The FCC should focus on consumer choices in defining advanced telecom capability under Section 706 of the Telecom Act, blogged Mark Jamison, American Enterprise Institute visiting scholar and former Trump transition team member. He noted that the FCC's recent notice of inquiry on whether ATC is being adequately deployed (see 1708110034) asked how to define the broadband-like capability. "Don't customers define broadband every day? Why not simply watch what they do?" he wrote Wednesday. Most of those commenting on the NOI "will be pundits, special interests, and companies with skin in the game," he wrote. "Their self-interests will influence their input. Maybe the FCC is asking the wrong people." He said the FCC should gather data on what customers are buying and correlate it with factors such as geography, demographics and local business economics to identify problems and changing patterns; it could then do a cost-benefit analysis to craft solutions through a reverse auction of USF subsidies. Commissioner Mignon Clyburn voiced concern Aug. 8 about the NOI's desire for comment "on whether the Commission should establish a speed benchmark based on the speed tier consumers are subscribing to" (see 1708080070).
The Regulatory Commission of Alaska sought state USF comments by Sept. 20 on proposed rule changes including what to do in a USF shortage situation, a short-term effort to stem bleeding of the fund (see 1708090051). A Monday notice in docket R-17-001 listed that and other proposed changes to Alaska USF reporting and disbursement rules. The RCA separately is considering more comprehensive changes.
Industry clashed with consumer groups on classification of text messaging, in comments at the California Public Utilities Commission released Monday. Text messaging is an information service that doesn’t pay into state USF and other programs, said CTIA and the California Cable and Telecommunications Association in separate comments on a CPUC rulemaking that responded to a CTIA petition (see 1706290049). Like email, another information service, text messaging is a store-and-forward service, meaning carriers' servers store messages before delivery, CTIA commented in docket R17-06-023. Text messaging requires “extensive information processing, including protocol conversion” and allows users to retrieve data by querying electronic databases, for example when a user sends a text to a short code and receives movie listings, it said. Also, it would be unfair to assess charges to carrier-based messaging but not internet messaging services like WhatsApp and iMessage, CTIA said. Determining that text messaging isn't subject to the charges won't affect funding of the programs because the top four carriers always have treated SMS as an information service not subject to the fees, CTIA said. CCTA supported CTIA in comments, saying the CPUC also should rule that voicemail and directory listing services are information services. But the Greenlining Institute, The Utility Reform Network and the Center for Accessibility Technology said text messaging is a telecom service that should pay into the USF and other public programs. "Even though the FCC has not directly ruled on the service classification of text messaging, FCC precedent and federal law properly classify text messaging as a telecommunications service,” said the consumer groups’ joint comments. The FCC ruled in 2004 that services involving net protocol conversion aren't necessarily information services, they said. “Applying the FCC’s test in the IP-in-the-Middle proceeding, text messages are properly telecommunications services. Text messaging uses ordinary customer equipment with no enhanced functionality and texts originate and terminate on the public switched telephone network. To end users, text messaging does not undergo net protocol conversion and provides no enhanced functionality. Additionally, customers generally do not subscribe to a service separate from, or pay rates that differ from, telephone services.”
Telco officials urged the FCC to launch a rulemaking to permit rate-of-return carriers receiving model-based USF support to opt into relaxed price-cap business data service regulations. There was "only one comment substantively opposing" an ITTA/USTelecom petition for rulemaking, "and that comment was, in reality, an improper attempt to relitigate the Commission’s actions with respect to business data services for price cap carriers," said a filing posted Tuesday in docket 17-144 on a discussion ITTA, USTelecom and Consolidated Communications officials had with Wireline Bureau Chief Kris Monteith and other staffers. Sprint opposed the petition outright, though others raised concerns about some aspects of it (see 1707060051 and 1707070030). The petition "is designed to further move model-based rate-of-return carriers towards price cap regulation by removing one of the last vestiges of legacy rate-of-return regulation applicable to such carriers," the telco filing said. The officials also discussed the applicability of a BDS "competitive market test to model-based rate-of-return carriers, the need for such carriers to continue receiving [Connect America Fund-intercarrier compensation] support and for an associated exception to the 'all or nothing' rule, and the public interest rationales underlying the petition."
