Republicans in the House and FCC took aim at Chairman Julius Genachowski for his proposal to require broadcasters to post political files online. At a budget hearing Monday of the House Appropriations Subcommittee on Financial Services, the plan was criticized by Chairman Jo Ann Emerson, R-Mo., and FCC Commissioner Robert McDowell. Genachowski defended the FCC’s authority to make the change and highlighted the commission’s progress freeing up spectrum and deploying broadband.
The Pennsylvania Public Utilities Commission unanimously approved the motion of Commissioner James Cawley Thursday to reopen the record of its rural ILEC access charge investigation order (docket No. C-2009-2098380) to examine the “cross-effects” from the FCC’s Universal Service Fund/intercarrier compensation order, the PUC said. The PUC will initiate a new proceeding no later than April 20 to examine the implementation of the FCC order, it said. The implementation of the FCC’s USF order triggers a series of compliance obligations, Cawley said. The FCC’s order also has material effects on major adjudication decisions by the PUC, and the PUC’s access charge order needs to be updated accordingly, he said. The PUC’s rural ILEC access charge investigation order had ruled that the intrastate switched access rates for rural incumbent LECs had to gradually move to their interstate equivalents. The rural ILECs would have been afforded “revenue neutral” recovery of “lost” intrastate carrier access charge revenues from retail local service rates through the use of a $23 monthly basic local residential service “benchmark.” That’s the residential local rate per month, and would not include various taxes.
Commissioner Robert McDowell said the FCC appears to be moving too slowly to wrap up all aspects of Universal Service Fund reform, including the Rural Health Care Program. His remarks came in a speech Thursday at the Mid-Atlantic Telehealth Resource Center Summit in Charlottesville, Va. The FCC approved last year the start of USF distribution reform and an order on the Lifeline program in January. But other work remains to be done, McDowell said. “I understand that some of you have been anxiously waiting for the FCC to move forward on finalizing our efforts to reform the rural healthcare program,” he said. “So have I. As part of the implementation of that plan, the commission has already reformed some of the other USF programs on a piecemeal basis.” McDowell said that in a “perfect world” the agency would have taken on all USF spending programs at the same time, while also completing contribution reform. “Consistent with my long-standing advocacy for truly comprehensive reform, I will continue to press the commission to complete all of its reform efforts, including reform of the rural healthcare program, as quickly as possible,” he said. McDowell said he saw the importance of telehealth during a trip to Alaska during his first year as a commissioner. “The most memorable portions of the trip were the health clinics,” he said. “There I could see how medical images from the most remote corners of Alaska were transmitted to specialists in Anchorage. I learned how using telehealth technology can actually save money because, in many instances, having that technology close at hand means the patient can avoid flying hundreds of miles to a hospital.” McDowell noted that while the FCC created the healthcare program in 2007, it asked for comments on possible changes in 2010. “The commission has not only garnered valuable information from those who commented but also has learned a tremendous amount from participants in the pilot program,” he said. “All of this information will be incredibly valuable as the commission moves to the next step in the reform process."
FCC Chairman Julius Genachowski said he’s “pleased” TV station blackouts on subscription-video providers seemed to have been kept in check as retransmission consent contracts expired and often were renewed at year’s end. Retrans blackouts and “very serious disruptions to consumers” were kept to “a minimum” in the cycle of agreements that expired around Dec. 31, he said Wednesday. “I know that took some work on the part of cable operators and broadcasters to get there -- so that’s good news.” Cable executives also speaking to an American Cable Association conference said FCC retrans rules need fixing, while broadcast officials said the system works.
Chairman Julius Genachowski voiced hope that the FCC will get data on broadband availability from small cable operators to help the agency direct money to fast-Internet projects in areas unserved by any ISP. The commission is “committed” to not funding broadband projects in areas that are already served and needs help from American Cable Association members in providing relevant information, he told the ACA’s convention Wednesday. He pledged the FCC will be careful to seek only what it needs so as not to overburden small companies with requests, and he hopes they'll deliver the needed documents. Genachowski also said the FCC wants to work with industry to keep a lid on viewer complaints about loud TV ads and will keep small operators in mind in reviewing whether to extend viewability rules for stations guaranteed cable carriage.
