The FCC put a hold on Lifeline USF reimbursement payments to Total Call Mobile, said a Wireline Bureau order Wednesday in docket 11-42 directing Universal Service Administrative Co. to carry out the action. "This temporary hold is a limited one," the bureau said. "It shall be effective beginning with TCM’s request for reimbursement in all states filed for the data month of May 2016, and shall remain in effect pending the Bureau’s receipt and evaluation of TCM’s final, complete response to the Bureau’s letter of June 1, 2016 and subject to the Bureau notifying USAC of any change in the terms of the temporary hold." The bureau noted the commission issued a notice of apparent liability for forfeiture and order resulting from an investigation by the Enforcement Bureau. The notice proposed fining Total Call Mobile $51 million for allegedly enrolling tens of thousands of duplicate and ineligible consumers into the low-income telecom support program (see 1604080032). Total Call Mobile General Counsel Mike Morrissey told us his company was "a bit surprised" by the FCC action "because we thought we had been responding" adequately. He said TCM had told the FCC it couldn't provide all the information the agency sought by June 13, but it provided over 120,000 documents, and planned to provide the rest by June 27. "Frankly, we hadn't heard there was a problem with that," he said, but the company is now trying to complete its submissions to the commission by Friday. "I think we’re working this out and believe we will be able to do so to their satisfaction and show that whatever happened back in 2013 and 2014, that we’re now in full compliance" with their reimbursement rules, he said, suggesting it could take weeks, not months.
Utah could exhaust its USF by early next year unless the Public Service Commission overhauls its contribution methodology, a state official said Tuesday at a technical conference live-streamed from PSC headquarters in Salt Lake City. The agency is eyeing methods to ensure telecom providers that pay into the state USF collect and remit required revenue, and ways to ensure funding, including possibly adding a line or connection surcharge (see 1606080064). Rural LECs suggested requiring interconnected VoIP companies to contribute.
House lawmakers sparred over the End Taxpayer Funded Cell Phones Act (HR-5525) on the chamber floor Tuesday, likely poised for failure Tuesday night in a vote under suspension of the rules. Passage under suspension requires a two-thirds vote, and a Democratic leadership aide told us Monday nearly all Democrats are likely to vote against the bill (see 1606200049). As expected, Democrats slammed the measure, as did wireless trade groups.
The 6th U.S. Circuit Court of Appeals likely will reject an FCC order that pre-empted state restrictions on municipal broadband expansion efforts, despite the commission's recent net neutrality and broadband victory in the D.C. Circuit, said Tellus Venture Associates President Steve Blum, a community broadband consultant, in a Tuesday blog post. Meanwhile, echoing a debate between Tennessee and the FCC, Free State Foundation President Randolph May suggested the 6th Circuit should overturn or curb the FCC's Telecom Act Section 706 broadband authority. Public Knowledge Senior Vice President Harold Feld disagreed, saying that outcome is unlikely. At oral argument in March, one of the 6th Circuit judges seemed to be skeptical of the FCC's muni-broadband order, and afterward, TechFreedom President Berin Szoka predicted the agency would lose (see 1603170031).
The FCC approved a National Exchange Carrier Association proposal to change the formula used to calculate USF high-cost loop support for "average schedule" rate-of-return telcos (see 1605160023). The new formula, which covers support from July 1 to Dec. 31, incorporates a reduction in the authorized rate of return from 11.25 percent to 11 percent, said a Wireline Bureau order in docket 05-337 listed in Monday's Daily Digest. That's the first 0.25 percentage point cut required by the FCC in its March rate-of-return USF broadband overhaul order driving the authorized rate of return down to 9.75 percent over six years (see 1603300065).
NTCA welcomed FCC clarifications of its rate-of-return USF overhaul for rural carriers (see 1603300065), and said more such efforts will be needed. Reacting to a Wireline Bureau order issued Wednesday in docket 10-90, NTCA Senior Vice President Mike Romano told us Friday: "There are always going to be implementation questions, and this is an important document in starting to answer those questions. But as with anything of this kind, sometimes the answers to the questions generate more questions." Romano said one example is that the FCC order explained how new budget controls were going to work, which is "helpful and needed explanation." But he said "it was a bit surprising" to find the commission expects the budget controls to begin to apply July 1. Although actual payments won't be affected until August, he said, it's difficult for rural carriers to plan budgets on such short notice, particularly when actual numbers, which can include financial "haircuts," aren't yet known. He said NTCA looks forward to further discussions. “It’s important to keep these kinds of things coming. We don’t want them to pull back in any way,” he said.
