Comprehensive review of Alaska USF will start by June 30, 2021, under an order adopted Thursday by the Regulatory Commission of Alaska in docket R-18-001. Commissioners voted unanimously for a proposed Alaska USF revamp that’s based on a plan by the Alaska Telephone Association (see 1805300054). The revised rules, which cap the revenue-based USF surcharge at 10 percent, would sunset after June 30, 2023. The RCA started working through details of the plan Wednesday (see 1808080022). “My main priority is to kill the existing construct as soon as possible,” said Commissioner Robert Pickett, who led RCA’s work on the matter. “Quite frankly, the existing construct is just so far out of whack with the reality of the telecommunications industry in this state, it’s unbelievable.” Pickett won’t be on the commission in 2021, “but I would hope that the commission and the industry at that point in time will take a clear-eyed look at what is actually happening, particularly in rural Alaska.” Addressing contribution is key if AUSF still exists after 2023, he said.
Incumbents and competitors in Puerto Rico and the U.S. Virgin Islands disagreed over how the FCC should divvy up USF support for the islands' hurricane-hit telecom networks. Puerto Rico Telephone Co. (PRTC or Claro) and Virgin Islands Telephone (Viya) urged targeting funding to their networks, but their rivals backed a competitive process to spread fund around. Reply comments were due Wednesday in docket 18-143, responding to initial comments on an NPRM proposing $889 million in "Stage 2" subsidies for fixed services (over 10 years) and mobile services (over three years): $698 million for Puerto Rico ($444.5 million fixed, $254 million mobile) and $191 million for the Virgin Islands ($186.5 million fixed, $4.4 million mobile). The notice was attached to an order (see 1805290028) that allocated $64 million in "Stage 1" for near-term network restoration (see 1808080011).
Huawei Technologies attacked the Telecommunications Industry Association's defense of an FCC proposal to bar USF subsidy support for products from companies seen as posing a national security threat. TIA's reply comments "misrepresent the record, are full of distortions and unproven accusations against Huawei, and fail to confront the statutory, administrative, constitutional, and factual deficiencies" in the proposed "national security blacklist," said Huawei's 50-page filing posted Tuesday, in docket 18-89, with 401 pages of exhibits. "As an example, TIA’s hodgepodge of reasons that the Chinese Government allegedly has undue influence over Huawei arbitrarily rests on speculation and is belied by both the law and the facts. As another example, TIA completely ignores both the statutory limits on the Commission’s USF authority and the lack of expertise in and responsibility for national-security issues that are necessary for any rulemaking in this context." TIA's comments and reply in the proceeding represent the TIA Public Policy Committee's views, noted Huawei, citing TIA footnotes. "The composition of that committee is undisclosed. Even Huawei, which is a member of TIA and has a representative on the board, has not been informed of the identity of the committee members." TIA's comments weren't "reviewed or approved by all of its members, or even by all members of its board," Huawei said. "While TIA claims that it submitted comments 'on behalf of its membership comprising hundreds of global manufacturers and vendors of ICT equipment and services,' ... this contradicts its own statements in the footnotes cited above, and it is not clear that its comments here are supported by more than a handful of such companies. TIA continues to refuse to disclose the identity of its members or other entities backing its Comments, who may be competitors of Huawei." TIA said Wednesday it's still reviewing Huawei’s filing. "That said, all commenters in this docket agree that protecting U.S. telecommunications networks is critical," emailed a spokesperson. "TIA continues to support the Commission taking carefully targeted action to address this pressing national security issue."
