The FCC and stakeholders are making progress on a possible rural USF overhaul, NTCA Senior Vice President Mike Romano told us Wednesday. Romano said NTCA is continuing to talk to the FCC about a variety of ways to approach changes to the existing USF mechanisms of rate-of-return carriers. "Nothing’s firm yet, but I think we’re making good progress in finding a way through the logjam that's been tying things up for months now," he said. Various issues still have to be addressed, such as the basic structure of an overhaul and how to deal with new funding limits and unsubsidized competitive overlap, he said, and timing isn't yet clear. "We continue to treat USF reform issues as if the commission is going to circulate an order at any time," he said, referring to a December statement he made (see 1512240014). "We don’t know when it will circulate, but we're treating it as if it could be any day, any week, any month." A draft rural USF broadband overhaul order is unlikely to be on the tentative agenda due out Thursday for the Feb. 18 FCC meeting, but is more likely for the March 31 meeting, an industry source told us Tuesday (see 1601260063).
The FCC is expected to proceed with its monthly meeting Thursday, assuming the government reopens in time after its closure due to Winter Storm Jonas, a knowledgeable source told us Tuesday. The Office of Personnel Management as of late Tuesday hadn't announced the status of government offices for Wednesday. The FCC is to vote on a broadband deployment report pursuant to Section 706 of the Telecommunications Act, an order to require cable and satellite TV operators and broadcast and satellite radio companies to post public inspection files on the agency's online database, and a rulemaking notice on strengthening the emergency alert system. The broadband report is expected to say advanced telecom capabilities aren't being deployed in a timely and reasonable fashion under Section 706 (see 1601070059). The agency's two Republican commissioners appear likely to dissent from the report, the knowledgeable source said. Meanwhile, the FCC appears unlikely to address rural rate-of-return USF reforms at its Feb. 18 meeting (the tentative agenda for that is due out Thursday) but seems more likely to act on that issue at its March 31 meeting, an industry source told us. Commissioner Mignon Clyburn also recently said the agency planned to address Lifeline USF reform this quarter (see 1601210031). Spokespeople for the commission and Commissioners Mike O’Rielly and Ajit Pai had no immediate comment.
CTIA President Meredith Baker met with FCC officials to express concerns about the agency’s pending 11th broadband progress report and on USF issues. “CTIA highlighted the significant role that mobile wireless broadband services have cemented in the lives of Americans, and expressed disappointment that the Commission’s forthcoming … report may not affirmatively conclude that mobile wireless broadband deployment is occurring on a reasonable and timely basis,” the filing said. Currently, 99 percent of Americas have access to LTE, compared with 35 percent of consumers worldwide, Baker said. Wireless carriers invested a record $32 billion in their networks last year, she said. “American consumers use more than 11.1 billion MB of data every day,” the filing said. “As a result, mobile data usage increased more than 25 percent in 2014 alone, and more than ten times the volume from 2010.” The filing was in docket 15-191. The draft Telecom Act Section 706 report that has been on circulation would find that broadband wasn't being deployed in a timely and reasonable manner to all consumers (see 1601070059).
FCC Chairman Tom Wheeler disavowed knowledge of any agency advocacy of municipal broadband project outreach, as Senate Republicans had suggested. “At this time, I know of no fiscal year 2016 outreach plans focused on municipal-owned broadband networks,” Wheeler told a group including presidential contender Sen. Marco Rubio, R-Fla., and Senate GOP Whip John Cornyn, R-Texas, in a Jan. 15 letter the FCC released Monday. Sen. Deb Fischer, R-Neb., had led the GOP letter with eight senators’ signatures in December. Wheeler, in answer to their questions, told them no municipal provider receives support through the USF rural broadband experiments funding. Under FCC rules, “if a municipally-owned provider deployed a voice and broadband network covering 100 percent of a rate-of-return incumbent telephone company’s service area with service that meets the Commission’s minimum requirements, that could result in a loss of support for the rate-of-return company,” said Wheeler, saying no such situation currently exists. Wheeler also declined to name any “additional policies” on municipal broadband that may be coming, saying last year’s action was in response to specific petitions, and no petitions are now pending. “Commission officials and staff have regular contact with both private and public sector parties around the country about broadband deployment and competition,” Wheeler said when asked about outreach plans.
