E-rate USF subsidies for school and library voice services plunged under an FCC shift to broadband support that includes a four-year phaseout of voice support ordered in 2014, said a Wireline Bureau report in Tuesday's Daily Digest. It said voice discounts were $708 million (34 percent) of $2.1 billion of total E-rate funding in funding year 2014 but dropped to $259 million (10 percent) of $2.5 billion in FY 2016. Applicants seeking voice support dropped from 24,575 in FY 2014 to 18,884 in FY 2016, "though most of the applicants who no longer apply for voice services continue to seek E-rate support for other services," said the report, which stemmed from the 2014 order. "If the Commission takes no further action after the Bureau issues this report, the phasedown will continue until no funding is available for voice services in funding year 2019." NTCA and TDS (see 1703030013) asked the FCC to keep E-rate voice discounts; T-Mobile urged the commission to carefully consider requests to reconsider the voice phaseout (see 1708090044).
Reps. Kevin Cramer, R-N.D., and Collin Peterson, D-Minn., led a letter from 37 House members that urged the FCC to do a review of the High Cost USF program budget and proposed an interim change aimed at mitigating current budget constraints before a review. The letter follows up on concerns lawmakers raised in May about USF (see 1705020056). “We strongly urge you to maintain level collections from telecommunications companies into the future” before the review or High Cost USF budget adjustments, the lawmakers wrote to FCC Chairman Ajit Pai. “To the extent that the collected sum exceeds High-Cost USF spending obligations at the time, the FCC should directly apply funds to help mitigate or neutralize the budget constraints applied to these smaller, rural operators.” It's “currently unclear” how excess funds “may be obligated under existing budget instructions,” but “their continued collection has the potential to help provide rural communities with comparable broadband services for comparable rates relative to urban areas,” the lawmakers said. “In doing so, the country will move closer to the fund's stated mission.” NTCA CEO Shirley Bloomfield praised the missive.
Fight for the Future launched a campaign Tuesday targeting the four Senate Democrats who voted Monday in favor of FCC Chairman Ajit Pai's reconfirmation. The Senate confirmed Pai on a 52-41 vote, prompting reaction that divided sharply between supporters and opponents of the FCC's 2015 net neutrality rules (see 1710020062 and 1710030064). All four Democrats -- Joe Manchin of West Virginia, Claire McCaskill of Missouri, Gary Peters of Michigan and Jon Tester of Montana -- previously told us they were leaning toward confirming Pai (see 1709280056). Manchin and Peters separately told reporters they were impressed by Pai's focus on increasing rural broadband deployment. “I just need a lot of help in West Virginia, and he’s been moving in that direction,” Manchin said. Pai has been “very receptive to ways to expand broadband access” in Michigan's Upper Peninsula region, Peters said. Manchin and Peters noted ongoing concerns with Pai's bid to rescind 2015 net neutrality rules, which figured prominently in other Senate Democrats' floor speeches opposing the chairman (see 1709150060). Peters said he will now work to “hold [Pai] accountable” on net neutrality. McCaskill and Tester previously cited work with Pai on policy issues like oversight of the Lifeline USF program as a reason to reconfirm him. FFTF tweeted that the four Democrats “voted for an FCC chairman that wants to allow Internet censorship, throttling, and extra fees” and urged the group's supporters to call the senators' offices.
Puerto Rican telco and media industry groups paint a grim picture of communications on the island after Hurricane Maria, with indications full resumption could be a long way off. Some said the FCC's information collection system continues (see 1709270061) struggling. Chairman Ajit Pai is proposing that carriers in Puerto Rico and the U.S. Virgin Islands be allowed quicker use of their USF allocations for network rebuilding.
WTA voiced concern about apparent FCC plans to transfer to the U.S. Treasury USF money currently managed by the Universal Service Administrative Co. "WTA wondered why there has not yet been commenced a formal rulemaking wherein the proposed transfer plans and revised USF administration procedures and rules could be reviewed, analyzed and commented upon," said its filings (here, here) Monday in docket 05-195 on meetings with aides to Chairman Ajit Pai and Commissioner Mignon Clyburn. It cited questions and concerns, including: How would Treasury involvement "reduce risk" and "ensure continued strong financial management" by interposing a new group of Treasury offices and employees between collection and distribution functions performed by USAC since 1999? Who will distribute moneys for the high-cost, Lifeline, E-rate and rural healthcare mechanisms -- USAC or Treasury? WTA is "very concerned" about some statements in a GAO report (see 1706290037) "that appears to have initiated or accelerated the apparent transfer plans," it said. "WTA is concerned about the increased levels of unpredictability likely to be injected into USF administration and revenue streams by the contemplated transfer to Treasury. WTA members and other [RLECs] must employ 10-to-30-year loans to extend and upgrade their broadband networks, and will not be able to obtain or repay such loans if their critical USF revenue streams are periodically disrupted or otherwise become uncertain." The FCC didn't comment.
