The Regulatory Commission of Alaska agreed to ask stakeholders if the state USF is fulfilling statutory goals after supporting a short-term fix to Alaska USF addressing what to do in a shortage situation. At a Wednesday meeting, commissioners voted 4-1 for the short-term measure and 4-1 to seek comment on broader USF questions. Under the short-term item, the Alaska USF administrator would distribute funds first for administrative costs, then the Lifeline program, then other universal service programs with oldest claims first and “pro-rated among claimants within a monthly accounting period based on the total unpaid claims for that period.” Except for claims before the effective date, the administrator wouldn’t pay claims that remain unpaid more than six months after accrual, it said. Commissioner Jan Wilson voted no on the short-term measure because she objects to the commission not fully funding USF by adopting a surcharge less than what was requested, she said. It should be fully funded until the fund size is reduced, she said. The long-term item seeks comment on several questions by Commissioner Rebecca Pauli, who previously backed setting a date to terminate AUSF and come up with a replacement (see 1710250022). Pauli asked if universal intrastate interexchange service, regardless of technology, is provided at reasonable rates throughout the state. If not, Pauli wants more details and an assessment of how to get there, she said. Chairman Stephen McAlpine voted no on the long-term proposal, saying, “Sometimes it’s more important that you make a decision than is the decision that you make.”
FCC Chairman Ajit Pai said "more fundamental reforms" are needed to shore up USF support for rural telcos, despite a 2016 overhaul designed to boost broadband. "I wish I could tell you that the FCC has fixed this problem," Pai wrote in a recent letter responding to Rep. Mike Bost, R-Ill., and other lawmakers. "I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment." Citing the complexity of funding controls, Pai said rural carriers under the legacy rate-of-return system lack certainty needed for long-term investment to improve connectivity. "I am committed to exploring how this situation can be changed and to determine the appropriate budget levels," he wrote. "The Commission should address the uncertainty caused by the current budget control mechanism -- such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning -- while being mindful of mitigating incentives to operate inefficiently."
FCC Chairman Ajit Pai said the hurricane devastation in Puerto Rico is "unimaginable," and more funds may be necessary. He concluded a two-day trip Monday during which he met with government and industry officials. The recovery path has challenges, "most notably the lack of power and functional infrastructure," he said Tuesday. "I’m heartened by the dedication of our public safety community to the people of Puerto Rico." He said everybody is pitching in: the people of territory, its Telecommunications Regulatory Board, Federal Emergency Management Agency staffers and native and Public Safety Bureau's Roberto Mussenden. "Amateur radio operators, broadcasters, cable operators, fixed wireless companies, wireline carriers, and mobile providers have stepped up to the plate, working overtime," Pai said. "Recovering ... requires an all-hands-on-deck effort. The FCC remains committed to doing everything we can to help restore communications networks." Noting the FCC's $77 million in advanced USF support, he said he believed more funding would be needed.
Ajit Pai’s first 10-plus months as FCC chairman featured contentious public interactions with congressional Democrats and favorable treatment from Republicans. Democratic lawmakers we spoke with insisted their animus overwhelmingly involves the FCC’s policy agenda. At the agency itself, Pai oversees many split votes as he pursues his deregulatory agenda (see 1711070024 and 1711050001).
The Louisiana Public Service Commission granted AT&T’s request to exit the state Lifeline program in all ILEC service areas except those in Connect America Fund II census blocks, in an order released Friday. In its petition to relinquish status as an eligible telecom carrier, AT&T said the number of Louisiana Lifeline customers declined 92 percent from 2008 to 2016 and the company now serves less than 1 percent of state Lifeline subscribers. AT&T is exiting Lifeline programs in several states due to increased competition and recent changes to the federal USF program (see 1705020049).
Alaska Communications (ACS) and General Communications (GCI) proposed separate plans to address USF rural healthcare (RHC) funding. ACS urged the FCC to alleviate the "crisis" while crafting a long-term plan to "right size" the annual budget, which the telco believes should be hiked from $400 million to $800 million. As a "stop gap measure," it suggested in a filing posted Monday in docket 02-60, the agency could tap "headroom" in the $2.279 billion Lifeline low-income budget to meet growing RHC demand, or tap undisbursed E-rate school and library funding. ACS proposed a rulemaking to increase RHC funding as if the $400 million budget adopted in 1997 was adjusted annually for inflation and start indexing it for inflation. Rival GCI called for a "stable, long-term" RHC budgetary solution, citing pro-rata budgetary reductions for rural healthcare providers (HCPs) in extremely high-cost areas as creating "unmanageable uncertainty." It said the FCC decision in funding year 2016 to allow HCPs in remote Alaska to reduce charges by pro-rata reduction amounts is unsustainable. GCI agreed the RHC cap should increase to reflect inflation since 2017, but said "other measures may also be necessary." It proposed prioritizing payments to “Highly Rural” HCPs while increasing their minimum payment requirement in the Telecommunications Program (one piece of RHC support), said a filing on a meeting with an aide to Chairman Ajit Pai.
