Alaska USF would be phased out by July 31, 2019, under a Regulatory Commission of Alaska proposal revealed in a Friday notice in docket R-18-001. The RCA proposed repealing Alaska Administrative Code Title 3 regulations on the fund, its programs and administration, plus revisions to ancillary regulations including intrastate access charge rules. Comments are due Feb. 26. Commissioners debated setting a date to terminate AUSF at hearings last year (see 1711080051).
A draft FCC order would give $500 million in new funding to cooperatives and other small rural carriers, and set "strong new rules to prevent abuse of the high-cost program," the agency said Tuesday. The item circulated by Chairman Ajit Pai to colleagues proposes changes intended to improve the high-cost USF program's "effectiveness and efficiency in promoting rural broadband deployment, including the use of a Tribal Broadband Factor to enable better access on Tribal lands," said a release. It contains a report and order, an order on reconsideration and an NPRM, an FCC official told us. An agency spokesman confirmed the tribal broadband factor proposal is in the NPRM.
FCC staff offered guidance on the Lifeline USF reimbursement process for eligible telecom carriers (ETCs), consistent with the direction the commission gave to the Universal Service Administrative Co. to devise a transition plan for phasing out Form 497. Starting "with the January 2018 data month, payment of Lifeline support for all ETCs in all states and territories (except for NLAD opt-out states) will be based on subscriber data contained in the National Lifeline Accountability Database," said a Wireline Bureau public notice in Thursday's Daily Digest. "Under the revised reimbursement process, payments will be made based on the number of subscribers enrolled with an ETC in the NLAD on the snapshot date for that month or, in NLAD opt-out states, based on data received either from the state or directly from the ETC. Further, beginning with data month January 2018, all ETCs must file their reimbursement request with USAC for subscribers being claimed for that month using USAC’s online E-File system." The PN provided further details on those filings and said the new process aligns with FCC plans to have a national entity verify consumer low-income eligibility for the program.
The Connect America Fund Phase II subsidy auction should be successful, even though questions remain about who will participate and what areas will be served, said consultant Carol Mattey, a former Wireline Bureau deputy chief, noting FCC draft CAF II items planned for a Jan. 30 vote (see 1801090050). Some areas probably won't get bids from local providers and "the extent of incumbent telco, cable and satellite participation remains a wild card," she wrote in a Benton Foundation blog Wednesday that sought to define success in the CAF II fixed-broadband reverse auction to begin July 24. "It is inevitable that some areas may have a bidder that doesn’t win, and other areas will have no bidder at all," she wrote. "The sum of the reserve prices for eligible areas is more than three times the auction budget, with bidders essentially placing bids that will result in lower and lower amounts in each successive round. Once the sum of bids equals the auction budget, the auction is likely to be largely over, with only limited bidding to resolve the remaining subset of areas where there are multiple bidders." If some areas end up with no winning bidder, she said, that doesn't mean the auction failed. "No matter what happens in the Phase II auction, it should be viewed as a success because it will help the FCC refine its thinking on how best to award USF subsidies to serve these rural areas," she wrote. The FCC in 2011 expected to have a Phase III auction by 2019 and is also eyeing a remote areas fund auction, she said, though its plans haven't been set.
Telcos pressed the FCC to act on a request for RLEC business data service deregulation. Industry officials stressed that new rules must become "effective by the end of 2018, so as to avoid model-based rate-of-return carriers having to perform highly resource-intensive cost studies for 2019," said an ITTA filing posted Wednesday in docket 17-144 on a discussion with an aide to Chairman Ajit Pai, which was joined by representatives of USTelecom, Consolidated Communications and TDS Telecom. An ITTA/USTelecom petition seeks a rulemaking to permit rate-of-return carriers receiving model-based USF support to opt into relaxed business data service regulations provided to larger, price-cap carriers (see 1708220025). The "regulatory relief sought by the Petition will help to promote the transition to IP-based networks by providing carriers incentives to invest in IP-based, Ethernet services," said the ITTA filing. "Therefore, we reiterated that it is critical that the Commission in the near term release a Notice of Proposed Rulemaking seeking comment on the petition’s proposals." The proposal faces resistance from Sprint and others (see 1707060051 and 1707070030).
