The FCC’s broadband policy objectives can only be achieved through clear and well tested “business rules” that provide sufficient support and enable company managers to prospectively predict which investments and operations will be recoverable through USF support, the National Telecommunications Cooperative Association told an aide to Chairman Julius Genachowski Wednesday, an ex parte filing said (http://xrl.us/bnk4u4). The necessary changes can be achieved quickly without affecting USF “budgetary” objectives, or creating any technical or administrative concerns, NTCA said.
Lawmakers and rural telcos continued to protest the high costs and burdensome requirements of the FCC’s USF/intercarrier reform waiver requirements, which they say will curb broadband deployment in areas where people need it most. House and Senate members told us the FCC must do something to reduce the cost of waiver applications, which they said can exceed $100,000. A commission spokesman said it’s considering some changes to the waiver process, but emphasized that the waiver requirements are necessary to properly evaluate each company’s ability to use the money in a fiscally responsible way.
There is a general consensus within the industry that the current wholesale/resale certification process is not working, the Independent Telephone and Telecommunications Alliance told an aide to FCC Commissioner Ajit Pai Tuesday, an ex parte filing said (http://xrl.us/bnkyuq). “Not only is it administratively burdensome for wholesale carriers, it also creates incentives for resale customers to provide inaccurate certifications” to avoid USF line item charges, ITTA said. ITTA said it endorses Cincinnati Bell’s reform proposal, under which the resale customer would provide the wholesale carrier with its Form 499 ID and the wholesale carrier would check this against the Form 499 Filer ID database to identify whether the resale customer is a contributor. If the reseller contributes to the USF, the wholesale carrier would not be obligated to contribute on the basis of the telecom services it sells to the reseller. If the commission decides to require service-specific certifications, as proposed in the contributions reform further notice of proposed rulemaking, “it must give carriers sufficient time to adopt the new system and specific guidance on how to implement it to avoid uncertainty and confusion,” ITTA said.
New York state established a new high-cost universal service fund Thursday, the New York State Public Service Commission ruled. It said the fund will ensure state residents retain access to phone service in high-cost rural areas. The commission approved the phase 2 USF joint proposal in a 4-0 vote, with one commissioner recusing himself. The fund will provide $17 million to as many as 31 eligible telco recipients over a four-year period.
Verizon urged the FCC to make clear that wholesale providers can’t be forced to make USF contributions on behalf of carrier-customers when they obtain a reseller certification from those customers, said an ex parte filing (http://xrl.us/bnkun3). In a meeting Tuesday with an aide to Commissioner Robert McDowell, Verizon executives discussed the joint petition of AT&T, CenturyLink, SureWest, and Verizon for clarification or partial reconsideration of a 2010 order directing TelePacific to give the Universal Service Administrative Co. the names and contact information of its wholesale providers of transmission services. Verizon asked the commission to clarify that wholesale providers that complied with the directions in the Form 499 worksheet instructions can’t be made to restate their revenue and make additional contributions to the fund “if it later turns out that a reseller, for whatever reason, either should not have signed a certification or should have submitted a modified certification,” the ex parte said. Verizon also said no commission rule prohibits a customer from accurately certifying on an entity basis that it is a reseller; and that any requirement for resellers to apportion their wholesale purchases would require costly changes to ordering, billing and reporting systems, and would increase carriers’ burden of administering the contribution system.
A federal court of appeals denied the National Telecommunications Cooperative Association’s request to stay implementation of the new reimbursement limits on certain capital and operating expenses in its USF order. In its order Monday in Case No. 11-9900, the 10th U.S. Circuit Court of Appeals said it was “not convinced that petitioner has carried its burden of showing that the circumstances justify an exercise of the court’s discretion to enter a stay in this matter.” The court also declined to order the FCC to rule on NTCA’s pending application for review before implementing the new reimbursement limits. NTCA had argued the new capping methodology would violate the commission’s statutory mandate to deploy predictable and sufficient mechanisms to advance universal service (CD July 2 p12). NTCA had also argued that inaccuracies in the data set used to designate geographic boundary areas and to compute the formulas’ coefficients’ and retroactive application to limit reimbursements for expenses incurred in past years. In a statement Tuesday, NTCA Senior Vice President-Policy Michael Romano said the association had recognized the “high procedural hurdle” to obtaining a stay, but the “pervasive and paralyzing uncertainty” of the caps justified the effort. “We anticipate that once the court has the full opportunity to consider how the FCC’s caps retroactively cut support for past investments and are undermining incentives to invest in broadband moving forward, the court will find that these caps are contrary to the fundamental statutory requirements of universal service,” he said.
In the last two years, he has perhaps submitted more comments to the FCC than any other party. He has chimed in on dozens of dockets, from media ownership to USF. He has no law degree or experience in working in the telecom industry. So far this month, he has submitted more than 300 comments.
Members of the National Telecommunications Cooperative Association are active providers of both fixed and mobile wireless services, contrary to an assertion made by Sprint Nextel in its reply comments regarding USF contribution reform, NTCA said in a letter Monday (http://xrl.us/bnkk2v). Sprint had asserted that NTCA’s arguments regarding assessing text messaging services should be disregarded because “none [of those parties] provide wireless services,” NTCA said, quoting Sprint’s comments. “In fact, sixty-one percent of NTCA members responding to an association survey in 2011 indicated that they provide wireless service to consumers,” NTCA said. The association hoped its letter would correct the “factual misunderstanding."
AT&T executives met with advisers to FCC Chairman Julius Genachowski and commissioners Ajit Pai, Mignon Clyburn and Jessica Rosenworcel last week to discuss two universal service-related draft orders, its ex parte filing said (http://xrl.us/bnkkzj). AT&T stated its understanding that the commission is considering a draft order upholding a 2004 Wireline Bureau order that established an asymmetrical deadline for filing revisions to a 499-A form. The commission should adopt the Internal Revenue Service’s three year deadline for all 499-A revisions, AT&T said. Regarding the pending draft order acting on a 2010 petition for clarification filed by AT&T and several other wholesale providers of interstate telecom services, the commission should pursue the reseller directly for amounts owed to the USF, AT&T said. AT&T is also concerned about “both the scope and the substance” of the guidance offered in the tribal engagement public notice released in July, the execs said. “The alleged ‘guidance’ provided little real world guidance and the concrete examples that were included in the notice are not realistic,” the filing said.
The FCC lacks “clear authority” to require standalone fixed broadband providers to contribute to the USF, the Wireless Internet Service Providers Association said in comments filed at the FCC, in response to a further rulemaking notice. “While commenters offer claims of dubious legal authority and purported policy benefits for such a proposal, what remains is that standalone providers are, at present, legally prohibited from receiving any USF subsidies and the proposal could require such providers to subsidize direct broadband competitors,” WISPA said (http://xrl.us/bnkku5).