The FCC concluded no rural telcos faced unsubsidized competition throughout their areas despite preliminary findings that 13 RLECs "potentially" were subject to complete competitive overlap that would trigger a phaseout of high-cost USF support (see 1708110049). Filed comments and replies (see 1710110024) "did not provide evidence to confirm that any of the 13 study areas preliminarily identified were in fact 100 percent served by unsubsidized broadband competitors," said a Wireline Bureau public notice Thursday in docket 10-90. "Therefore, we find that none of the study areas in our list meets the 100 percent overlap requirements." The bureau said it would do a new biennial review in 2019.
The FCC “should address the uncertainty caused by the current budget control mechanism” for the High-Cost USF program through actions like “guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning” while also “being mindful of mitigating incentives to operate inefficiently,” said FCC Chairman Ajit Pai in letters to 37 House lawmakers released Friday. Reps. Kevin Cramer, R-N.D., and Collin Peterson, D-Minn., led a letter from the lawmakers last month that urged the FCC to do a review of the program budget and proposed an interim change aimed at mitigating current budget constraints before a review (see 1710030074). The lawmakers raised similar concerns in May (see 1705020056). Pai bemoaned the FCC's 2016 rate-of-return order for not having “its intended effect,” noting his own opposition to the rule. “I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment,” he said. “This is unfortunate but unsurprising.” More “fundamental reforms are needed” to address the “punch list of lingering issues” from the 2016 order, Pai said. Until that revamp happens, “I am committed to exploring how this situation can be changed and to determine the appropriate budget levels,” Pai said.
Expect lively debate about Lifeline at the NARUC annual meeting Nov. 11-15 in Baltimore, said Telecom Committee members and staff in interviews. In separate NARUC telecom draft resolutions, Nebraska Public Service Commissioner Crystal Rhoades and District of Columbia PSC Chairman Betty Ann Kane disagreed whether Lifeline should support reseller services (see 1710310051). The conflict is likely to be the “hot item” at the NARUC meeting and already is spurring discussion and lobbying, said NARUC Telecommunications Staff Subcommittee Chair Lynn Notarianni, from the Colorado Public Utilities Commission. A less contentious draft resolution aims to show a united front by states in favor of requiring direct dialing of 911 in hotels and other enterprises, said Colorado PUC Commissioner Wendy Moser.
Sprint asked the U.S. Supreme Court to review a lower court ruling that federal law doesn't pre-empt state authority to regulate non-nomadic, intrastate long-distance VoIP calls (see 1706230047). Sprint said under FCC precedent the VoIP traffic "is an 'information service' exempt from traditional common carrier regulation," whether state or federal. The 8th U.S. Circuit Court of Appeals in June -- agreeing with a 1990 9th Circuit California v. FCC ruling -- contradicted "clear FCC policy," said a Sprint cert petition this week in Sprint Communications v. Richard W. Lozier, Jr., et al. "The court below thereby both broadened and deepened the conflict, breathing new life into what had been an outlying and outdated Ninth Circuit decision." The 8th Circuit affirmed a U.S. district court ruling siding with an Iowa Utilities Board decision requiring Sprint to pay intrastate access fees to Windstream for VoIP service. Sprint said the 8th Circuit said Windstream's state tariffs apply to the VoIP calls, even if they are an information service because an enhanced service provider exemption doesn't apply. "That holding conflicts with decades of FCC decisions establishing federal policy to the contrary," said Sprint, citing actions going back to a 1980 Computer II finding by the FCC that enhanced services weren't subject to common-carrier regulation. NARUC General Counsel Brad Ramsay said the Sprint petition was wrong on the facts and the law. "The FCC in order after order for 13 years has been adamant that it has not classified VoIP as either an information service or a telecommunications service," he said. "So of course this entire petition is based on the 'fact' that facilities based VoIP service is an information service -- the one legal issue the FCC insists it has not decided." He said "states, both with and without FCC concurrence, regulate some aspects of VoIP services -- imposing USF and emergency calling fees and requirements that Congress specified (and the DC Circuit confirmed in the Verizon case) can only apply to the extent a carrier is providing a 'telecommunications service.'" The FCC didn't comment Thursday. “Windstream is not surprised by Sprint’s cert filing with the US Supreme Court since Sprint appears to be intent on endless litigation in this matter,” said Deputy General Counsel Carol Keith via statement.