The FCC announced allocation of an initial $64.2 million in extra USF support to help telecom providers restore broadband and voice service in hurricane-ravaged Puerto Rico and the U.S. Virgin Islands. Providers will receive $51.2 million in Puerto Rico and $13 million in the Virgin Islands, with 60 percent going to fixed network operators and 40 percent to mobile network operators in both jurisdictions, said a Wireline Bureau public notice in docket 18-143 and Wednesday's Daily Digest. The top recipients are: Puerto Rico Telephone (Claro), $16.4 million of fixed and $5.7 million of mobile support; AT&T, $1.65 million in conditional fixed support and $12 million in mobile support spread over both jurisdictions; Liberty Cablevision, $11.1 million in conditional fixed support in Puerto Rico; Virgin Islands Telephone (Viya), $6.9 million in fixed support, and Vitelcom Cellular (Viya Wireless), $126,576 in conditional mobile support; T-Mobile, $4.4 million, and PR Wireless, $3 million, in mobile support in Puerto Rico; and WorldNet Telecom, $1.3 million in fixed support in Puerto Rico. Providers receiving conditional support must show in two months they have received relevant eligible telecom carrier designations. The short-term funding was part of a May order and NPRM proposing $900 million in additional and repurposed USF support for the islands over the mid-to-long term (see 1805290028). Hughes Network Systems said initial comments on the NPRM "overwhelmingly" demonstrate that satellite services "must be" part of the islands' broadband infrastructure and "should" receive USF support. The FCC "must take these comments into account and address the issues in its proposal that prevent the participation of satellite operators in this [USF] proceeding, including the arbitrary selection of the June 2017 Form 477 data filing as a cut-off date for participation; the unjustified application of latency requirements; and the decision to award funds using non-transparent, anti-competitive, subjective processes," said Hughes' reply Wednesday. "Failure to do so will result in the residents of Puerto Rico and the U.S. Virgin Islands being denied access to truly resilient and reliable broadband services."
Nebraska commissioners voted 4-1 for a hybrid state USF contribution mechanism with a $1.75 per connection surcharge for residential wireline, postpaid wireless and interconnected VoIP services and a 6.95 percent revenue-based surcharge for business and other services. CenturyLink and small rural carriers Wednesday applauded the Public Service Commission’s Tuesday rate design order in docket NUSF-111, which followed last year’s decision to move to a connections-based contribution mechanism. Cox and CTIA raised red flags. Other state commissions are working toward USF updates, including Alaska, New Mexico and Oklahoma.
The USF contribution factor could rise in Q4 to 19.1 percent from Q3's 17.9 percent of carriers' U.S. interstate and international (long-distance) telecom end user revenue, if projected revenue holds steady, emailed industry consultant Billy Jack Gregg in his quarterly update Thursday. Q3 had a rare projected revenue increase, but "if the long term trend of declining quarterly revenues continues, the USF assessment factor for the fourth quarter will be higher than 19.1%." He said Universal Service Administrative Co. Q4 revenue projections are due at the end of August. Projected USF demand for Q4 is $2.06 billion, $112.3 million more than in Q3, he said.
FCC Chairman Ajit Pai said he circulated an order that would extend by 90 days the window to file challenges to the eligibility map for the upcoming Mobility Fund II auction. The fund will provide up to $4.53 billion to support 4G LTE in unserved areas and should meet a critical need, Pai said Friday. “It’s critical that we get it right.” Limited USF monies for mobile service “must be effectively and accurately targeted to areas that lack unsubsidized 4G LTE service,” he said: The extension "will ensure fulsome participation in the process. I’m urging my fellow commissioners to vote this item quickly, so we can proceed with a robust challenge process, and then move forward with this important auction.” Carri Bennet, counsel to the Rural Wireless Association, welcomed the order: “Our members have been working tirelessly and spending financial reserves that would be better put toward expanding service in unserved areas to deal with an overly burdensome challenge process that has been part brought on by overstated inaccurate coverage data. Due to the overstated coverage that has been filed, the additional time will allow our members to launch additional challenges. More is needed though -- the FCC needs to review Verizon’s overstated coverage data as it is causing rural carriers to launch challenges and expend resources to disprove what appears to be a deceptive coverage map. This is a waste of resources and could be avoided if the FCC would step in and question the data.” Verizon didn't comment. "Rural and regional carriers depend on USF, coupled with private investment, to deploy new services in the hardest to reach areas," said a spokesperson for the Competitive Carriers Association. "It’s critically important that the FCC help to produce maps that accurately depict the geographic areas not covered by unsubsidized 4G and therefore eligible for Mobility Fund II support. A successful challenge process is a key piece of the coverage puzzle and this extra time will help improve the current unreliable coverage maps."
