The Q4 USF contribution factor will increase from 26.5% to 27.1%, “the highest contribution factor in the history of the USF," Universal Consulting owner Billy Jack Gregg emailed stakeholders Tuesday. The numbers are based on Universal Service Administrative Co. projections of revenue at $10.428 billion, up $209 million sequentially. “Total USF revenues for 2020 will be $42.6 billion -- the lowest in the history of the USF,” said Gregg. “This represents a decline of $33.6 billion, or 44%, since revenues peaked in 2008.” Total projected USF demand for 2020 will be $345 million lower than in 2019, Gregg said. “Because of the continued decline in the USF revenue base, the average assessment factor for all of 2020 will be 23.37%, the highest average annual assessment factor ever.”
Teeing up discussion on implementing an Oregon law requiring VoIP and wireless contribution to state USF, Public Utility Commission staff Monday released draft rules in docket AR-640 to discuss at an Aug. 31 workshop. The Oregon PUC aims to finalize rules by Jan. 1 (see 2008110047).
New Mexico should raise its broadband speed standard to 25 Mbps download and 3 Mbps upload to align with the national standard, the state attorney general office replied Monday in the New Mexico Public Regulation Commission’s State Rural USF proceeding (case 19-00286-UT). New Mexico’s current standard is 4/1 Mbps. "A key consideration, particularly in the context of the ongoing Covid-19 pandemic, is that the 25/3 Mbps standard can support videoconferencing that the existing 4/1 standard cannot,” the AG office wrote. Require 25/3 Mbps with “additional language to allow a carrier that is proposing a worthwhile project which does not meet the 25/3 Mbps threshold to petition the Commission to approve of its proposed project for good cause to serve for instance, in an extremely rural area,” New Mexico PRC staff wrote in a footnote of its reply comments. CenturyLink said the broadband fund should prioritize higher speeds, without specifying numbers. Other states are also weighing USF updates (see 2008110047).
Investigate Broadband VI for getting $1 million from the Connect U.S. Virgin Islands fund without meeting qualifications to receive the USF support, Viya said in a letter to the FCC Enforcement Bureau, posted Monday in docket 18-143. “Broadband VI already has taken Stage 1 support for which it did not qualify because it did not satisfy the fundamental eligible telecommunications carrier ('ETC') obligations of offering voice service and compliant Lifeline service during the support term,” alleged Viya, saying it’s part of a larger pattern of the company disregarding commission rules. The FCC should seek reimbursement, it said. "We are aware of Viya’s filing and are preparing a vigorous response," Broadband VI Chief Operating Officer David Zumwalt emailed us. "We strongly disagree with the claims." The COO added that Viya "enjoyed many decades of high-cost support which it stands to lose as a result of Connect USVI."
An Oklahoma proposal to switch to connections-based USF contribution needs further study, state Attorney General Mike Hunter (R) told the Oklahoma Corporation Commission (OCC). The commission posted findings of fact Monday and conclusions of law received Friday in docket OSF 201900316 about the state USF administrator’s recommendation to adopt a connections-based method to stabilize the fund (see 2008110047). The plan might have merit but “lacks significant evidence in several important areas, including the outcome of such a transition in other states and the possible shift of burdens between customer types and locations,” the AG said. The proposal’s estimated funding requirement includes unsubstantiated expenses “derived from private conversations between the Administrator and representatives of telecommunications companies,” he said. “These projections include alleged expenses that are not known and measurable.” If the commission still decides to move ahead, the AG suggested "a blended methodology” where connections-based contribution would apply to only 20%-25% for the first year in a “gradual” transition. The legislature’s “oversight and involvement is necessary to adequately reform the OUSF,” he noted. A coalition including the OUSF administrator, Windstream, CenturyLink and many rural LECs urged OCC Administrative Law Judge Dustin Murer to recommend the connections-based mechanism as lawful, fair and equitable and in the public interest. CTIA disagreed, saying supporters failed to show that the connections method won't violate state or federal law, that it won't hurt poor or unemployed people, or that the state USF is unstable.
Nebraska lawmakers voted 47-0 Tuesday for a broadband infrastructure bill. LB-992 would ease deployment on existing electric easements. It would require the Nebraska Public Service Commission to establish an E-rate special construction matching fund program to support fiber installation at libraries with state USF. Profits from leasing excess capacity on dark fiber that currently go to an internet enhancement fund would go instead to state USF, with the former fund to be terminated June 30. The bill would also create a state broadband coordinator and four regional technicians to support libraries with internet and computer access. The bill goes next to Gov. Pete Ricketts (R), who didn’t comment Wednesday.
The FCC voted 4-1 to cancel a 2016 proposal to fine AT&T $106,425 for E-rate violations because the notice of apparent liability was issued after the one year statute of limitations on the violations, said an order in Wednesday’s Daily Digest (see 1608260037). The original NAL argued AT&T’s failure to charge two Florida school districts the lowest corresponding price was a continuing violation of the rules. Commissioner Jessica Rosenworcel dissented, saying she respected the procedural argument but believes there were merits to the previous FCC’s approach. The 2016 FCC’s stance that some violations should be treated as continuing would lead to more accountability for USF carriers, she said. She also said the date of violations should be pegged to USF disbursements. Commissioner Geoffrey Starks voted “concur” but raised similar concerns: “The Commission should consider how we can best promote timely detection of violations to avoid future problems with the statute of limitations.” Commissioner Mike O’Rielly said the original NAL would have failed on the merits if it hadn’t been canceled. “The previous Commission’s attempt to evade the applicable statute of limitations through its continuing violation theory was offensive to the rule of law and must be thoroughly rejected,” he said. “This NAL was dismissed because it was procedurally flawed," emailed an AT&T spokesperson. "But it was also substantively flawed, and egregiously so, as its core factual and legal claims were simply wrong.”
More state commissions are eyeing contribution and other USF changes. The Oklahoma Corporation Commission may vote later this year on a USF administrator recommendation to switch to a connections-based mechanism. The Texas Public Utility Commission asked legislators to consider USF contribution changes next year. Oregon, New Mexico and Nebraska commissions are also reviewing state USF.
The FCC Wireline Bureau tied up loose ends on a USF telecom rebuild program for Puerto Rico and the U.S. Virgin Islands (see 2002250038). The application window for the Stage 2 competitive process opened Thursday and closes Sept. 3, the bureau said in Friday's Daily Digest. The bureau also released an updated list of the eligible minimum geographic areas and associated annual reserve prices, and location counts for Puerto Rico and the U.S. Virgin Islands for Stage 2 fixed support. It agreed to waive some letter of credit requirements for participants (see 2004080036).
The Tanana Chiefs Conference of Fairbanks, Alaska, urged the FCC Tuesday to take “expedited action" to review a Universal Service Administrative Co. decision denying its request to file three FCC Form 466 USF Rural Health Care Program funding applications outside the FY 2016 filing window. TCC cited President Donald Trump’s Monday executive order, which made permanent for rural communities an expansion of Medicare recipients’ eligibility to receive 135 types of services via telehealth (see 2008040068). The White House “tasked” the FCC “to work with other government agencies to ‘develop and implement a strategy to improve rural health by improving the physical and communications healthcare infrastructure available to rural Americans,’” TCC counsel Ronald Quirk said in a filing in docket 02-60. “Granting TCC’s Waiver Request comports with” the EO since “failure to grant … would result in the communities served by TCC suffering serious hardships if funding for the subject health clinics is denied.”