FCC staff fined Simple Network $100,000 for not registering with the commission, which allowed the company to avoid paying into federal funding programs such as USF despite providing interstate telecom services. In response to a May 4, 2015, notice of apparent liability, Simple Network argued the Enforcement Bureau "did not adequately justify and explain the nature of the violation or the proposed penalty against the Company," said a bureau order Wednesday in File No. EB-IHD-13-00011486. "We disagree. After reviewing Simple Network’s response to the NAL, we find no reason to cancel, withdraw, or reduce the proposed penalty." The order said Simple Network's failure to register was "both willful and repeated, despite the Company's arguments to the contrary." In addition, it said, "notably, the Commission recently fined the Company $5 million for 'deceptively marketing its prepaid telephone calling cards'" (see 1510210053). Simple Network didn't comment Wednesday.
FCC staff posted USF budget control mechanism calculations affecting rural telcos in the first half of 2017 under a rate-of-return overhaul order issued in March. The mechanism is intended to maintain a $2 billion annual budget for rate-of-return carriers, said a Wireline Bureau public notice in docket 10-90 listed in Wednesday's Daily Digest. Representatives of NTCA, ITTA, WTA and USTelecom voiced concerns about the potential impact of budget controls on carriers' ability to meet reform goals under the order, said an NTCA filing posted Wednesday on a meeting Monday with bureau officials. They voiced concerns about (1) whether those sticking with revised "nonmodel" support would be able to deliver stand-alone broadband service at "reasonably comparable" rates or meet buildout obligations, and (2) whether those opting into new model-based support "would be able to achieve more aggressive buildout obligations (or even obtain such support at all) in the event of 'oversubscription' in the election process." NTCA expressed much interest in working "promptly" with the FCC to avoid a scenario in which "a lack of sufficient support could undermine the ability of carriers on both paths to carry out the mission of universal service, deter investment, and/or compel much higher prices" for rural broadband consumers. In a filing on a phone call with an aide to Chairman Tom Wheeler, NTCA called for "action immediately after November 1, 2016, with respect to the sorting of model elections and resolutions of any budget concerns that may arise should such elections result in 'oversubscription' for the model."
The FCC rejected a SureWest Telephone appeal of a Wireline Bureau decision denying its request for a waiver of a state certification deadline under the commission's rules. A 2011 USF order requires states annually to certify that eligible telecom carriers (ETCs) receiving federal high-cost subsidies are using that support for the deployment and operational purposes for which it's intended. SureWest wasn't included in an ETC certification list filed by the California Public Utilities Commission Sept. 28, 2012. "SureWest claims it was confused due to changes in the certification requirements for high-cost support and the fact that its high-cost support status changed after being acquired by a price cap carrier," said a commission order Wednesday in docket 08-71. When the telco later filed for certification and asked for an FCC waiver of the deadline, the bureau denied the request, "finding that SureWest’s 'mere confusion' regarding the Commission’s rules was not sufficient to establish good cause for waiver," the order said. The company filed an application for review on grounds the bureau failed to address material facts, but the commission Wednesday concluded the company "failed to establish any basis" for overturning the decision. In a concurring statement, Commissioner Ajit Pai agreed SureWest violated rules and wasn't entitled to a waiver due to a simple mistake. But the commission's 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," he said, urging the agency to re-examine its rules and penalties.
Comments are due Nov. 9, replies Nov. 16 on a telecom industry petition for FCC reconsideration of a policy statement instituting treble damages for violations of rules for payments to USF and other funding programs. The pleading cycle was triggered Wednesday by Federal Register publication of an FCC notice, which created docket 16-330. "The policy statement adopts a new treble damages formula for calculating forfeitures for telecommunications service providers' failure: (1) to timely pay their assessments for the federal Universal Service Fund (USF), Telecommunications Relay Service (TRS) Fund, local number portability (LNP), North American Numbering Plan (NANP) and regulatory fee programs; and (2) to file data required to assess payment obligations for these programs," said a petition filed March 6, 2015, by CTIA, NCTA, Comptel (now Incompas) and USTelecom (see 1503310052). The FCC's goals are laudable, the groups said, but the policy statement must be vacated because it wasn't promulgated with notice and comment under the Administrative Procedure Act. On substance, the treble damages policy is arbitrary and capricious, reflecting "a results-oriented effort by the Commission to drive the relevant forfeiture amounts as high as possible," said the groups, which pressed the agency in August to open a docket and seek comment on their petition (see 1608050061).
FCC Chairman Tom Wheeler anticipates the Enforcement Bureau tiger teams “should be up and running” by early 2017, he told House Communications Subcommittee Chairman Greg Walden, R-Ore. That was one of the many written answers Wheeler supplied in a 40-page document sent to the House Commerce Committee this month. He and the other four commissioners were responding to questions for the record that lawmakers submitted after a July 12 FCC oversight hearing.
Democrats could take control of Louisiana's telecom regulator after commissioner elections, but no other such dramatic shifts are possible in states that elect utility commissioners. A Democrat running for a Republican seat at the Louisiana Public Service Commission -- and who has listed affordable internet as a campaign priority -- could give her party a 3-2 majority. In another race, NARUC Telecom Committee Chairman Chris Nelson is running for re-election in South Dakota. In total across the country, elections will be held for 17 state commissioner seats in 10 states.
CTIA warned the FCC to avoid a “premature schism” between state eligibility programs for Lifeline and the updated federal program as a Dec. 2 implementation deadline nears. The group joined state commissions and industry groups supporting a USTelecom petition to give some states more time to align their Lifeline rules with changes to the federal program that added broadband as a supported service to the low-income program. USTelecom asked for temporary waiver of certain rules so Lifeline providers can continue enrolling consumers in the federal USF low-income subsidy support program based on state-specific criteria in 25 states, Puerto Rico and Washington, D.C. State support was expected in comments due Friday in docket 11-42 (see 1610180028).
Charter Communications and T-Mobile were among those spending much more on lobbying in Q3 than a year earlier. Charter's lobbying expense was $1.99 million, vs. $980,000. Charter successfully acquired Time Warner Cable and Bright House Networks in the interim. T-Mobile spent $2.17 million, up from $1.4 million.
The Kansas Corporation Commission reduced annual state USF support for RLECs by $411,976 and revised their originating intrastate access rates to bring them to parity with interstate rates. The RLECs will increase intrastate access revenue by a net $438,101. The changes will be effective July to coincide with FCC implementation of intercarrier compensation rules, the PSC said in the Tuesday order. Also, the PSC required RLECs to file revised intrastate access tariffs in a separate proceeding the KCC will open later on the FCC’s 2017 changes. Kansas commissioners raised alarm over falling state USF revenue, but a 2016 statute bars the commission from changing its revenue-based contribution method (see 1607010010).
The Missouri Public Service Commission supported a USTelecom petition to give some states more time to align state Lifeline rules with changes to the federal program that added broadband as a supported service to the low-income program. With an FCC implementation deadline coming early in December, multiple states are expected to support the USTelecom petition in comments due to the commission Friday in docket 11-42 (see 1610180028). The association asked for temporary waiver of certain rules so Lifeline providers can continue enrolling consumers in the federal USF low-income subsidy support program based on state-specific criteria in 25 states, Puerto Rico and Washington, D.C. In comments posted Wednesday, the Missouri PSC said it won’t meet the FCC Dec. 2 deadline because it faces a lengthy rulemaking process. Historically, getting a required fiscal impact review from the state Department of Economic Development has taken “a few weeks to over a year,” it said. “As a general rule a minimum of six months is needed to complete a formal rulemaking.”