The FCC adopted a one-touch, make-ready policy and other pole-attachment changes in a broadband infrastructure order and declaratory ruling approved 3-1 by commissioners at a Thursday meeting. The item also said the agency will pre-empt state and local legal barriers to deployment, including express and de facto moratoriums that prohibit entry or halt buildout. "No moratoriums. No moratoriums. Absolutely no moratoriums," said Commissioner Mike O'Rielly, who also noted some targeted edits to OTMR parts of a draft. Commissioner Jessica Rosenworcel agreed with OTMR in concept but partially dissented over "deficiencies in our analysis."
Incumbent telcos voiced concerns with FCC broadband performance testing rules for Connect America Fund recipients (see 1807060031). The creation of separate frameworks for testing speed and latency "is inefficient, burdensome, and unnecessary to ensure compliance with CAF obligations," said a USTelecom filing on a meeting of representatives of the group and members Verizon, Frontier Communications, CenturyLink, AT&T and Windstream with Wireline Bureau staffers, posted Wednesday in docket 10-90. They recommended the bureau combine the two testing approaches, noting the agency's Measuring Broadband America program does that. They also said the order is unclear on "whether 'on-net' testing" by carriers is permitted, the "compliance framework should be more incremental" and "overprovisioning should not justify negating the test results." In a discussion with an aide to Chairman Ajit Pai, NTCA said Monday it "raised questions about the number of test locations and the required extent of network testing," and also urged "rate floor" and other USF actions. Mescalero Apache Telecom urged regulatory approval of the recon petitions it and Sacred Wind Communications filed (see 1805310032) to "submit alternative sources of information -- including actual deployment data -- in order to avail themselves of the relief" provided in an order relaxing tribal USF operations expense restrictions for carriers with 10/1 Mbps broadband deployment levels below 90 percent (see 1804050028). Mescalero noted petitioners drew some support and no opposition. Also citing no opposition, Adak Eagle Enterprises asked for resolution of its petition seeking reconsideration of a decision to deny AEE a second offer of model-based support.
FCC Chairman Ajit Pai said he plans to circulate a draft order "later this year" intended to ensure rural carrier high-cost USF support is adequate and efficient over the long term. Noting a March NPRM, Pai agreed the commission "must take a close look at expanding access to and funding for our small-carrier cost model and that we must end the unpredictable cuts to carriers not on the model," said his response to a letter from Kevin Cramer, R-N.D., and 129 House colleagues (exchange posted Monday in docket 18-5). "Increased funding will boost broadband deployment in rural America, and additional reforms will put our high-cost system on a more efficient path so that every American can benefit from the digital revolution," he said. Pai cited recent FCC actions aimed at boosting RLEC high-cost USF support and rural healthcare support, responding to concerns from Reps. Ben Ray Lujan, D-N.M., and Peter Welch, D-Vt. (exchange). The chairman defended FCC efforts to better target Lifeline USF support and combat abuse in the program, responding to concerns of Rep. Gregory Meeks, D-N.Y., and 57 House colleagues about agency proposals (exchange). Pai cited FCC Lifeline and high-cost efforts to help Puerto Rico and the U.S. Virgin Islands recover from hurricane damage, responding to the concerns of Rep. Nydia Velazquez, D-N.Y., and 47 House and Senate colleagues about the storm devastation and the Lifeline proposals' potential impact on the islands (exchange). Pai said the recent transfer of USF funds from a private bank to the U.S. Treasury "reduces risks" and maintains "rigorous management practices and regulatory safeguards," without disrupting revenue flows; he was responding to a letter from Gwen Moore, D-Wis., and eight House colleagues (exchange).