Rural telcos objected to the possible retroactive impact of some expense limitations apparently being considered by the FCC, or any sweeping disruption of settled cost-recovery principles. "[W]hile an October 2015 Public Notice purported to 'remind' carriers that certain expense items were ineligible for recovery via USF in 2015, then-existing rules that are still in effect today only prohibited recovery of some of the listed items," said an NTCA/WTA filing posted in docket 10-90 Thursday on a meeting with Wireline Bureau officials. "In fact, the rules in effect then and still today expressly permit recovery of several other expense categories listed in the Public Notice (or are ambiguous or internally inconsistent at best)." New limitations should be applied only prospectively, the groups said, noting they back "delineating explicit limitations with respect to the recoverability of specific expense categories" consistent with their prior filings and commissioner statements (see 1801310057). The groups also "objected to any far-ranging, open-ended language in either a new rule or order text that would attempt to recast, restate, or recharacterize decades of settled cost recovery standards and jurisprudence," they said. "[T]he focus should be on promoting clear accountability by providing very direct and plain indication of what expenses are not recoverable through USF and/or rates, rather than rewriting cost recovery policies more broadly in a way that could create, rather than dispel, confusion for small businesses and increase, rather than decrease, complicated compliance risks and burdens."
A federal-state joint board on separations probably won't agree on recommendations for overhauling the system of allocating incumbent telco costs between the federal and state jurisdictions, said FCC Commissioner Michael O'Rielly, the board chairman. He proposed a 15-year extension of a current freeze on jurisdictional separations and other targeted steps to help resolve long-term issues. State members of the panel Friday said discussions should continue.
FCC staff partially granted an Allband Communications Cooperative petition to waive a rule establishing a presumptive per-loop cap of $250 per month on total high-cost USF support. It will let the rate-of-return incumbent LEC "continue to provide voice and broadband services in parts of rural Michigan, which otherwise would go unserved," said a Wireline Bureau order Thursday in docket 10-90.
President Donald Trump urged Congress to improve broadband infrastructure, citing concerns about a lack of connectivity in 25 percent of U.S. schools and 39 percent of citizens in rural areas. “It is intolerable to continue pretending that this is the best America can offer to our students,” Trump said Wednesday in a letter accompanying the Council of Economic Advisers’ annual report. The CEA report cites investments in broadband and emerging technologies as giving workers access “job opportunities without geographic relocation,” potentially making “geographic immobility less relevant for labor force participation.” Even citizens in rural areas who do have broadband access “face a more limited choice set of service providers than their urban counterparts, and tend to adopt at lower rates,” the council said. “Access to broadband is key for modern private enterprise, and a lack of available infrastructure prevents investment in rural communities.” The CEA cited a USF revamp, loans, grants, tax incentives and changes to regulatory rules as potential tools for encouraging infrastructure deployments. The administration released last week its infrastructure legislative proposal, including a focus on streamlining the federal environmental permitting process, including for small-cells deployments. It included proposals for state block grants and federal matching funds that broadband projects could qualify for, but no dedicated broadband funding (see 1802120001).
More parties opposed an FCC plan to exclude resellers from Lifeline USF participation and voiced a mix of concerns and some support for other proposals, as dozens of additional comments posted in docket 17-287 Wednesday and Thursday. Major industry players joined consumer advocates, state regulators and others in objecting to an FCC proposal to shift Lifeline low-income support to facilities-based service. CTIA, ITTA, Mobile Future, Sprint, USTelecom and Verizon voiced resistance to the proposed exclusion of resellers. The commission should "reject proposals to condition receipt of federal Lifeline support on network build-out," said Sprint: "The modest per-subscriber subsidy, whose receipt is not guaranteed, makes the Lifeline program ill-suited as a direct mechanism to spur capital-intensive broadband deployment." USTelecom "strongly supports policies that encourage investment in broadband-capable networks," saying "the Commission should not utilize the Lifeline program to achieve a goal for which it is not designed. Instead, the Commission should focus its efforts on ensuring the successful implementation of the National Verifier, which will cure the clear majority of the issues raised in the Notice." Among others objecting to the facilities-based proposal were: NARUC; some state regulatory commissions; National Grange; NATOA and National League of Cities (here); National Urban League and others (here); New York City; Boston, Los Angeles and other cities (here); the Multicultural Media, Telecom and Internet Council and others (here); Rainbow Push Coalition's Jesse Jackson Sr. and former Rep. Dennis Kucinich, D-Ohio. ATN International backed the FCC proposal to dedicate support to facilities-based carriers, as did District of Columbia Public Service Commission Chairman Betty Ann Kane, with a caveat. Various parties opposed capping the Lifeline budget and argued for continuing to support voice-only services. There were mixed views on whether a federal Lifeline broadband provider designation should be eliminated.
The FCC approved a notice proposing rules implementing Section 7 of the Communications Act, designed to speed review of “innovative” technologies and services, over objections by Commissioners Jessica Rosenworcel and Mignon Clyburn Thursday. Chairman Ajit Pai said the goal is simple -- get out of the way of innovation. “Bureaucratic inertia” is a common barrier, he said. The agency has been taking steps on his watch to promote innovation, from approving the first LTE-unlicensed devices to approving ATSC 3.0 standards to greenlighting a power-at-a-distance wireless transmitter, Pai said: “We have stood on the side of innovation, but these are ad hoc measures.”
