States with dwindling intrastate USF revenue aren't waiting for the FCC to decide how to revamp federal contribution. The Nebraska Public Service Commission this week became the second state regulator to adopt connections-based contribution to replace a revenue-based model. A representative for small rural companies applauded and said it’s time for the FCC to act. The Utah PSC previously adopted a connections mechanism that will take effect Jan. 1 (see 1710240042). The New Mexico Public Regulation Commission may soon hold stakeholder discussions about moving to connections.
Sens. Jerry Moran, R-Kan., Pat Roberts, R-Kan., and Amy Klobuchar, D-Minn., led a letter released Wednesday urging the FCC to address high-cost USF program budget problems. Rep. Kevin Cramer, R-N.D., led House lawmakers in pressing the same issue twice this year (see 1710030074 and 1705020056). “Providers have continued to experience a significant reduction in support” from high-cost USF despite Congress' concerns, 39 senators wrote the commissioners. “While we recognize that a thoughtful long-term solution to the budget shortfall will take time and effort to identify and assess, many of the providers that serve rural consumers and businesses in our states have already begun to feel the pain of an arbitrary budget cap.” The FCC should act "as quickly as possible to ensure” high-cost USF “provides sufficient and predictable support to help deliver affordable, high-quality broadband to rural consumers,” they said: “At a minimum, we ask that you ensure that there is no reduction in funds allocated to or collected for the High-Cost program until you have reached a comprehensive solution.” The letter “highlights the continued dedication of Congress in making sure the USF mechanisms work as intended to prioritize consumers and close the digital divide for rural communities,” said NTCA CEO Shirley Bloomfield. The FCC didn't comment. The Schools, Health & Libraries Broadband (SHLB) Coalition and 35 healthcare providers and telehealth networks sent a letter Wednesday to House Commerce Committee leaders asking them to back a funding increase in the FCC's Rural Health Care Telecommunications Program, which they said was "facing an unprecedented crisis" after applications exceeding a budget cap for both FY 2016 and 2017. "This shortage has resulted in health providers canceling or downgrading broadband connections and reducing services to the public. Several telehealth networks put their plans to expand into rural markets on hold due to the uncertainty around future funding," said an SHLB release. “This is a life and death issue for Rural America,” said John Windhausen, SHLB executive director.
Puerto Rico ISP Open Mobile says hurricane-disrupted service could be fully restored to its 250,000 customers across the island by year's end, as long as electricity is similarly restored. "Nothing could prepare us for what happened," said OM Advertising Manager Ricardo Hernandez. He called Hurricane Irma, which preceded Maria, "like a dress rehearsal" that had OM working on restoring towers.
Citizens Against Government Waste lobbied FCC Republicans on "Restoring Internet Freedom" in recent meetings. CAGW officials urged Commissioners Mike O'Rielly and Brendan Carr and aides to undo Title II net neutrality regulation under the Communications Act, indicated filings (here, here) posted Tuesday in docket 17-108. They also discussed Lifeline USF, use of TV white spaces, vehicle-to-vehicle communications in the 5.9 GHz band and 5G issues, testimony and letters. CAGW made a similar presentation to Chairman Ajit Pai and an aide on Oct. 18. Verizon urged O'Rielly aides in a Thursday meeting to ensure a "national, light touch" broadband framework that isn't undermined by conflicting state and local regulation, a pitch it made recently to Pai advisers (see 1710190057). Also recently, ADT suggested the FCC use Title I ancillary authority to write net neutrality rules protecting alarm-monitoring companies. Akamai asked the FCC to "expressly clarify" that content delivery network services "differ from paid prioritization" by localizing traffic through data storage near users "in a way that is both neutral and reduces overall congestion," said a filing on a meeting with Wireline Bureau Chief Kris Monteith and others.
