural rate floor that requires rate-of-return carriers to charge customers a certain monthly amount for basic voice service to avoid losing USF support. While voting in favor, Commissioner Mike O'Rielly suggested "means testing" the high-cost program so USF support better targets consumer need. Commissioner Mignon Clyburn dissented, saying the commission should have addressed other rural USF issues, particularly waste, fraud and abuse. NTCA and WTA applauded the freeze and criticized the rate floor.
California utility commissioners may decide if text messaging can be assessed USF fees, perhaps making it the first state to rule on whether texting is a telecom or information service. Public Utilities Commissioners could vote as soon as June 15 to open a rulemaking on whether text messaging is a telecom service that may be included in revenue-based surcharges for CPUC’s public purpose programs (PPP), which include California LifeLine, the Advanced Services Fund and other state programs, the agency said Friday. CTIA petitioned for a ruling that texting is an information service not subject to the fees, but consumer groups urged the CPUC to classify texting as a telecom service that may be assessed.
The FCC told a court it reasonably denied SureWest Telephone a waiver from a federally mandated USF state certification deadline the company missed in 2012 (see 1610260025). "This Court has repeatedly stressed that agencies should not waive their rules except where special circumstances warrant deviation and a waiver is in the public interest," said an FCC/DOJ brief Wednesday to the U.S. Court of Appeals for the D.C. Circuit that responded to arguments raised by Consolidated Communications, which took over SureWest. "SureWest’s confusion regarding the Commission’s rules -- which caused a filing error not remedied for many months -- is not the kind of special circumstance that can justify a waiver." In a 2016 concurring statement, then-Commissioner Ajit Pai agreed SureWest wasn't entitled to a waiver due to a simple mistake but said the decision to withhold $2.9 million in interstate common line support "for this minor filing error -- as we are required to do under our rules -- is exceedingly harsh." The case is Consolidated Communications of California v. FCC, No. 16-1431.
The Competitive Carriers Association and ITTA asked Congress to treat USF disbursements as nontaxable. The groups sent a joint letter Thursday to the Senate Finance and the House Ways and Means committees. “Congress clarifying the federal tax code to treat disbursements from federal broadband programs, including the USF, as non-taxable not only will further the public interest, but also spur investment in infrastructure and help create jobs,” CCA President Steve Berry said. ITTA President Genny Morelli agreed: “Making broadband support non-taxable will ensure that every dollar is used for investment in rural America that will expand broadband services and create new jobs.”
The solution to fake news is for mainstream media outlets to do a better job convincing the public of their utility and the thoroughness of their content, said Commissioner Mike O'Rielly in a speech on media content regulation at a Media Institute luncheon Thursday. Steps like hiring fact checkers and use of algorithms intended to give lower priority to fake online news run the risk of limiting discourse or catching up legitimate news coverage in the net, he said. Some media outlets and social networking organizations announced plans in recent months to tackle fake news (see 1701040025).