Community anchor institutions require next-generation Internet connectivity, said the Schools, Health & Libraries Broadband Coalition (SHLB) Wednesday, releasing an "Action Plan" to bring "gigabit-speed-and-beyond networks" to all schools, libraries, health clinics and other anchor institutions by 2020. The group released a "Vision" paper in April kicking off its effort (see 1604270022). The FCC understands the community role anchor institutions play and "is doing everything in its power" to achieve the Gbps connectivity goal by 2020, said Gigi Sohn, counselor to Chairman Tom Wheeler, in the written version of a speech she gave at an SHLB conference. She noted FCC USF subsidy actions to increase annual E-rate telecom discounts to schools and libraries to $3.9 billion, to extend Lifeline low-income support to broadband service, and to provide billions of dollars to support broadband to more than 11 million Americans in high-cost rural areas. She said requests for the USF rural healthcare program have "exploded," with demand this year expected to top $350 million, up from just over $250 million in recent years. "Anchor institutions are not just a key part of the solution to the broadband availability challenge, you are also key to the adoption challenge," Sohn said. She said many Kansas City area residents wouldn't accept free gigabit connectivity from Google Fiber because of a lack of trust: "This is where community anchor institutions come in. Successful broadband adoption programs come from the bottom up, not the top down. You are trusted members of the community who know how best to serve residents." Sohn asked the audience to help the FCC develop a digital inclusion plan to better understand non-price barriers to broadband adoption. The SHLB Action Plan includes 10 policy papers making recommendations on various issues such as broadband needs, Wi-Fi and wireless networking, broadband subsidies and broadband adoption. "The papers share three common themes: Sharing, such as aggregation and public-private partnerships that eliminate silos and reduce costs; promoting competition to incentivize growth and bring more affordable options; and, funding strategies that help communities meet up-front build-out and deployment costs, and ongoing monthly fees," a release said. The competition paper recommends requiring Connect America Fund recipients to bid on requests for proposed E-rate funding, limiting special access prices and upholding "open access and interconnection" policies.
Fiber cable and contract construction services likely will "become much more expensive or unavailable" as industry deploys new broadband facilities in coming years under various FCC programs, warned WTA, lobbying the agency on the group's petition for reconsideration of a rate-of-return USF overhaul order (see 1605250068). Representatives of the RLEC group also said FCC guidance is needed on how transactions would be handled under a new broadband model and an updated rate-of-return mechanism. "Should actual build-out costs significantly exceed the estimated costs used by the Commission to set its 5-year build-out requirement for the Rate of Return Path and its 10-year build-out requirement for the Model Path, those build-out requirements will become onerous or impossible to achieve with the applicable high-cost support," said a WTA filing posted Tuesday in docket 10-90 summarizing a meeting with Wireline Bureau officials. "WTA has requested a streamlined process for revising build-out requirements for carriers on both Paths if substantial cost increases or other materially changed circumstances render the current build-out requirements unreasonable or impossible." The group said rural telcos increasingly are concerned that "digital subscriber line ('DSL') charges, middle mile costs and customer service expenses" are hindering their ability to certify that they satisfy the FCC's "reasonably comparable rate benchmarks for broadband service." Entities seeking a reduction in an ILEC's Connect America Fund support should be required to offer the same broadband speeds and comply with the same service duties, said WTA. It said members don't expect to receive support where cable companies offer equivalent service but have concerns about "questionable claims" by wireless ISPs.