California may assess USF and other surcharges on text messaging, said Public Utilities Commission staff. In a Wednesday joint ruling in docket 17-06-023, Commissioner Carla Peterman and Administrative Law Judge Zita Kline sought comments on the staff determination. “The Commission has not expressly or implicitly exempted text messaging, any like service, or any cellular service provider type from the assessment of surcharges,” staff said in the attached paper. “The Commission has not, as an intrastate service, exempted texting. Neither has the California State legislature limited the Commission’s authority over this service as it did with directory listings” and VoIP providers, staff said. “No federal authority, including Congress, has classified texting as an information service or interstate only service or otherwise exempted it from the imposition of surcharges or taxes.” Text messaging is an intrastate and interstate service subject to separations, staff said. “That process necessarily includes a portion of revenue being assigned to the intrastate jurisdictions and subsequently the resulting percentage of revenues derived from it being assessed surcharges.” Comments on the staff paper are due March 23, replies March 30, Peterman and Kline said. Opening briefs for the rulemaking will be due April 13, with replies April 27, they said. Industry and consumer groups clashed on classification of text messaging -- telecom or information service -- in comments last year (see 1708220037).
FCC Chairman Ajit Pai touted a draft order to give rural telcos more than $500 million in new USF support, "including those participating in the Alternative Connect America Model (A-CAM) plan" (see 1801170048). He responded similarly this month to over 20 lawmakers who urged him to consider additional A-CAM funding, in numerous exchanges posted in docket 18-5. The draft, which includes an NPRM, "seeks public input on both further increasing support to current A-CAM recipients and on giving legacy rate-of-return carriers a new chance to elect model-based support," Pai wrote. The draft would provide about $180 million in high-cost funding to rate-of-return carriers by June 30, and up to $360 million over the next decade to A-CAM recipients (see 1801160040). Pai also cited the rural USF proposal in responding (here) to Senate Minority Leader Chuck Schumer, D-N.Y., and (here) to Sen. Chris Van Hollen, D-Md., and Rep. Andy Harris, R-Md. They had voiced concern about a Telecom Act Section 706 FCC inquiry; Pai noted the agency kept a 25/3 fixed broadband benchmark and found mobile wasn't a full substitute for fixed service. Pai cited his efforts to "shut the door on waste, fraud, and abuse" in USF programs, in an exchange with Rep. Frank Pallone, D-N.J., ranking Commerce Committee member who expressed concern about high-cost abuses. Pai also cited the backing of some Native American groups for his efforts to target higher per-subscriber tribal Lifeline support to "incentivize providers to deploy networks on rural Tribal lands and direct support to areas where it is needed most," in an exchange with Rep. Tom O'Halleran, D-Ariz., who objected to a November order "taken without any consultation with the affected tribes." Responding to other USF queries, Pai added handwritten notes to Senate Judiciary Committee Chairman Charles Grassley, R-Iowa, saying, "I love your Twitter feed! Even with the stiff competition from Senator [Orrin] Hatch [R-Utah], you're holding your own," and sending Rep. Andy Barr, R-Ky., his "condolences in advance on the [Kentucky] Wildcats impending loss to the Kansas Jayhawks during March Madness!"
The FCC E-rate USF annual budget cap will be $4.06 billion for funding year 2018 starting July 1, a 1.8 percent inflation-based increase over the $3.99 billion FY 2017 cap, said a Wireline Bureau public notice Tuesday in docket 02-6. It said the school and library discount program has been indexed for inflation since 2010. A bureau PN in docket 11-42 provided guidance on three new "universal forms" to be used for verifying and recertifying consumer eligibility for the Lifeline low-income subsidy program. The forms are intended to be used in all states and territories regardless of whether a national verifier, which is being rolled out in phases, is operational in a particular state or territory, the PN said, but if state law requires carriers to use pre-existing forms, they may use those instead of the new FCC universal forms. TracFone Wireless criticized Universal Service Administrative Co.'s updated Lifeline national verifier plan (see 1802010033) as including "processes that are unnecessarily inefficient and burdensome and that contradict" FCC goals. The plan "fails to require the use of an Automated Programming Interface to facilitate the efficient delivery of Lifeline applicant eligibility information from Lifeline service providers to the National Verifier," TracFone said. "Certain aspects of the application process ... will limit the channels through which consumers can apply for Lifeline service."
Parties opposed an FCC plan to retarget Lifeline USF to facilities-based providers and impose certain other funding restrictions, in comments being posted this week in docket 17-287 on an NPRM and notice of inquiry (see 1711160021). "This package of proposals runs the risk of harming over eight million Lifeline households and millions more eligible veterans, older Americans, and households with school-aged children,” said Olivia Wein, National Consumer Law Center attorney, in a release Wednesday highlighting NCLC comments filed with many other groups. The FCC plan "to restrict and reduce Lifeline services will cut off whole communities from these necessary connections," commented the United States Conference of Catholic Bishops, urging rejection of "proposals to radically disrupt the Lifeline program."