No decision was made regarding whether NARUC will appeal the FCC’s USF order at NARUC’s telecom committee conference call (CD Nov 30 p8) Wednesday, John Burke, chair of the committee, told us. NARUC, which has until the end of December to file an appeal, is in no rush to make a decision, he said. Meanwhile, it appears that several states were considering appealing particular issues in the order, said Burke. As a board member of the Vermont Public Service Board, Burke said he was looking at preemption issues and some Vermont-specific issues. If Vermont appeals, it will file before Dec. 9, Burke said.
House Commerce Committee Republicans questioned FCC transparency during the agency’s Universal Service Fund proceeding. “Given the keen interest of Congress in seeing the FCC’s internal procedures subjected to public scrutiny, we are particularly concerned with the Commission’s recent conduct with respect to the universal service item adopted at the Commission’s October open agenda meeting,” Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore., wrote in a Monday letter to Chairman Julius Genachowski. The chairmen complained of another last-minute “data dump” by the commission. Also, the agency’s “practice of negotiating up to, and sometimes after, the Commission’s open agenda meeting appears to have reached an apex in the universal service proceeding,” they said. The Republicans asked Genachowski to say what changes were made to the USF order between the time it was considered and adopted. Meanwhile, the FCC sought comment Tuesday on additional ways to improve “transparency and efficiency” in Commission proceedings. “In particular, we seek comment on whether we should require commenters to file materials they cite in pleadings submitted in rulemaking proceedings, so that those materials are more easily accessible to all interested parties,” the FCC said. Comments are due 30 days after the notice’s publication in the Federal Register. Replies are due 45 days after publication. The House Commerce Committee marks up FCC process reform legislation Wednesday. Committee Democrats continued to oppose Walden’s HR-3309 in a memo that circulated late Monday.
NARUC might not appeal the FCC’s order on Universal Service Fund as a single bloc because states have varying views on the order, telecom industry officials told us. Though it’s uncertain if NARUC will appeal, the decision would depend on how much common ground there is among states, John Burke, chair of NARUC’s telecom committee, told us. Meanwhile, the industry has been lobbying at states to prevent appeals, a state official said. Despite a few states’ different views on preemption, NARUC has been consistent with its opposition to state preemption (CD Aug 26 p5).
Sprint Nextel began in Kansas its Lifeline program Assurance Wireless, the company said. The service includes a free cellphone and 250 free monthly voice minutes for eligible residents. Customers eligible for the program, which is funded by federal Universal Service Fund, include those who participate in Medicaid, Food Stamps/SNAP, General Assistance, Head Start, Supplemental Security Income, Temporary Assistance to Needy Families, United Tribes Food Distribution Program, Bureau of Indian Affairs General Assistance, Tribally Administered Temporary Assistance for Needy Families or the National School Lunch Program’s Free Lunch Program. Customers may also qualify based on low household income.
There seem to be many legal issues with the FCC’s USF Order, Wayne Jortner, senior counsel with Maine’s consumer advocate office, board member of USAC and a member of the NASUCA telecom committee, told us. Parts of the order don’t sufficiently adhere to the Telecom Act of 1996, he said. The FCC isn’t authorized to support a service (broadband) that it refuses to designate as a telecom service, he said. The cost model is the “brains behind the broadband plan” but it doesn’t yet exist, causing a great deal of uncertainty and making it hard to evaluate the merits of the program, he said. Consumer advocates aren’t in favor of impeding progress with unnecessary litigation but “if we determine that consumers are being harmed, we will consider legal challenges,” he said. The mandated broadband speeds would be too challenging for some companies while, and in the long term, insufficient for growing bandwidth needs, he said. Additionally, $4.5 billion as a total for all high-cost support, including new broadband subsidies, may not be sufficient to meet the broadband needs, he said. The real cost could be far higher, according to some analysts. But consumer advocates aren’t yet able to project the right number, Jortner said. The intercarrier compensation parts of the order would “artificially” remove a cost of doing business (use of incumbent’s networks) and leave revenue holes to be filled by rate increases, he said. The order also “unlawfully” preempts state jurisdiction of interstate access, he said. The order would increase prices for ILEC customers just as ILECs are losing customers to competitors, he said. Access recovery charge is “unnecessary and deceptive,” he said. The order also fails to address the downside of IP networks, he said.