Price-cap telcos said the FCC violated the law by refusing to give them relief from legacy USF voice duties in areas where they don't receive new broadband-oriented Connect America Fund support. AT&T and CenturyLink, joined by intervenor USTelecom, Tuesday filed their opening brief to the U.S. Court of Appeals for the D.C. Circuit, which is reviewing their challenges to 2014 and 2015 FCC orders (AT&T, CenturyLink v. FCC, No. 15-1038 and consolidated cases) (see 1601110036 and 1602050029). "The Communications Act requires the FCC to adhere to a basic principle: a carrier required to provide services in high-cost areas must receive support in the form of sufficient payments from a universal service fund. The FCC orders under review violate this principle," the telco brief said. "By the FCC’s own calculation, Petitioners and other carriers face more than $1 billion in annual unfunded mandates under the FCC’s orders." The telcos said Section 214(e)(1)(A) requires USF eligible telecom carriers (ETCs) to provide services that “are supported” by universal service funding. But the FCC rule "leaves in place statewide price cap carrier ETC designations that require those carriers to provide service in high-cost areas where the required services are not ‘supported’ by high-cost funds," their brief said. "Those obligations violate the straightforward text of § 214(e)(1)(A). Likewise, requiring that service be provided in high-cost areas without supporting it with disbursements from the Fund violates the statutory command in 47 U.S.C.§ 254(b)(5) and (e) that funding be ‘sufficient’ to advance universal service. The Act also requires States to designate ‘service area[s]’ for price cap carrier ETCs that are linked to the FCC’s 'universal service obligations and support mechanisms.' 47 U.S.C. § 214(e)(5) (emphasis added). Legacy statewide service areas violate this requirement because they are a product of the replaced ‘support mechanisms’ and bear no relationship to the targeted funding mechanism that now determines high-cost support." They also said the FCC violated "the principle of competitive neutrality" and the Administrative Procedure Act. The FCC/DOJ brief is due Sept. 2 (see 1606010042).
A bipartisan group of 28 senators asked the FCC to update the USF Mobility Fund. “USF should support mobile broadband at a minimum of today’s level to close the coverage gap while preserving existing service,” said the letter dated Monday, led by Communications Subcommittee Chairman Roger Wicker, R-Miss., and Joe Manchin, D-W.Va. “We ask you to give special attention as you work to establish Phase II of the USF’s Mobility Fund (MF). Given the importance of mobile services today, the MF should be retained and updated to ensure that funding will promote new mobile broadband deployment in unserved rural and agricultural areas and preserve and upgrade mobile broadband where it is currently available. Importantly, the FCC must rely on realistic measurements of network experience on the ground to determine areas to support.” Competitive Carriers Association President Steve Berry lauded the letter. “USF must provide sufficient and predictable support to preserve and expand mobile broadband networks to meet consumers’ growing demand for wireless services and to ensure high-speed mobile broadband is readily available for subscribers, regardless of location,” Berry said. “As the FCC works to establish Phase II of USF’s Mobility Fund, CCA encourages the Commission to continue to make preserving and expanding mobile broadband in rural areas a top priority. I totally agree with the Senators on the importance of broadband for agriculture connectivity as well as economic, educational, health care, public safety, and social connectivity.”
Civil rights groups and others asked the FCC to do more to protect consumers as telecom carriers migrate from traditional phone services to IP-based, broadband technologies. The advocates said "high quality, affordable and reliable voice and high-speed broadband services" should be provided to all Americans and consumer protection maintained during the technology transitions. Separately, incumbent telcos pressed for streamlined regulatory treatment in tariffing and discontinuing legacy voice services. They were among the parties lobbying the commission last week as it plans, at its Thursday meeting, to consider a tech transitions item taking various actions (see 1606240069).
A federal court said it will hear Charter Communications’ complaint challenging state authority over interconnected VoIP services. In a Tuesday ruling (in Pacer), the U.S. District Court in Minnesota denied a motion by the Minnesota Public Utilities Commission to dismiss the challenge. Charter’s complaint alleged the PUC overstepped its authority by imposing state regulations for traditional phone services on VoIP services. The case began in March 2013, when Charter transferred 100,000 Minnesota customers to an affiliate that provided VoIP phone service that wasn't certified by the PUC. The agency said interconnected VoIP is a telecom service subject to state regulation, but Charter and intervenor the VON Coalition said it’s an information service and subject only to FCC regulation (see 1605200015). Judge Susan Nelson said the case involves “questions of fact” that are inappropriate for resolution on a motion to dismiss. The PUC’s “attempt to have these issues resolved as a matter of law by comparison to judicial decisions and FCC orders addressing other services ignores the FCC’s case-by-case approach regarding particular services,” she said. Nelson said FCC decisions cited by the PUC -- including the net neutrality order and its USF order requiring interconnected VoIP to contribute to universal service -- didn’t settle the question of whether interconnected VoIP is a telecom or information service, nor did the Supreme Court’s 2005 Brand X ruling. The judge said her ruling Tuesday “simply determines that -- in this highly fact-dependent and complex field -- Defendants have not shown as a matter of law that, taking the allegations of the Complaint as true, Charter Phone is necessarily an ‘offering’ of telecommunications. Any such determination must await further proceedings.” The PUC will “vigorously defend its positions” as the case moves forward, a commission spokesman said. VON Coalition Executive Director Glenn Richards called the order “the necessary first step in what we hope will ultimately lead to a decision that the Minnesota PUC has no jurisdiction over interconnected VoIP." VON advocates for VoIP providers including AT&T, Vonage, Google and Microsoft/Skype. State officials have said that the recent U.S. Court of Appeals for the D.C. Circuit decision affirming the FCC net neutrality order may help the PUC fend off the Charter lawsuit (see 1606170049). Charter declined to comment Thursday.
