A draft order on a new mobility fund, circulated by FCC Chairman Tom Wheeler for the Nov. 17 commissioners' meeting (see 1610270054), is raising some concerns in industry. AT&T complained about the approach in a Monday blog post. Other industry players are reporting on recent meetings with officials prior to an expected sunshine notice cutting off further lobbying. The agency approved a one-time mobility fund in 2011 and five years later is moving forward on Phase II, as Wheeler promised the Competitive Carriers Association in September (see 1609200058).
Tuesday's elections could spell the end of line for some of Capitol Hill’s prominent voices on telecom and tech policy, particularly in the Senate but also the House. Senate Commerce Committee members up for re-election have been particularly vulnerable in a chamber where Democrats are believed to have a decent chance of retaking power, while lawmakers of both parties on the House Communications Subcommittee are virtually all safe. Telecom has seeped into some campaigning.
The Wireline Bureau sought public advice after demand for Alternative Connect America Cost Model (A-CAM) support exceeded the 10-year budget set by the FCC by more than $160 million annually. The bureau said 216 rate-of-return companies submitted letters electing 274 separate offers of A-CAM support in 43 states. NTCA wasn’t surprised by the high demand, and the rural association plans to meet immediately with the agency to offer suggestions, said Senior Vice President Mike Romano in an interview Thursday.
Alaska Communications welcomed the FCC's Monday order setting its service duties for using $19.7 million in annual Connect America Fund Phase II "frozen" USF subsidy support to deploy broadband in the state (see 1610310056). The company "is pleased to reach this important milestone with the FCC, setting the stage for the single largest deployment of affordable broadband under any one program in Alaska,” said Leonard Steinberg, senior vice president-legal, regulatory and government affairs, in a release Tuesday. The funding will assist broadband expansion to rural communities along Alaska's highways but doesn't address middle-mile needs for deploying affordable broadband in bush communities not accessible by road, it said.
New York state officials cited wide support for the state's request for expedited waiver of Connect America Fund requirements that Phase II broadband subsidy support in New York be awarded through competitive bidding. But some in the industry said in replies posted in FCC docket 10-90 that legal issues remain. Empire State Development Corp. is seeking a waiver that would allow it to tap federal CAF II support, declined by Verizon in New York, to help fund the state's own reverse auction of broadband subsidies for the same areas targeted by the FCC auction (see 1610260057). “The minimal opposition to the Petition was based on inaccurate factual and legal assertions of the waiver request and the many public interest benefits it would bring,” New York said. ViaSat said the record confirms legal barriers to granting the request. The waiver sought by New York is inconsistent with federal universal service policy and the statute governing federal USF distribution, the company said. The American Cable Association said the petition has “many potential benefits” for spreading broadband, but opposed it as “legally infirm” and suggested New York reconsider. USTelecom cautioned the FCC not to lose a national focus. It said the agency "must ensure that it balances any equitable allocation of CAF funds among the states, with the need to ensure the overall integrity of the CAF fund.”
The FCC adopted "tailored service obligations" for Alaska Communications Systems to accompany the $20 million in annual Connect America Phase II price-cap "frozen" USF subsidy support that ACS elected to receive instead of model-based support. "The company will receive Phase II frozen support for a 10-year term and be required to offer voice and broadband service at the same speed, latency, usage and pricing metrics as established for Phase II model-based carriers to at least 31,571 locations, primarily in census blocks identified as high-cost that are unserved by unsubsidized competitors, with limited exceptions," said the order issued Monday in docket 10-90. Commissioner Mignon Clyburn partially dissented.
The Senate Commerce Committee released its report Thursday on the Rural Health Care Connectivity Act (S-1916), which prompted its placement on the Senate floor legislative calendar under general orders. The bipartisan measure was introduced by Commerce Committee Chairman John Thune, R-S.D., in August 2015 and cleared from the Commerce Committee last November. The legislation would “include skilled nursing facilities (SNFs) among the types of health care providers that may obtain support from the Universal Service Fund’s (USF) Rural Health Care Program,” the 16-page report said. The House Commerce Committee cleared a companion version in May.
Sens. Roger Wicker, R-Miss., and Joe Manchin, D-W.Va., lauded the FCC’s announcement Thursday that changes to the USF Mobility Fund will be considered at the commission’s Nov. 17 meeting (see 1610270054). “This is the right move for Americans living in rural areas,” said Wicker, chairman of the Communications Subcommittee. “People should have access to high-speed mobile wireless service no matter where they live.” Manchin said the proposal is “an important step towards delivering that access to some of the hardest areas in rural communities to serve.” He and Wicker sent the FCC a letter on the topic earlier this year (see 1607110051).
FCC staff fined Simple Network $100,000 for not registering with the commission, which allowed the company to avoid paying into federal funding programs such as USF despite providing interstate telecom services. In response to a May 4, 2015, notice of apparent liability, Simple Network argued the Enforcement Bureau "did not adequately justify and explain the nature of the violation or the proposed penalty against the Company," said a bureau order Wednesday in File No. EB-IHD-13-00011486. "We disagree. After reviewing Simple Network’s response to the NAL, we find no reason to cancel, withdraw, or reduce the proposed penalty." The order said Simple Network's failure to register was "both willful and repeated, despite the Company's arguments to the contrary." In addition, it said, "notably, the Commission recently fined the Company $5 million for 'deceptively marketing its prepaid telephone calling cards'" (see 1510210053). Simple Network didn't comment Wednesday.
FCC staff posted USF budget control mechanism calculations affecting rural telcos in the first half of 2017 under a rate-of-return overhaul order issued in March. The mechanism is intended to maintain a $2 billion annual budget for rate-of-return carriers, said a Wireline Bureau public notice in docket 10-90 listed in Wednesday's Daily Digest. Representatives of NTCA, ITTA, WTA and USTelecom voiced concerns about the potential impact of budget controls on carriers' ability to meet reform goals under the order, said an NTCA filing posted Wednesday on a meeting Monday with bureau officials. They voiced concerns about (1) whether those sticking with revised "nonmodel" support would be able to deliver stand-alone broadband service at "reasonably comparable" rates or meet buildout obligations, and (2) whether those opting into new model-based support "would be able to achieve more aggressive buildout obligations (or even obtain such support at all) in the event of 'oversubscription' in the election process." NTCA expressed much interest in working "promptly" with the FCC to avoid a scenario in which "a lack of sufficient support could undermine the ability of carriers on both paths to carry out the mission of universal service, deter investment, and/or compel much higher prices" for rural broadband consumers. In a filing on a phone call with an aide to Chairman Tom Wheeler, NTCA called for "action immediately after November 1, 2016, with respect to the sorting of model elections and resolutions of any budget concerns that may arise should such elections result in 'oversubscription' for the model."