Sen. Brian Schatz, D-Hawaii, succeeded at quietly watering down the Senate’s set-top box rider attached to the FY 2017 Financial Services funding bill, which advanced through the full Appropriations Committee Thursday in a 30-0 vote. The rider, which would force a pause to the FCC's set-top rulemaking for further study, never came up directly during the long markup, encompassing FY2017 FCC and FTC funding. But Schatz changed the wording of the set-top rider through the bill’s manager’s package, unanimously accepted as part of the bill.
The FCC shouldn’t leave states in the cold as the commission mulls changes to rate-of-return rules for carrier cost recovery, said the Michigan Public Service Commission. The regulator and others filed reply comments that were due Monday in docket 10-90. The Michigan PSC said the FCC shouldn’t reduce or eliminate existing reporting requirements including Form 481, and urged the federal agency to reject the tentative conclusion that eligible telecom carriers (ETCs) shouldn't file a copy of Form 481 with states. Filling out and sending the form doesn’t cost much to telecom companies, but provides valuable information used by state regulators to prevent waste, fraud and abuse, the PSC said. Developing an online tool to permit access to all information submitted by ETCs is a good idea but shouldn’t exempt providers from filing a copy of Form 481 with states, it said. The PSC opposed removing service quality standards and consumer protection rules for ETC certification. “Many states, including Michigan, no longer have service quality and consumer protection standards due to deregulation,” it said. “Eliminating this requirement could create an environment for fraud and abuse and have the opposite effect of what the FCC intends.” Separately, rural carriers continued to warn about possible unintended consequences from sweeping changes, as they had in the first round of comments (see 1605130035). The FCC should “avoid injecting substantial administrative burdens and regulatory uncertainty into time-tested systems through subjective changes that will end up becoming a form of ‘Monday Morning Quarterbacking’ with respect to carrier operations,” NTCA said. “Instead, the Commission should focus its efforts on providing targeted prospective clarity where needed under existing rules to achieve policy objectives, promote certainty, and ensure accountability.” WTA said efficient USF spending is an important goal, but it shouldn't come at the cost of effective broadband deployment in rural areas. Acknowledging the complexity of the docket, the National Tribal Telecommunications Association urged the FCC to tackle tribal broadband issues first and separately from other issues. “The acceleration of broadband deployment on Tribal lands must be addressed as soon as possible and should not be delayed while the Commission resolves the multitude of additional complex issues raised in the Notice,” NTTA said.
The 2016 Internet Policy Platform, released Monday and backed by 17 public interest groups, urges policymakers to oppose “unreasonable practices, such as the use of punitive and unnecessary data caps and zero-rating schemes that favor the content and services of ISPs and their affiliates” and uphold the FCC net neutrality order and decision to reclassify broadband as a Communications Act Title II service. The backers include the American Civil Liberties Union, Demand Progress, Free Press and Public Knowledge. They sent the eight-page platform to party chairs and presidential contenders Hillary Clinton, Donald Trump and Bernie Sanders. “As the parties draft their platforms for 2016, they must listen to the millions and millions of people who want leaders to prioritize internet and technology policies that promote opportunity and free expression for all,” Free Press President Craig Aaron said. “The 2016 Internet Policy Platform offers a roadmap for any candidate truly committed to a future where everyone can share in the benefits of an open network free of gatekeepers, surveillance and discrimination.” The platform also addresses data security. Companies must take steps including “publishing annual reports about government data requests, notifying users when the government seeks to access their data or censor certain content, and requiring a search warrant before handing over user content,” the platform said. It urged reining in “Executive Order 12333, which is being used to indiscriminately collect masses of Internet data outside the U.S. -- even when that data includes some communications by people inside the U.S.” and opposing “legal limits to encryption systems that make them vulnerable to backdoor hacks and other incursions by government authorities.” The FCC “has a congressionally mandated responsibility to ‘accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition,’” it said. “The agency needs to take this mandate seriously and oppose the drift toward monopoly.” The groups encouraged promotion of “mobile broadband competition by taking a serious look at spectrum concentration” and acting “to reduce the stranglehold that the two largest carriers have over the most valuable spectrum -- both in upcoming license auctions and in terms of what these companies already control today.” They said the FCC should “safeguard” municipal broadband networks and “improve the efficiency and effectiveness” of USF programs.
The FCC rejected an appeal of a Wireline Bureau decision that denied a request of USCOC of Cumberland and Hardy Cellular Telephone (both U.S. Cellular units) to waive USF high-cost support filing deadlines. Rules 54.809(c) and 54.904(d) required eligible telecom carriers receiving interstate access support and interstate common line support to make certain certifications every year. While they've now been largely superseded by new rules under the 2011 USF and intercarrier compensation transformation order, the FCC said, U.S. Cellular in 2008 sought a waiver from the previous deadlines but was denied by the bureau and filed an application for review by the full commission. In its unanimous order Wednesday in docket 08-71, the FCC said the company failed to establish any grounds to overturn the bureau decision. U.S. Cellular didn't comment Thursday.