FCC Commissioner Ajit Pai asked for state help in "combating waste, fraud, and abuse" in the Lifeline USF low-income telecom support program "since wireless resellers began participating." Pai wrote to members of public utility commissions in California, Oregon and Texas and a Vermont department to alert them to "some of the abuses we have seen with" the FCC National Lifeline Accountability Database (NLAD). In the letters posted Wednesday, he said he was contacting the four because their states ran their own Lifeline accountability databases and he hoped to learn from their experiences. "NLAD safeguards are critical to preventing duplicate enrollments" in Lifeline, which aren't allowed under the FCC "one-per-household rule," but wireless resellers can override the safeguards, Pai said. "Unfortunately, the NLAD is ripe for abuse," he said, saying the agency proposed a $51 million fine of Total Call Mobile "for its dubious practices" (see 1604080032). The agency's TCM investigation "revealed disturbing trends" in the industry, he said, as wireless resellers completed 5.89 million enrollments October 2014-April 2016 by overriding the safeguards, costing Americans $650 million. Pai said recently $476 million in Lifeline support was questionable and perhaps wasteful (see 1606080062). He asked the state officials to answer questions by Aug. 2 about the Lifeline compliance checks they have in place, potential overrides of safeguards and any remedies they had for potential abuses. The four were: Lisa Hardie, chairwoman of the Oregon PUC; Donna Nelson, chairwoman of the Texas PUC; Michael Picker, president of the California PUC; and Christopher Recchia, commissioner of the Vermont Public Service Department. The FCC recently expanded Lifeline support to broadband service and initiated a shift of Lifeline customer eligibility verification from carriers to a third party (see 1603310056). NARUC and some states have challenged the FCC federal broadband eligible telecom carrier designation mechanism (see 1606030053 and 1607010057).
Wisconsin and other states asked a court to vacate part of the FCC Lifeline order that extends USF low-income subsidies to broadband service, sets an annual budget of $2.25 billion and streamlines the program's administration (see 1603310056). "The States seek review of the Order’s creation of a new, federal Eligible Telecommunications Carriers (ETC) designation process and its asserted preemption of the State commissions’ primary authority to designate ETCs with respect to broadband services," said a state petition (in Pacer) to the U.S. Court of Appeals for the D.C. Circuit Thursday (State of Wisconsin, et al., v. FCC, No. 16-1219). "The States seek review on the grounds that this part of the Order exceeds the Commission’s jurisdiction or authority, violates the Communications Act of 1934 and the notice-and-comment requirements of the Administrative Procedure Act, and is arbitrary, capricious, an abuse of discretion, or otherwise contrary to law. The States request that this Court hold unlawful, vacate, enjoin, and set aside this part of the Order." Joining Wisconsin were Arkansas, Idaho, Indiana, Michigan, Montana, Nebraska, South Dakota and Utah, plus the state regulatory commissions of Connecticut, Mississippi and Vermont. NARUC recently also challenged the FCC's new federal broadband ETC mechanism (see 1606030053). The FCC didn't comment Friday.
The FCC hasn't adopted two USF orders to support rural broadband in Alaska despite commissioner statements to an Alaska senator that they would act in Q2. Commissioner Jessica Rosenworcel has voted in favor of both items, an official in her office said Friday. In addition, Chairman Tom Wheeler may have voted in favor of the two draft Connect America Fund orders targeting Alaska that he circulated in early June (see 1606100075) if past practice is any guide. His spokespeople didn't confirm that Friday.
Revenue from contributions to state USFs has declined in multiple jurisdictions, we found last week from state USF financial documents and from interviewing state and industry officials. Those officials cited a variety of reasons for the falling revenue. Some cited outdated contribution methodology, while others said the drop is part of deliberate efforts to control the size of funds. Some states reported efforts to revamp USF contribution methodology, and one said its hands were tied by state legislation.