Universal Service Administrative Co. issued its updated Lifeline national verifier plan for the FCC low-income broadband and voice subsidy program. A 2016 commission order authorized creation of a Lifeline national entity to standardize verification of consumer Lifeline eligibility, and required USAC to report on implementation progress every six months. The plan noted the FCC delayed the national verifier's (NV) Dec. 5, 2017, soft launch and March 13, 2018, hard launch target dates in six initial states to address issues about Federal Information Security Management Act (FISMA) compliance (see 1712010042). "Functional development of the service provider portal is complete and the FISMA security validation is the final step before the soft launch can occur," said the plan posted Thursday in docket 11-42. "At soft launch, service providers in the six states will be able, but not required, to use the NV system. At hard launch, service providers in the six states will be required to use the NV. Consumers in the six states will also be able to use the system at this time." The six states are Colorado, Mississippi, Montana, New Mexico, Utah and Wyoming. The plan also noted USAC and the FCC are implementing tribal Lifeline USF changes adopted in December that affect NV systems.
Citizens Against Government Waste is the name of the group that welcomed a proposal by FCC Commissioners Mignon Clyburn and Mike O'Rielly to specify rate-of-return telco expenses that couldn't be reimbursed through USF support or the rate base (see 1801310057).
The USF contribution factor could drop in Q2 from 19.5 percent to 18.3 percent of carriers' U.S. interstate and international (long-distance) telecom end-user revenue, if the revenue holds steady, said industry consultant Billy Jack Gregg's quarterly email update Wednesday. He based his estimate on the Universal Service Administrative Co.'s projection that adjusted Q2 USF demand would be $1.97 billion, $113.4 million less than Q1. "Out of period adjustments," primarily in the high-cost and school and library funds, are "the primary cause of the decrease in quarter-to-quarter USF demand," he said. If the industry revenue base stays constant, that will produce a contribution factor of 18.3 percent, but he noted that base has been trending down and a new decline would produce a higher factor. USAC's revenue base is due out by month's end, he said.
Telecom groups said the FCC should narrow its definition of "continuing violations" of rules to exclude four types of infractions. Noting a petition to reconsider a decision setting treble damages for rule violations on payments to USF and other funding programs, CTIA, Incompas, NCTA and USTelecom said the agency's definition "is inconsistent with the one-year statute of limitations for non-broadcast Notices of Apparent Liability ('NALs') contained in the Communications Act" and with court precedent. The one-year statute of limitations "is intended to create 'repose' and does not continue because the violation either has not been 'cured' or has continuing effects," said their filing Wednesday in docket 16-330 on a meeting with Enforcement Bureau Chief Rosemary Harold and other staffers. They said continuing violations shouldn't include: "(1) failure to make (or timely make) a required regulatory filing; (2) the inclusion of incorrect information in a regulatory filing; (3) failure to make (or timely make) a required [USF] or other regulatory payment; and (4) failure to return improperly received funds to the USF or other FCC funds." They noted then-Commissioner Ajit Pai voiced views "consistent with our position" in NAL dissents after their petition.
Chairman Ajit Pai proposed an NPRM on flexible rules for spectrum above 95 GHz, what the FCC calls “the outermost edge of usable spectrum,” for a vote at the Feb. 22 commissioners' meeting. That and other items on a tentative agenda Thursday were expected (see 1801310065). Pai blogged that February is “innovation month” at the agency. It would also examine rules implementing Section 7 of the Communications Act, which requires the FCC to respond to petitions or applications proposing new technologies and services within a year, and resolve petitions to reconsider USF Mobility Fund rules. Three other draft items aim to roll back "outdated and unnecessary regulations" on broadcasters, cable companies and payphone service providers, Pai said.
Cable and wireless companies cautioned the Nebraska Public Service Commission to tread carefully as it implements connections-based contribution to state USF. CTIA earlier sued the PSC in the Nebraska Court of Appeals over its decision to move to a connection-based USF contribution at an unspecified date, with CTIA’s brief due to the court Feb. 20 (see 1801170030). In Wednesday comments in docket NUSF-111 on rate design, CTIA said it’s concerned the PSC can implement an equitable, nondiscriminatory mechanism and urged Nebraska first write a strategic plan for USF before deciding the structure. Charter urged the PSC to step gradually and cautiously because possible problems with a connections-based mechanism “are still largely unknown,” saying that “the transition the Commission contemplates appears to conflict with federal law respecting the state's authority to assess VoIP and other Internet-protocol enabled services on anything other than a revenue basis.” CenturyLink urged the PSC to keep rate design simple and ensure surcharge calculations are transparent: “There is no need to create a complicated rate design with different surcharges for residential or business customers, wireless or wireline, or size of customer.” So large businesses aren't disproportionately burdened, cap the number of connections on which a businesses is assessed, it said. Securus said a contributions-based USF would exclude the inmate calling service company because it doesn't provide access lines or charge customers on an access-line or connection basis. The commission should exempt or provide an alternative method for companies like it. A coalition of rural LECs urged a hybrid approach to contributions. If the commission can't apply a connections-based method to a certain company due to technological or other barriers, require that provider to continue contributing on a revenue basis, they said.
The FCC issued an order Wednesday setting final rules for a Connect America Fund auction of USF subsidies for fixed broadband and video services in areas traditionally served by major telcos. The 48-page text resolving petitions for reconsideration was adopted 5-0 by commissioners Tuesday. They also approved 5-0 a public notice on procedures for the reverse auction scheduled to start July 24 (see 1801300032).
Sandwich Isles Communications said the FCC used "red herring arguments that fail to rebut" the carrier's mandamus request for urgent court relief ordering agency disbursement of withheld USF subsidies. Government opposition "ignores the facts and exigent circumstances that compelled" SIC's petition "and which the FCC seeks to sweep under the rug," said a company reply (in Pacer) Tuesday to the U.S. Court of Appeals for the D.C. Circuit (In re: Sandwich Isles, No. 17-1248). "The FCC seeks to confuse the Court with irrelevancies and fundamentally mischaracterizes" the relief sought, "misrepresents" commission proceedings and "ignores significant facts" on the USF amount at issue. Sandwich Isles said it wants the court to require the FCC to direct the Universal Service Administrative Co. to determine the USF amount the carrier is owed and disburse it within seven days, without which SIC "will run out of money to pay its employees, jeopardizing" telecom service for Hawaiian Home Lands native people. The FCC/DOJ urged the court to dismiss the petition as unwarranted given the commission's "ample" legal discretion to deny USF subsidies "to companies like SIC that engage in fraud, waste or abuse" (see 1801250018).
FCC Commissioners Mignon Clyburn and Mike O'Rielly jointly proposed a list of expenses that rate-of-return telcos would be excluded from recovering through USF subsidy mechanisms and their consumer rate base. They hope such personal and other nonbusiness items will be included in a pending rate-of-return draft order (see 1801160040). Two rural telco groups involved in discussion with the commissioners back the effort and hope "consensus" action will clear the way for advancing broader USF goals.
Democratic Commissioners Mignon Clyburn and Jessica Rosenworcel dissented Tuesday on an order creating a new Office of Economics and Analytics (OEA) within the FCC, which was approved 3-2 (see 1801230066). Commissioner Mike O’Rielly said the order was strengthened since it was circulated to ensure the office plays a major role in policy formation. Officials told reporters after the meeting the office likely would have under 100 staffers.