NTCA, Incompas, Public Knowledge and the Schools, Health & Libraries Broadband Coalition will release a "USForward" report Monday that "highlights the need for USF contribution reform, analyzes options for doing so, and provides recommendations on how best to reform this essential support mechanism," said a news release Friday. Consultant Carol Mattey, who wrote the report, will join the groups for a news briefing at 11 a.m. EDT.
The FCC Wireline Bureau wants comment by Oct. 4, replies by Oct. 19, in docket 05-337 on National Exchange Carrier Association-proposed changes to the average schedule USF high cost loop support formula, said a public notice posted in Friday's Daily Digest. The new formula would take effect on Jan. 1.
Alaska telecom associations submitted state USF update proposals with a connections-based contribution method to the Regulatory Commission of Alaska in docket R-21-001. The Matanuska Telecom Association submitted its proposal for a flat-rate surcharge Wednesday after previewing it at an RCA meeting last month (see 2108110059). The revenue-based fee went as high as 19% in 2018 before the RCA capped it at 10%, MTA said. The RCA would require the new method and let the Alaska USF administrator set the monthly per line fee, the group proposed: No distribution changes are necessary. The Alaska Remote Carrier Coalition filed a plan for a new “Remote Alaska Fund” with a connections-based method that at first would support voice and later broadband. The RCA should set the AUSF at $30 million yearly, split evenly between small and large carriers, it said. GCI neither supports nor opposes any reform plan, and “is ambivalent about a connections-based funding mechanism,” the carrier commented. “Such a charge is certainly not a magic bullet that will solve the funding issue; the source of funding would continue to remain with ratepayers.” It could mean $2 per line monthly for every Alaska phone customer, and the RCA should consider how that “charge itself harms the goal of universal service,” GCI said. Alaska Communications suggested splitting the proceeding into two phases, the first to decide whether to continue the fund and any contribution changes, the second to tackle distribution changes.
Q4 USF revenue is projected to be around $9.5 billion, the Universal Service Administrative Co. reported Wednesday, as expected (see 2108030062). The quarterly contribution factor will be 29.1%, emailed analyst Billy Jack Gregg.
There’s an "imbalance” in the FCC’s handling of annual regulatory fees, said FCC Commissioner Brendan Carr during an in-person Q&A at Thursday’s 2021 NextGen Broadcast Conference. Also at the conference, FCC and broadcast industry officials discussed use cases for 3.0 and emergency alerting. “We need to take a much stronger position when it comes to accountability” for “big tech” on benefiting from FCC activities, Carr said.
The FCC high-cost USF fund was scrutinized at the Technology Policy Institute (TPI) conference in Aspen, Colorado. Many said more-accurate broadband maps will help to spend the government money more efficiently. And "you got to get real maps of broadband" before spending infrastructure funds, said Dish Network Chairman Charlie Ergen. Otherwise, "you end up with very inefficient, wasteful spending," he said Monday. Eventually, "where you have electricity, you’re going to have fiber," he said. "I think that’s the end goal and that’s probably a 20-year process." Some got FCC Rural Digital Opportunity Fund money for areas devoid of people, Ergen and others noted. "The FCC is doing the right thing because hopefully without penalty, they will let people turn in the money" they could have received from RDOF in places they won't build out (see 2108130061), he said. "I hope companies are responsible and do it," he said of bid withdrawals. RDOF's problem is how areas were defined, not with the auction itself, said Stanford University Director-Public Policy Greg Rosston. "The mapping problem has got to get solved," he told a later TPI panel. To assist with effects from the COVID-19 pandemic, "the good news is it is billions" of dollars in broadband aid, said National Urban League Chief Operating Officer Donald Cravins. "We’ve come a long way in a short time. But we’ve lost a lot of lives." It's "an opportunity for us in America" and "we’ve got to get it right," he said. "I don’t know that we can afford to get it wrong again." The U.S. may never get 100% to get broadband, said Duke University economics professor Michelle Connolly. Even with landline phones, the country never got to 100%, responded TPI President Scott Wallsten.
The Regulatory Commission of Alaska should propose connections-based contribution for state USF, said Matanuska Telephone Association (MTA) representatives in a presentation at the Regulatory Commission of Alaska’s virtual Wednesday meeting. Adopting a flat surcharge of about $2.20 monthly per voice connection would stabilize the fund and generate about $25 million in funding, said consultant and former FCC Wireline Bureau Deputy Chief Carol Mattey. Nebraska, New Mexico, Maine and Utah previously took that approach, she said. The proposed change should bring in enough money to restore Alaska USF distributions to frozen 2016 levels, said Kemppel Huffman’s Dean Thompson. MTA recommends independent governance of the state fund by either issuing a request for proposals to find a third-party auditor or restructuring the Alaska Universal Service Administrative Co. board to have independent members rather than telecom industry members as it does now, said Mattey. Allowing companies that contribute to and receive money from the fund to also administer it is unique to Alaska, she said. MTA plans to formally submit its proposal by Sept. 1, said Director-Legal, Regulatory and Government Affairs Ryan Ponder. RCA Chairman Bob Pickett said he wants to resolve AUSF changes well before the fund sunsets June 30, 2023, and expects an active fall in the AUSF docket (R-21-001). The Oklahoma Corporation Commission last week adopted connections-based contribution on an interim basis (see 2108050049).
Oklahoma adopted a connections-based contribution method for state USF on an interim basis Thursday. The Oklahoma Corporation Commission voted 2-0, with a concerned third commissioner abstaining, for a proposed order to replace the 6.28% revenue-based monthly fee with a $1.14 per connection surcharge. In Texas, state senators are pushing Gov. Greg Abbott (R) and the Public Utility Commission to act before rates spike for rural customers. Alaska, California and Oregon are mulling changes.
The Q4 USF contribution factor will “plummet” to 28.5% from 31.8% during Q3, analyst Billy Jack Gregg emailed Tuesday. Universal Service Administrative Co. projected USF-applicable telecom revenue will drop $188.9 million to $2.12 billion in Q4, with quarterly demand decreasing due to “major reductions” in demand for high-cost and low-income funds. Despite the decrease, projected demand for 2021 is the “largest annual demand on the USF since 2012” at $9.3 billion, he noted. Projected USF revenue for 2021 will be $9.66 billion, Gregg said.
Provisions in the $65 billion broadband title in a developing infrastructure spending package weren't completely finalized Thursday, a day after the Senate cleared an initial test cloture vote 67-32 on proceeding to a shell bill (HR-3684). A bipartisan group of senators agreed Wednesday on the outlines of the package (see 2107280065). The Senate will vote Friday on the motion to proceed to HR-3684. Telecom-focused senators in both parties told us through Thursday that the thorniest broadband issue -- the extent of pricing transparency and digital redlining language -- remained in flux.