Rural telcos said FCC constraints are "ravaging" their ability to meet broadband needs. "Budget control mechanism 'haircuts' -- now in the 12-to-15 percent range and apparently increasing to 19-to-20 percent or so in 2018 -- are the primary current factor disrupting the predictability and sufficiency" of "critical high-cost support revenue streams," said a WTA filing Friday in docket 10-90 on meetings it and members had with Wireline Bureau officials. "Growing shortfalls are making it extremely hard to undertake broadband extensions and upgrades and obtain the loans needed to finance them; forcing cutbacks in staffing, maintenance and service operations; and making it difficult to repay existing broadband construction loans." They urged "the current high-cost support budget for Rate-of-Return carriers be increased, and that relief be provided from the burgeoning budget control mechanism 'haircuts' ravaging RoR Path RLECs." The FCC should address "issues teed up for reconsideration or further action in connection with high-cost [USF] reforms, including a recommended, readily available path toward helping to mitigate the pervasive insufficiency of USF support and greater prospective confirmation as to the eligibility of certain expenses for cost recovery," said an NTCA filing on a meeting with an aide to Commissioner Mike O'Rielly.
FCC commissioners approved temporary rules providing immediate relief to schools and libraries contending with “devastation” caused by Harvey, Irma and Maria. It makes "available targeted support to schools and libraries that are forced to rebuild facilities and replace equipment damaged by the Hurricanes, and provide increased flexibility for eligible services to be restored through service substitutions,” said a Monday order in docket 02-6. “We also make additional E-rate support available for schools that are incurring additional costs for eligible services, e.g., for increased bandwidth demand, because they are serving students that have been displaced by the storms, even though they may not be contending with substantial physical damage.” The storms together caused an estimated $150 billion-$200 billion in damage to areas of Texas, Florida and Georgia “and to virtually all of Puerto Rico and the United States Virgin Islands,” the agency said. Commissioner Mike O’Rielly said the FCC should work with Congress to determine whether the USF programs could be reimbursed through funding targeted to hurricane relief. “Because of our budget limitations, providing additional funding from universal service generally comes at the expense of other recipients,” O’Rielly said.
Large telcos and others urged the FCC to complete an intercarrier compensation move to bill-and-keep arrangements under which carriers don't charge each other for exchanging traffic, and speed the transition to IP-based networks. Rural telcos urged a more cautious approach and further FCC action only after addressing USF subsidy "shortfalls." Comments were posted Thursday and Friday in docket 01-92 on a public notice seeking to refresh the record as a lengthy phaseout of many terminating charges continues under a 2011 overhaul.
NARUC blasted the FCC for rejecting what the agency termed the “blunderbuss approach” of the Minnesota Public Utilities Commission applying state regulations to Charter Communications’ fixed interconnected VoIP service (see 1710270053). In an amicus brief Friday at the 8th U.S. Circuit Court of Appeals, the FCC said allowing Minnesota to regulate VoIP would disrupt the market, stifle competition and hurt consumers. The federal agency again declined to say if it's a telecom or information service. But its statement could have big impact in the case and on the broader question of whether states can regulate such services, observers said.
An FCC draft item would begin an overhaul of the Lifeline USF program subsidizing providers of broadband and voice service to low-income consumers. Three orders would aim to crack down on "waste, fraud and abuse" and two notices would propose to adopt an annual funding cap and seek ways to better target support to those most in need. They would also target funding to facilities-based providers, not resellers. The actions and proposals were contained in a combined draft that Chairman Ajit Pai put on the tentative agenda Thursday for the Nov. 16 commissioners' meeting (see 1710260049).
The Senate Commerce Committee's main telecom policy priority for the remainder of this year is likely to be an amplified focus on broadband infrastructure issues before the long-anticipated release of a White House-backed infrastructure legislative package expected to include a broadband title, lawmakers and lobbyists told us. Other telecom-related issues also could command the committee's attention depending on a range of other factors, including advancement of the Stop Enabling Sex Traffickers Act (SESTA), they said. The committee remains unlikely to take up FCC reauthorization legislation even if the House is able to pass its own version this year, lobbyists said.