Incumbent carriers are using “the government to ensure that they do not have to compete,” NCTA President Michael Powell said on the association’s website Monday. “Considering the overall objective of delivering broadband to all Americans, it is astonishing that the FCC is considering a regime in which the largest incumbent telcos would be granted the inherent right to all of the available money in certain areas, before any other industry (which are equally able and committed to serve) has a chance to compete.” Powell was referring to the right of first refusal provisions in the pending Universal Service Fund order. “Cable is the leading broadband provider in the nation, but it will have to stand in line behind wireline telephone companies,” he wrote. “Wireless is one of the most exciting ways for accessing the Internet (homage to Steve Jobs) yet they stand in the consolation line as well. And what is the harm of allowing competition?” Cable executives and lobbyists pushed hard in the final week of USF lobbying. Docket 10-90 showed no fewer than seven ex parte notices filed by cable lobbyists last week. Formulas to cap rate-of-return carriers’ operating or capital expenses “should be decided by the full Commission rather than on delegated authority at the Bureau level,” the four largest rural telecom associations told aides to FCC Chairman Julius Genachowski in a meeting last week. Rural carriers are worried that Genachowski’s intercarrier compensation regime reforms “could result in year-over-year decreases in access recovery that are not tied to costs,” said lobbyists for NTCA, the National Exchange Carrier Association, the Western Telecommunications Alliance and OPASTCO, according to an ex parte notice released Monday in docket 10-90 (http://xrl.us/bmgxa9). The rurals also urged the FCC not to consider wireless companies as “unsubsidized competitors” when excluding USF support for areas where unfunded carriers are already offering broadband.
FCC Chairman Julius Genachowski proposed a new plan to support small business cybersecurity efforts, during a speech at the U.S. Chamber of Commerce Monday. The Small Business Cyber Planner is a free online tool to help U.S. small businesses increase their cybersecurity awareness and protections, and will be available on the FCC website in “a few weeks,” Genachowski said. The Department of Homeland Security endorsed the plan and encouraged small business owners to implement strong cybersecurity policies.
Alaska’s governor said FCC Chairman Julius Genachowski didn’t seem to heed his advice to ensure that any changes to the Universal Service Fund account for his state, which has costs to deliver rural telecom and broadband that are the highest in the U.S. “Any reduction in current USF levels of support would reduce these services, increase local access charges which are already the highest in the nation and, in some cases, would likely jeopardize basic services in our most rural communities,” Sean Parnell (R) wrote last week. “I have written to you directly on several occasions and submitted official comments since USF reform was first proposed. Yet, still, it would appear that my message has not reached you and your staff.” He’s “dismayed” to hear the draft proposal the agency is considering would “slash annual USF high cost support to Alaska over the next five years by as much as 70 percent,” or up to $160 million, Parnell wrote. The USF sends Alaska about $200 million yearly, more support per line than any state, an FCC spokesman said Friday. “The current system funds multiple carriers in urban areas in Alaska, like Anchorage, yet other areas in remote areas of Alaska go unserved by broadband or mobile services. We will continue to work with all affected stakeholders in Alaska in the short-term and long-term to find fiscally responsible solutions that provide carriers in Alaska with the certainty needed -- and explicit support necessary -- to invest in broadband and mobile services to all Alaskans.” Parnell’s Oct. 17 letter was posted in docket 10-90 on Thursday (http://xrl.us/bmgpm6). Alaska cable operators like GCI and telcos have sought a separate plan for the state, as FCC members are scheduled to vote this week on a USF and intercarrier compensation order (CD Oct 20 p18).
The AT&T/T-Mobile deal, spectrum bills and controversy over possible GPS interference drove communications industry lobbying in Q3, said quarterly lobbying disclosure reports due Thursday. Most telecom, cable and Internet companies increased their spending from Q3 2011. Public safety continued its high level of spending as Congress moved closer to decide on providing money and possibly spectrum for a national network. Google continued to increase its Washington presence, spending more than T-Mobile and Sprint Nextel combined last quarter.
Wireless carriers pushing for a bigger piece of the Universal Service Fund pie through a larger Mobility Fund still likely face an uphill fight, despite advocacy by Commissioner Mignon Clyburn (CD Oct 21 p1). With several parts of the USF/intercarrier compensation order in flux, wireless industry officials said Friday the three Democratic commissioners are not united in agreeing that more money should be added to the wireless fund. Sen. Mark Warner, D-Va., on Friday separately voiced a number of objections to USF reform proposals before the FCC.
Helped by solid wireless growth, Verizon posted Q3 profit of $3.5 billion, up 31 percent year-over-year. The revamp on Universal Service Fund and intercarrier compensation would benefit some of the company’s business, but it’s still too early to tell the impact on each business unit, Chief Financial Officer Fran Shammo said Friday. Meanwhile, union workers at Verizon joined the Occupy Wall Street protest Friday over “Verizon’s corporate greed,” a move that Verizon called “misdirected outreach."
Commissioner Mignon Clyburn is pressing other FCC members to look more closely at the appropriate size of a proposed Mobility Fund as the agency completes its Universal Service Fund proceeding, her wireless aide, Louis Peraertz, told a Federal Communications Bar Association lunch Thursday. Elsewhere, aides to the four commissioners mostly talked about spectrum, with several conceding that spectrum sharing will be the trend of the future.
Telecom and consumer and states’ rights advocates were making final efforts to blunt the impact of the pending Universal Service Fund and intercarrier compensation system reforms on their interests. The FCC extended the open lobbying period to the close of business Friday. More than one critic accused FCC Chairman Julius Genachowski of being unnecessarily opaque with his intentions. “I think a lot of things are still in flux,” Free Press Political Adviser Joel Kelsey said Thursday. “The details are moving targets.” The proposed USF order is on the agenda for Thursday’s meeting.
FCC Chairman Julius Genachowski’s proposed Universal Service Fund reform proposals “understate the significant funding needs for wireless carriers,” the Rural Cellular Association wrote him, according to a Wednesday news release. RCA urged Genachowski to expand the proposed mobility fund “and not to prematurely withdraw existing high-cost support without set replacement mechanisms to prevent a gap in funding that would unnecessarily harm consumers,” the group said. President Steven Berry said in he is “extremely concerned” by the proposals in the pending order. “The future of many competitive carriers depends on USF reform, and I can only hope that the FCC’s decision in the coming days will look to the future of wireless and provide sufficient and predictable funding for mobile services."
The FCC must lower eligible telecommunications carriers’ obligations at the same time it reduces legacy high-cost universal service payments, Verizon Senior Vice President Kathleen Grillo told FCC officials, said an ex parte notice. Grillo said she spoke with Zac Katz, FCC Chairman Julius Genachowski’s top wireline aide, on Saturday, and Angela Kronenberg, wireline adviser to Commissioner Mignon Clyburn, on Monday. “The purpose of these discussions was to address the draft universal service and intercarrier compensation reform order now circulating, as well as America’s Broadband Connectivity Plan submitted by a coalition of companies, including Verizon,” Grillo said. Telcos have left meetings with FCC officials with conflicting interpretations of the contents of the agency’s pending Universal Service Fund order. Some are convinced that the FCC means to require telcos to comply with ETC requirements even if they're not receiving USF cash; others have been assured that funding will be explicitly tied to obligations, telecom officials said.