The USF contribution factor for Q1 will drop to about 16.7 percent from Q4's 17.4 percent of carrier interstate and international telecom end-user revenue, emailed industry consultant Billy Jack Gregg on Sunday. He said the Universal Service Administrative Co. projected the industry revenue base would fall by $247 million to $13.97 billion in Q1, but USF demand was projected at just $1.98 billion. "The decline in first quarter 2017 revenues continues the downward trend in the USF contribution base, which places upward pressure on the USF assessment factor. USF revenues for the four quarters ending the first quarter of 2017 are $2.641 billion lower than revenues for the four quarters ending the first quarter 2016, a 4.4% decline," he wrote.
Educational entities and most others backed the off-campus E-rate subsidy support proposals of Microsoft and others in one petition and the Boulder Valley School District (BVSD) in Colorado in another. Some telco interests opposed the petitions, NCTA voiced concerns and a few others asked the FCC to adopt certain criteria for guidance or an alternative approach. Replies were posted Tuesday and earlier in docket 13-184 in response to a public notice (see 1609190051).
Sandwich Isles Communications faces $77 million in repayment duties and proposed fines from the FCC for violations and apparent violations of the USF high-cost program in Hawaii, with more repayments to come. The commission also ruled against SIC in a cost dispute with AT&T and the National Exchange Carrier Association (NECA) over an undersea cable. The agency noted Sandwich Isles has continuing obligations to its customers and can't discontinue telecom service without express authorization.
Seeking to expand rural broadband across Wisconsin, Gov. Scott Walker proposed an extra $35.5 million in grants over three years. The Republican sent a draft bill Thursday to the legislature that would tap a state USF surplus to increase funding to the Wisconsin Public Service Commission’s Broadband Expansion Grant Program and the Department of Administration’s Technology for Educational Achievement (Teach) program, the governor’s office said in a news release. If approved, the appropriations bill would bring total funding for the broadband programs to $52 million over three fiscal years. The bill also bans the Natural Resources and Transportation departments from requiring appraisals or charging fees before granting permits or easements for construction of broadband infrastructure in underserved areas. “The proposed legislation we’re asking the Legislature to act on triples the state’s broadband and technology investments and it will allow Wisconsin communities, especially in rural areas, to compete for jobs, improve education, and provide a higher quality of life,” Walker said. Madison-based LEC TDS Telecom said it will pursue the new broadband funding. “We plan to aggressively pursue more grants, should the legislature enact these important economic development proposals,” said TDS Vice President-External Affairs Drew Petersen. “We expect this to be acted on by the Wisconsin Legislature in early January and fully anticipate a vote by Valentine’s Day.”
The FCC is looking to resolve rate-of-return USF funding issues "as quickly as possible," Wireline Bureau Chief Matt DelNero said Thursday at a Practising Law Institute conference. He noted 215 rural telcos electing a new broadband model-based mechanism sought $310 million in annual subsidy support above an FCC budget, and the agency had allocated only an extra $150 million. The bureau is consulting with all the commissioner offices in search of a solution in the near term to make the new rate-of-return USF structures work for as many carriers as possible, he said.
Rep. Greg Walden, R-Ore., beat out at least two opponents in his quest to chair the House Commerce Committee next Congress. The current head of the Communications Subcommittee, though junior in seniority in the race to succeed outgoing full committee Chairman Fred Upton, R-Mich., won the nod from a group of GOP leaders over the more-senior Rep. John Shimkus, R-Ill. (see 1611300054). The House leadership steering committee voted Thursday night, with industry officials telling us that Walden got the nod. Rep. Joe Barton, R-Texas, also had been a contender like Shimkus. Walden later confirmed he was tapped.
Three contenders are finalizing bids to lead the House Commerce Committee in the next Congress, and are ready to present before the 32-member Republican Steering Committee Thursday, they told us this week. Republicans are expected to ratify the committee recommendation Friday. The contest is expected to be especially tight and involves Reps. Greg Walden, R-Ore., and John Shimkus, R-Ill., long seen as the two leading candidates, and former Commerce Chairman Joe Barton, R-Texas. All told us they want to revisit net neutrality, core telecom statute in the 1996 Telecom Act, and one said this week Congress should look at repealing the FCC’s USF.
The latest iteration of net neutrality rules formally kicked off with a 3-2 party-line vote by FCC members in front of a standing-room-only crowd on Feb. 26, 2015. After many twists and turns in a lengthy process with millions of comments submitted, that included a significant course correction by FCC Chairman Tom Wheeler, the final order was released in March 2015. It reclassified broadband as a Title II telecom service subject to some common-carrier regulation under the Communications Act.
An FCC order setting broadband USF duties for Alaska Communications takes effect Dec. 22, after a summary was published in Tuesday's Federal Register. A certification mandate won't take effect until approved by the Office of Management and Budget because it involves a new information collection requirement, the summary said. The commission issued the order Oct. 31 establishing "tailored service obligations" to accompany almost $20 million in annual Connect America Phase II price-cap "frozen" USF subsidy support that Alaska Communications elected to receive instead of model-based support (see 1610310056).
NTCA and members pressed the FCC for $260 million in additional annual funding for rate-of-return USF mechanisms distributing model-based and non-model support. Without the additional funding for the non-model mechanisms, standalone broadband loop rates could be $20 to $100 over the $42 broadband-only monthly benchmark the commission specified in its March overhaul order, said an NTCA filing posted Monday in docket 10-90 on meetings with aides to all five commissioners and Wireline Bureau officials. Those rates are not for the actual retail service to consumers, but just the broadband-only loop components of that service, it said. When the component costs are combined "with unavoidable costs" -- access recovery charges, transport and transit costs, other operating costs and USF contribution fees -- "the actual retail broadband prices to consumers (putting aside any prospect of actual return or profit margin) would need to be $90 to $110 per month in some cases, and in some very rural service areas with few standalone broadband consumers to start the rates could approach $200 per month," the group said.