The Senate reconfirmed FCC Chairman Ajit Pai Monday (see our bulletin 1710020030), and as expected 1709280056), on a 52-41 vote. Four Democrats voted for Pai: Sens. Joe Manchin, W.Va.; Claire McCaskill, Mo.; Gary Peters, Mich.; and Jon Tester, Mont. The final vote followed a floor debate in which Senate Republicans strongly backed Pai and Democrats criticized the chairman for his proposed rescission of 2015 net neutrality rules, Sinclair's proposed buy of Tribune and other controversial policy matters (see 1709150060). Pai's new term lasts until June 30, 2021.
Telcos urged the FCC to give RLEC near-term broadband relief from USF contributions, but consumer advocates said the commission should assess all broadband service in an overhaul of the system funding the subsidy program. USTelecom and NTCA noted no opposition (see 1709140052) to their petition for temporary forbearance from application of USF contribution requirements to rural carrier broadband internet transmission services until the agency settles how all broadband services should be treated. "Commenters agree that the disparate treatment amongst broadband internet access service providers when it comes to federal USF contribution assessments highlights the need for USF reform," they replied in docket 17-206 Thursday. The Eastern Rural Telecom Association also backed the petition: "To not grant temporary forbearance would mean a continuation of this discrimination of this subset of RLEC broadband customers." The National Association of State Utility Consumer Advocates noted there were only three initial comments and said it agreed with the Pennsylvania Public Utility Commission's view that contribution "reform" is needed. "All carriers’ broadband services should contribute to the USF, especially now that all the USF programs support broadband, and support for voice service is being phased out," NASUCA said. "The upcoming USF contribution factor will be 18.8% [of carrier interstate and international end-user telecom revenue], the highest ever, largely because of the low level of assessable non-broadband revenues. Rather than forbear from having the [rate-of-return] carriers contribute, the Commission should expeditiously extend the contribution requirement to all providers of broadband services." The group said RLEC relief "can't reasonably be granted, if at all" until the FCC receives a federal-state joint board recommendation.
The Senate invoked cloture Thursday on FCC Chairman Ajit Pai's reconfirmation 55-41. It begins a long-expected floor debate in which Democrats strongly criticized the commission's proposed rescission of 2015 net neutrality rules, Sinclair's proposed buy of Tribune and other controversial policy matters (see 1709150060). Forty-nine Senate Republicans and six Democrats voted in favor of invoking cloture on the Pai debate, confirming expectations the Democratic caucus wouldn't be fully unified. At least four of those Democrats told us they are planning to support Pai again when a final confirmation vote occurs Monday.
Connections-based USF contribution in Nebraska would be more stable than a revenue-based mechanism because “connections, regardless of technology or revenue trends, are essential for telecommunications,” Windstream replied Tuesday in Nebraska Public Service Commission docket NUSF-100. The company rejected Charter arguments from last week that the PSC shouldn't overhaul its contribution method based on unproven assumptions that revenue may decline forever and that the number of wireless connections will continue to grow (see 1709210038). A Nebraska group of rural independent phone companies rejected warnings by Charter and CTIA about the move to connections. “No amount of revisionist arguments … can change the fact that remittances to the NUSF have steadily and materially declined, or … that the only means to stabilize remittances generated by the current revenue-based mechanism is to increase the surcharge percentage," the rural carriers replied. The PSC is unwilling to increase the surcharge, so contribution must change to a connections-based mechanism, they said. Charter disagreed: “There are serious obstacles to implementing a connections-based approach successfully.” The PSC lacks authority because the FCC gives states authority only over intrastate revenue, and a connections-based mechanism “by its nature is unrelated to intrastate revenue,” the cable company said. Rural carriers want to switch to avoid a cap on revenue-based surcharge, Charter said: Rural carriers support “a new methodology so [rural carriers] can argue (in a later phase) for a larger fund.” Cox, which earlier outlined its terms for changing contribution methods, clarified that it never fully supported an overhaul. Cox said it asked the PSC "to make this change be as simple as possible, [but] it doesn't negate or lessen Cox's concern with Nebraska experimenting with the implementation of a new and untested methodology.” Business customers with many lines might bear an unreasonable burden under connections-based USF if the PSC uses FCC Form 477 data, which doesn’t adequately identify high-capacity facilities, replied the Association of TeleServices International.
Commissioners Mignon Clyburn and Jessica Rosenworcel slammed the 2017 version of the FCC’s mobile wireless competition report, approved 3-2 Tuesday in a party-line vote. Both questioned whether wireless in parts of the U.S. is genuinely competitive. During the Obama administration, the FCC repeatedly declined to determine there's effective competition in the U.S. wireless market. The new report says there is. The disagreement was expected and has been a topic of contention between Republicans and Democrats (see 1709220049).