The Senate passed under unanimous consent S-875 Wednesday, which would mandate that the GAO study filing requirements for the USF programs. The legislation, from Sen. Dan Sullivan, R-Alaska, would direct the GAO to in part analyze the “financial impact” of those filing requirements and provide recommendations on how to consolidate redundant filing requirements. S-875 would require the FCC, after receiving the GAO report, to initiate a rulemaking to consolidate redundant filing requirements and incorporate any GAO recommendations that would not violate the Administrative Procedure Act. The Senate Commerce Committee cleared S-875 during a June markup session (see 1706290024).
House Commerce Committee ranking member Frank Pallone, D-N.J., and Rep. Peter Welch, D-Vt., requested a GAO review Wednesday of the effects of the FCC's plan to move USF funds to the Treasury Department as early as this year. “Advancing universal service is one of the core tenants of the FCC’s mission, and any transfer should only follow close review and rigorous oversight,” Welch and Pallone said in a letter to Comptroller General Gene Dodaro. “We are concerned that the FCC seems poised to transfer the entire fund without having run a public process to assess the consequences of its action.” The GAO review should in part examine what controls the FCC has in place for the planned funding transfer and its process for analyzing potential obligations on USF that would result from the transfer. Democratic National Committee Vice Chairman Rep. Keith Ellison, D-Minn., and other House Democrats previously urged FCC Chairman Ajit Pai to reconsider the USF funds transfer plan (see 1709130058). The FCC and GAO didn't comment.
FCC Chairman Ajit Pai said he plans to circulate soon a rural high-cost USF item, which he said would explore an appropriate budget and other ways to increase program certainty. The aim is to spur broadband deployment without inviting inefficient investment or operations, he said. Pai has been making increasing noises about updating rate-of-return USF funding rules (see 1711030065 and 1712210041), but his comments in a recent letter were his most explicit yet on expected action. He responded Dec. 19 to an Oct. 30 letter from Rep. John Ratcliffe, R-Texas, who asked the FCC to address a funding "shortfall" impeding the broadband efforts of smaller rural carriers. Both letters were posted Wednesday in docket 17-18.
The FCC announced the pleading cycle on a USF Rural Health Care NPRM that commissioners adopted Dec. 14 along with an order providing some near-term relief from funding restrictions (see 1712140054). Comments are due Feb. 2, replies March 5, said a Wireline Bureau public notice in docket 17-310 Thursday after a summary of the NPRM/order was published in Wednesday's Federal Register. The FCC said Dec. 14 the notice seeks comment on "increasing the RHC Program's $400 million annual cap and creating a prioritization mechanism" if demand exceeds the cap. Commissioner Mike O'Rielly said he would be "extremely reluctant" to support an RHC budget increase absent other USF program cuts.
Universal Service Administrative Co.'s board "is fully committed to strengthening oversight and delivery of timely, reliable and secure systems needed to fully administer all aspects" of USF, said Chairman Brian Talbott in a letter the FCC posted Wednesday. He responded to a Dec. 13 letter from FCC Chairman Ajit Pai expressing concerns about USAC's information technology and security systems and seeking the board's "unqualified commitment" to bolster oversight. Pai said system problems caused delays affecting important FCC deadlines, including for a fully functioning E-rate Productivity Center and the launch of a Lifeline national verifier. USAC's board shares Pai's concerns, Talbott wrote. He said new (see 1712130018) CEO Radha Sekar has "extensive" IT experience and USAC is "actively seeking a qualified Chief Information Officer and Chief Information Security Officer" to make improvements. On information security, he said the board pledges USAC, in collaboration with the FCC, "will ensure every effort is made to deliver timely and effective compliance with all applicable rules and requirements" -- including of the 2002 Federal Information Security Management Act -- on all projects. "Security compliance will be incorporated into USAC's information systems development and design process to avoid the kinds of pitfalls that historically beset the E-rate Productivity Center and contributed to the recent delay" of the Lifeline national verifier, he wrote.