AT&T urged the FCC to update Lifeline USF to give eligible users more autonomy and to remove service providers from program administration obligations, including verifying the low-income status of users and delivering benefits to consumers. In a filing on a meeting with aides to two FCC commissioners posted Friday in docket 11-42, AT&T said, "We discussed ideas for reform that would benefit Lifeline recipients and strengthen the program such as establishing a third party verifier and replacing the current ETC designation process with a voluntary registered Lifeline service provider certification process." AT&T also addressed the commission’s legal authority to provide USF support to providers that aren't eligible telecom carriers (ETCs). In a separate meeting with FCC officials, Public Knowledge and other consumer groups asked the agency to modernize Lifeline to cover broadband service and allow providers to participate in the program without being ETCs. They said the commission has legal authority to authorize non-ETCs to offer Lifeline service and suggested a centralized, streamlined process to certify broadband providers in the program, including cable companies and community anchor institutions, a filing said. Without non-ETCs, there's a "very real concern that millions of Americans" needing Lifeline service, particularly in urban areas, will be left out, they said. Fixed and mobile voice providers should also continue to receive support, they said. Also at the Public Knowledge meeting were officials for the Benton Foundation, National Consumer Law Center, the Schools, Health and Libraries Broadband Coalition and United Church of Christ. Comcast and NCTA also met with FCC officials to support expanding Lifeline to broadband and simplifying the process for certifying providers, said filings last week (here and here). As the FCC considers covering broadband, CTIA said in a filing on an FCC meeting, "mobile wireless must continue to be an integral part of the Lifeline program and eligible low-income consumers should have choice and control over the mobile wireless service that meets their needs." The FCC plans to act on Lifeline modernization this quarter, Commissioner Mignon Clyburn said last week (see 1601210031).
AT&T and Verizon officials discussed possible accounting rule changes with FCC staffers last week in a proceeding that appears to be heating up after being quiet for most of 2015. AT&T’s meeting discussed “the impact of replacing Part 32 rules with GAAP [generally accepted accounting principles] in two areas: materiality and pole attachment costs,” said a company filing posted Friday in docket 14-130 on a recent meeting. Verizon also discussed materiality and pole-attachment issues, said a Thursday filing on the company's meeting with FCC officials.
Large telcos are seeking renewed USF voice support in remote areas where funding was cut off but their obligations to provide phone service continue under a transition to broadband-oriented mechanisms. Representatives of AT&T, CenturyLink, Frontier Communications, Verizon, Windstream and USTelecom jointly discussed the issue with FCC officials in a series of recent meetings, and Frontier sought relief in separate meetings with two commissioners, according to filings in docket 14-192. “It will happen, with some sort of path to broadband,” USTelecom Senior Vice President Jon Banks told us.
The Supreme Court could eventually review USF False Claim Act (FCA) litigation, a lawyer in one of the cases said at an FCBA seminar Wednesday. Vinson & Elkins attorney Jeremy Marwell said fraud allegations against recipients of USF support don’t qualify under the FCA, but he acknowledged it’s a “close question,” particularly in light of mixed court rulings to date. While Marwell was on the winning side of a July 2014 E-rate decision by the 5th U.S. Circuit Court of Appeals, which ruled the FCA doesn’t apply to USF programs (United States ex rel. Shupe v. Cisco, No. 13-40807), other cases are pending in the 7th Circuit and D.C. Circuit, which could create a circuit split. Marwell said he “wouldn’t be surprised” if the cases go to the high court.
Comments to the FCC are due March 21 under the Paperwork Reduction Act regarding reporting and record-keeping duties of recipients of USF Mobility Fund Phase I support. The FCC estimates it will take respondents up to 15,874 hours collectively to comply with requirements in submitting Form 690, according to a notice Wednesday in the Federal Register.
AT&T's and T-Mobile’s lobbying punch rose in Q4 compared with the same period last year. T-Mobile, which transitioned from the fourth-largest carrier to the third, spent $1.97 million in 2015’s Q4, well up from the $1.3 million it spent in Q4 a year earlier. AT&T, the largest carrier and now owner of DirecTV, continued its heavyweight spending at $3.49 million, up from the $3.06 million in the same quarter last year. Sprint and Verizon, meanwhile, spent less on lobbying. Sprint dropped to $635,313 this year from $772,658 in that quarter a year earlier, and Verizon spending was $2.52 million, down from $2.97 million a year ago.