The FCC should wrap up this year an order providing for interoperability in the lower 700 MHz band, representatives of Vulcan Wireless said in a series of meetings at the agency. Creating a single band class in the band would “provide the certainty necessary for Lower 700 MHz A Block licensees to meet their looming build-out deadlines as well as upcoming USF mobility fund deadlines, allowing them to compete for universal service and other broadband funds intended to spur mobile broadband development in rural areas,” Vulcan said (http://xrl.us/bmxy5d). An interoperability requirement would also “address the ’spectrum crunch’ by unleashing 12 MHz of valuable and immediately available spectrum for competitive wireless broadband service.” The commission is slated to vote on a 700 MHz interoperability rulemaking notice at its March 21 meeting.
A Colorado bill seeks to modernize the state’s telecom law by phasing out subsidies in competitive areas of the state and investing in broadband in unserved areas, among other things. The bill targets CenturyLink customers in rural, hard-to-serve areas and could result in their loss of service, said CenturyLink, the largest provider in the state. Rural providers in the state support the bill, saying it might help them offset some of the revenue loss resulting from the FCC’s USF reform.
Changes in the Universal Service Fund are throwing many rural carriers into confusion about how to keep afloat once the USF spigot is turned down starting July 1. Companies that invested heavily in rural broadband say new rules limiting reimbursable capital and operating costs mean they won’t be able to repay loans. Others question the “safety net additive” reforms that they say unexpectedly eliminated promised financial support. The end result, rural carriers say, will be decreased investment in broadband, and an inability to maintain the phone lines currently in place.
Judging by the Universal Service Fund/intercarrier compensation order, originating access charges for all public switched telephone network-VoIP traffic is subject to interstate rates, not intrastate rates, Verizon executives told an aide to FCC Commissioner Mignon Clyburn Monday (http://xrl.us/bmw8ne). The meeting responded to a petition for clarification by Windstream and Frontier, which argued that originating charges had not been touched by the order (CD Feb 14 p13). “We do not dispute these carriers’ expectation leading up to the USF-ICC Transformation Order that potential reductions in originating access charges may be addressed but at a later date,” wrote Verizon Vice President Maggie McCready. Nonetheless, reading the order so that PSTN-VoIP traffic is subject to interstate origination rates “strikes the right balance and is consistent with the Commission’s objectives to avoid applying the legacy access charge regime to IP traffic, and also to treat all IP traffic in a symmetrical manner,” she said. Were the commission to “reverse course now” it would “perversely” disincent the migration of customers to IP platforms, “in order for carriers to continue charging higher intrastate originating access rates,” she said. Comcast executives told Wireline Bureau officials Thursday that the order “plainly mandates that the default rates applicable to such originating toll traffic are the originating carrier’s interstate access rates” (http://xrl.us/bmw8rn). Comcast urged the commission “not to reconsider” these provisions, even though the impact on Comcast “will amount to several million dollars annually.” Also last week, Windstream met with Wireline Bureau officials to discuss estimated reductions in annual originating access revenue it would see if the intrastate origination fees were “flash cut” to interstate levels, according to an ex parte filing (http://xrl.us/bmw8jh). It’s impossible to determine the exact impact of proposed rate reductions, “because intrastate originating access for PSTN-VoIP traffic has never been in dispute and incumbent LECs have no visibility into what percentage of traffic interexchange carriers will claim is PSTN-VoIP traffic,” the letter said. Because many of its estimated revenue reductions relate to payments to competitive LEC affiliates, a recovery mechanism permitting incumbent LECs to recover lost revenues would be “insufficient,” Windstream said.
A Georgia bill would rapidly eliminate the state’s $16 million Universal Access Fund (UAF), which funds rural phone companies and is financed by larger telecom companies like AT&T. HB-855 (http://xrl.us/bmwmgc) is being considered in the House. It would ignore the 20-year phase out of the UAF passed in 2010 and instead eliminate it by 2015. If the bill were passed, the UAF would be reduced to $6 million in 2013, to $3 million in 2014 and be eliminated in 2015.