State government officials and others stressed benefits for rural schools as Arizona seeks to take advantage of up to $100 million in federal E-rate Category One funding for broadband. The state must act quickly to meet a likely April deadline to submit funding applications to the Universal Service Administrative Co., the officials said at an all-day Arizona Corporation Commission (ACC) workshop live-streamed Monday. The workshop is part of a rulemaking to create an estimated $8 million-$10 million state match of rural broadband funds with funding from the state USF (see 1701110062). With nearly a quarter of Arizona schools not meeting the national standard of 100 kbps per student -- affecting about 250,000 students -- the E-rate funding is a way to “get rural Arizona into the game,” said Commissioner Andy Tobin (R).
About 30 rural telcos told the FCC this past week they intend to stop offering broadband internet transmission service as separate components of their broadband internet access services. Minnesota Valley Telephone and Winthrop Telephone made filings (here and here) Friday of their broadband intentions, joining other rural telcos from Minnesota, Wisconsin and Iowa that made such filings in dockets 01-92, 14-28 and 10-90 earlier in the week. Under a Wireline Bureau clarification last June of the FCC's net neutrality and broadband reclassification order, the rate-of-return carriers said, "the revenues associated with the broadband internet access transmission would no longer be subject to the federal universal service fund assessment." FairPoint Communications made a similar move last year (see 1606280037).
Efforts to boost broadband in an infrastructure bill have appeal but face differences and uncertainties over the initiative's structure and size, speakers at a USTelecom event Thursday indicated. A telco executive urged using existing funding mechanisms and new tax incentives; a Senate Democratic staffer cited a plan to provide $20 billion for broadband through executive branch programs (see 1701240067); a House Republican staffer said his members are seeking to encourage broadband but are still working on a plan; and a Trump transition team member opposed repeating the 2009 broadband stimulus approach. The member said FCC restructuring should include an economics bureau; and an AT&T official cited its gigabit-speed efforts in six North Carolina cities.
FCC staff took many actions in Chairman Tom Wheeler's last three weeks in office, including some that were controversial, despite Republican pressure to act by consensus during the transition to President Donald Trump. Then-Commissioner Ajit Pai warned in December about "midnight regulations." He and fellow Republican Mike O'Rielly objected to several items issued in January -- a Wireless Bureau report criticizing AT&T and Verizon zero rated data practices, and certain Media Bureau broadcast orders -- and they indicated the issues would be revisited in a GOP-run commission.
In one of the first actions under new Chairman Ajit Pai, FCC staff approved 182 rural telcos to receive $454 million in annual broadband-oriented USF subsidies through the Alternative Connect America Cost Model (A-CAM). Rural telcos called the action a boost for rural broadband, though some called for further funding efforts. Pai said he wants to ensure rural areas get fast web service. Meanwhile Tuesday, he named bureau chiefs and other key staff (see 1701240064).
Outgoing FCC Chairman Tom Wheeler warned against attempts to "gut" the agency, including by moving core telecom oversight functions to the FTC. He also defended the commission's actions on net neutrality, broadband reclassification, privacy, zero rating, the incentive auction, USF changes and other issues. He was interviewed on C-SPAN's The Communicators (scheduled to air Saturday and Monday and posted here), the latest in a series of exit interviews and farewell appearances (see 1701190069 and 1701130064) before Donald Trump's inauguration as president on Friday, Wheeler's last day at the agency.
Rural telco officials met with commissioner aides to discuss Lifeline USF issues in their petition for reconsideration, one of many pending (see 1606240077 and 1608010028). NTCA and WTA welcomed FCC clarification of high-cost carrier stand-alone broadband Lifeline duties in response to another petition seeking a temporary waiver, which was dismissed as moot (see 1701090031), but said more needs to be done. "Resolution of the items raised in the Petition for Reconsideration is critical to a stronger Lifeline mechanism that better serves low-income consumers and limits the administrative burden of participating in the program for the small businesses that NTCA and WTA represent," the groups said in filings (here, here and here) posted Tuesday in docket 11-42 on meetings with aides to Commissioner Ajit Pai, Michael O'Rielly and Mignon Clyburn.
An FCC report provided an overview of E-rate USF "progress" and possible new actions. The staff report focuses on E-rate "modernization" since two 2014 overhaul orders, focusing on "reforms" in three major areas: "1) Expanding E-rate support for the equipment and services needed to deliver high speed Wi-Fi to classrooms and libraries. 2) Connecting all schools and libraries to high‐speed broadband services. 3) Ensuring the financial stability of the E-rate program." As for next steps, the report, given Wednesday to Chairman Tom Wheeler by Jon Wilkins, "advisor for management," said: "A continued focus on cost effective purchasing will be necessary if every school is to achieve the 1 Gbps per 1,000 users connectivity target within the current E-rate spending cap. [EducationSuperHighway] estimates that the average price for internet access must be reduced to $3/Mbps in order to reach the long-term connectivity target. The data shows that this is a realistic goal and that the reforms adopted in the E-rate Modernization Orders will continue to improve cost effectiveness in the coming years.”
FCC staff remanded five reseller USF appeals to Universal Service Administrative Co. for further consideration. The resellers are seeking a credit for USF contributions they say were made by their underlying providers, "or an adjustment to their revenue reporting for revenue they claim was reported by their underlying providers," said a Wireline Bureau order in docket 06-122 in Tuesday's Daily Digest. It said petitions were filed by American Telecommunications Systems, Value-Added Communications and Eureka Broadband seeking reconsideration of bureau denials, and by InComm Solutions and Five9 seeking review of USAC decisions. "We direct USAC to consider whether each reseller can demonstrate by a preponderance of the evidence that its underlying wholesale provider has contributed on the amounts at issue," said the bureau order. "If a reseller makes such a showing, USAC should not attempt to recover contributions for the subject amounts from the reseller, even if the reseller had the obligation to contribute."
The FCC issued its 2016 universal service monitoring report Friday, providing updated information on USF telecom subsidy programs and their impact. Retail telecom revenue subject to assessments for industry USF contributions continued to drop, totaling $30.6 billion in the first half of 2016, after being $63.9 billion in all of 2015, $66.9 billion in 2014 and $68.4 billion in 2013, while USF disbursements have fluctuated, totaling $8.4 billion in 2015, after being $7.9 billion in 2014, $8.3 billion in 2013 and $8.7 billion in 2012, said the lengthy report in docket 10-90. It was released by the Wireline Bureau and is the work of staff members of the Federal-State Joint Board on Universal Service.