TracFone took aim at the Link Up for America Coalition in a meeting with FCC staff, according to an ex parte notice filed by TracFone and published on docket 11-42 on Tuesday. “At the outset, there is no need to divert millions of dollars a year from the USF to provide Link Up subsidies (especially to wireless resellers) to provide service to low income households,” TracFone said in its letter, responding to a coalition filing from last week (http://xrl.us/bmjabi): “The Coalition asserts that Link Up support is somehow necessary to enable ETCs to initiate wireless services to low income consumers. That statement is unsupported and is facially false.” TracFone said it’s disturbed that the coalition views Link-Up as “a revenue replacement mechanism” and about the Coalition’s apparent belief that its members are entitled to Link-Up reimbursements for activation fees. “Nowhere has the Coalition provided any documentation as to which of its members -- if any -- are charged activation fees and how much -- if anything -- those members pay in activation fees,” TracFone said, saying the coalition’s claims of other wireless carriers’ activation fees “are especially curious.” Speaking of the coalition’s ex parte notice, TracFone said: “Nowhere does the Coalition offer any explanation as to why its two members’ activation fees are nearly double those charged by every other wireless carrier identified by the Coalition as having an activation fee. Neither does the Coalition indicate whether any of those seven named carriers impose activation fees on Lifeline customers. Not one of those carriers charges Lifeline customers activation fees. Apparently, only the Coalition members and a handful of minor carriers with similar strategies have the temerity to subject Lifeline customers to activation fees and even the greater temerity to ask the USF -- and those who fund the USF -- to subsidize those activation fees.” The FCC was expected to circulate an order on Lifeline Tuesday evening, and much of the recent lobbying has focused on Link-Up reimbursements. The coalition’s lawyer couldn’t be reached for comment Tuesday.
The FCC will take on the contribution side of Universal Service Fund reform early next year, with an order likely by mid-year, FCC Commissioner Robert McDowell predicted Monday during a question and answer session at an Federal Communications Bar Association lunch. McDowell said he has a commitment from Chairman Julius Genachowski to move forward quickly following the commission’s approval last month of an order reforming the distribution side of the USF (CD Oct 28 p1). “The chairman and I have talked,” he said. “Certainly, we have to do something."
The Rural Cellular Association panned the FCC universal service overhaul (CD Nov 19 Bulletin). “I appreciate the FCC’s work to modernize USF, but unfortunately the Order confirms our previous concerns that wireless services are significantly underfunded,” RCA President Steve Berry said. “Adequately funding wireless services would have encouraged competitive carriers to participate -- needless to say, this was a missed opportunity for the FCC to promote industry competition and the build-out of advanced high-speed mobile services."
Paul Clanon, executive director of the California Public Utilities Commission, circulated a memo ordering all interconnected VoIP providers (both nomadic and fixed) to register with the commission within 45 days. California Gov. Jerry Brown (D) recently signed Public Utilities Code Section 285, which mandates that the CPUC require interconnected VoIP providers to collect and remit surcharges in support of the state USF. The new law took effect Oct. 9. The California Competitive Telephone Companies (CALTEL) is seeking clarification of the memo, according to a letter by its executive director Sarah DeYoung. The group had questioned the effectiveness and efficiency of certificated carriers registering with the CPUC. Many CALTEL members offer both VoIP and circuit-switched services and they should have the ability to remit fees for all of the services they offer via a single transaction, CALTEL said. The Utility Reform Network had similar concerns, said staff attorney Christine Mailloux.
Rep. Lee Terry, R-Neb., has recurring concerns about whether the FCC’s Universal Service Fund order, approved last month, does enough to spur the growth of wireless (CD Oct 28 p1), the vice chairman of the House Communications Subcommittee said Wednesday at a National Journal conference on the future of technology. Spectrum and regulatory reform largely dominated the discussions.