Utah’s connection-based USF surcharge will increase to 60 cents monthly from 36 cents, starting May 1, the Utah Public Service Commission ruled 3-0 last week in docket 18-999-15 (see 1901150026). The commission noted CTIA red flags about increasing state USF costs but said “these concerns offer no basis upon which to delay or refuse to implement the necessary increase to the surcharge.” The commission won’t second-guess the legislature, which made changes that "significantly increased costs," including adding broadband to services eligible for disbursements. The change will be published in the Utah State BulletinMarch 15, with a comment period ending April 15, the agency said.
Windstream's Chapter 11 bankruptcy filing is "concerning," given its status as a large internet and voice service provider, said FCC Commissioner Geoffrey Starks Tuesday. "I will be monitoring the situation closely to ensure that there are no disruptions," he said, citing Windstream's provision of 911 and broadband services, and receipt of USF support. He's thankful Windstream "took immediate steps to ensure that it can continue to operate." Wireline Bureau Chief Kris Monteith made similar comments Monday (see 1902250058). The Communications Workers of America plan "to take an active part" in the bankruptcy proceeding to reorganize the telco's debt. "We are assessing the details as they emerge and have retained an experienced law firm to help protect the interests of our members and retirees," said a release posted Tuesday, noting CWA represents about 1,200 active members at Windstream locations. Windstream sought bankruptcy protection Monday after a recent court reversal in a bondholder dispute. The U.S. District Court of Southern New York awarded bondholder Aurelius Capital Management a $310 million judgment over the telco's spinoff of telecom network assets into Uniti Group (ticker: UNIT), a real estate investment trust, and their leaseback arrangements (see 1902190043). "While we are one pivotal event through the decision tree, and at current levels there are various upside opportunities for UNIT shares, there is simply too much process risk, too little visibility, and outcome variance far too wide (i.e. payment cut can range) to recommend the stock," Cowen analyst Gregory Williams wrote investors Tuesday. "What’s ultimately at stake for UNIT shares is the level of rental cuts, if any, that the company could incur through the Windstream restructuring process." Uniti's proposed deal related to Bluebird Network (see 1901150052) involving Otto Maly was granted antitrust clearance under an FTC early termination notice posted Monday. Maly is chairman of Maly Commercial Realty. Moody's downgraded Windstream's probability of default rating to "D-PD from Caa3-PD" Tuesday and said it subsequently will withdraw its ratings for the company due to the Chapter 11 filing.
Windstream expects to continue operating normally after its Chapter 11 filing Monday seeking to restructure debt in U.S. Bankruptcy Court for the Southern District of New York (see 1902250025). The FCC welcomed the assurance but vowed to remain vigilant on potential USF and 911 ramifications. Others suggested more Chapter 11 bankruptcy filings are possible and cited difficult economics for rural-oriented telcos. Some had suggested Windstream could seek Chapter 11 after a federal district court reversal in its dispute with bondholder Aurelius Capital Management (see 1902190043). Moody's Friday downgraded the carrier (see 1902220057) .
An FCC order, offering rural telcos more USF support in exchange for deploying 25/3 Mbps broadband, partially takes effect March 21, said a rule from docket 10-90 in Tuesday's Federal Register. It noted some rule changes in the order adopted Dec. 12 with an NPRM (see 1812120039) will take effect Jan. 1. OMB must approve other, associated reporting requirements, which will be the subject of a future FCC document in the FR, the PN said.
The FCC provided guidance on complying with USF rural healthcare program rules, with applications due through May 1 for the 2019 funding year beginning July 1. A telecom or broadband "service provider should determine the rural rate before it responds to a health care provider’s request for bids (FCC Form 465) and ensure that the rate is sufficiently documented at that time," said a Wireline Bureau public notice in docket 02-60 and Tuesday's Daily Digest. "Once the health care provider selects a winning bid and service provider, and enters into a commitment, any attempt to change the rates or other contract terms could violate the program’s competitive bidding rules. ... [H]ealth care providers must have program-compliant rural rates supported by documentation in hand before they file their FCC Form 466 funding applications." The PN noted three methods that service and healthcare providers can use to determine rural rates.
Amid the FTC's "huge portfolio that’s much different" from his agency's, FCC Commissioner Mike O'Rielly said, are "a bunch of things that are unrelated. It makes it a very challenging opportunity for them." He was answering a question about the two agencies' coordination on net neutrality, during an episode of C-SPAN's The Communicators to be online Friday and televised this weekend. He repeated that net neutrality is a federal, not state, issue and raised national security concerns about Chinese 5G gear.
T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure faced no outright opposition to the carriers' proposed combination during a Wednesday House Communications Subcommittee hearing. Many Democrats registered varying degrees of skepticism regarding the executives' claims. Questions tilted toward focus on antitrust aspects of T-Mobile/Sprint, as expected (see 1902120056). Some probed the carriers' claims about the transaction's benefits for deploying 5G. Legere and other executives from the two carriers met FCC Chairman Ajit Pai Friday, they said in a filing posted Wednesday in docket 18-197.
NARUC's Telecom Committee unanimously cleared an amended Lifeline resolution urging the FCC and Universal Service Administrative Co. ensure the national verifier accesses state databases required to automatically check users are eligible. USAC is responding to concerns and committed to making the NV work, South Dakota Commissioner Chris Nelson told us after the vote.
Ditching the requirement to notify VoIP users it won't work without power and eliminating supposedly outdated reporting requirements were among suggestions by telecoms, the cable industry and others for the FCC's 2018 biennial review of telecom regulations. Comments in seven dockets, which had been due Jan. 17 (see 1812180002), were posted Monday due to an extension from the partial federal shutdown.
Universal Service Administrative Co. hasn't de-enrolled any Lifeline users who failed the national verifier's automatic reverification, and no decision has been made on when that will happen, USAC Vice President-Lifeline Michelle Garber told the Telecom Staff Subcommittee at NARUC Sunday. A state commissioner and subcommittee members grilled Garber on high rates of users failing the automated check due to the NV not accessing all databases relevant to determining eligibility, with USAC not even trying to access them in higher cost states.