Frontier Communications believes large edge providers should help pay for broadband networks and correct an "imbalance" in industry, Executive Vice President Mark Nielsen said Tuesday. He said "enormous companies are earning their profits over a network that is the responsibility of challenged wireline companies" trying to keep up with consumer expectations. "It really is a heavy responsibility for us to stay on top of upgrading the network," he said. "So that's a challenge that we face as a company but I think the country is going to face in very stark terms going forward." Large edge providers should "make a contribution," he said.
The Utah Public Service Commission tweaked proposed rules but rejected delay for shifting state USF contributions to a connections-based mechanism. In a Monday notice in docket 17-R360-01, the agency accepted some language tweaks by industry suggested in recent comments (see 1708030033). But the PSC disagreed with CTIA and AT&T that the proposed connections-based mechanism may violate federal law mandating that the state mechanism not be inconsistent with, rely on or burden the federal mechanism, which is based on revenue. “The PSC has made every effort to include in the rule provisions that legally separate the UUSF surcharge from any and all interstate revenues,” it said. It said issues raised about how to assess USF fees to prepaid wireless would be addressed through a separate rulemaking or legislative action. “However, the PSC considers that implementing a per-access line surcharge cannot be delayed beyond January 1,” the agency said. “That date is mandated by statute, and is also necessary to allow the PSC to move forward on other rulemaking related to the 2017 legislation.” The amended rule may take effect Oct. 9 at the earliest, the commission said.
The Lifeline Connects Coalition (LCC) asked for reconsideration of an "alarming decision" by the Universal Service Administrative Co. "to reverse course and not provide a service provider application programming interface (API)" to an FCC-mandated national eligibility verifier for the low-income USF support program. The commission and USAC planned the API "so that applicants can seamlessly enroll in Lifeline and access the National Verifier for an eligibility determination," said an LCC filing posted Tuesday in FCC docket 11-42 on a meeting with Wireline Bureau staffers. Providing a service provider API is required by a 2016 Lifeline overhaul order, and "was decided early in the process and included in the Final National Verifier Plan, will reduce opportunities for waste, fraud and abuse and will make the National Verifier more efficient and cost-effective," the group said. The LCC also addressed "subscriber proof of eligibility" migration timing issues, its reconsideration petition on upcoming minimum service standards increases, and a recent GAO call to make Lifeline enforcement and processing improvements (see 1708150023). TracFone Wireless met with Chairman Ajit Pai to discuss Lifeline matters, including its advocacy of commission-adopted "reforms to prevent waste, fraud and abuse." The provider cited its recommendations for further actions, including to prohibit in-person handset distribution and incentive-based compensation for third-party agents. It also discussed implementation of the national verifier, concerns about minimum broadband standards and its various businesses, said a filing Monday. An attached presentation said the company has 25 million U.S. customers and is the largest U.S. prepaid no-contract provider.
NTCA again urged the FCC "to address the shortfall" in high-cost USF support "undermining" the "effectiveness of recent reforms" as "RLECs are being asked to do more with less." Lack of funding for a model-based mechanism means 71,000 rural locations will receive lower-speed broadband, "and 50,000 may see no broadband investment," said the group's filing Tuesday in docket 10-90 on a meeting with an aide to Chairman Ajit Pai. It said a shortfall of $173 million-$283 million over the next year "for cost-based USF recovery will severely harm rural American consumers and businesses in the form of higher prices, lower speeds, and reduced investment." Some 183 NTCA carriers indicated they plan to cut broadband investments over the next year by nearly $950,000, on average, the group said. NTCA said it understood Universal Service Administrative Co., as of now, will cease next year to collect for the overall high-cost USF annual budget of $4.5 billion, instead collecting only what is needs to meet "current demand," which for RLECs, "would include a budget control mechanism that artificially 'suppresses' USF support demand." The group urged the FCC to direct USAC to collect at least the $4.5 billion in support, pending completion of a budget review the agency promised a federal court. The FCC should use reserves to help fill the shortfall, NTCA said, citing USF cash balances that overall "may approach $8 billion as of year-end," including up to $2.2 billion for high-cost support, about $445 million of which is unallocated.
Four Senate Homeland Security Committee leaders urged GAO Monday to refer its May report on continued “weaknesses” in the Lifeline USF program’s management to the FCC Enforcement Bureau and Office of Inspector General “for further investigation and possible enforcement action.” Committee Chairman Ron Johnson, R-Wis., ranking member Claire McCaskill, D-Mo., Investigations Subcommittee Chairman Rob Portman, R-Ohio, and ranking member Tom Carper, D-Del., sought the additional action in a letter to Comptroller General Gene Dodaro. GAO said the Lifeline program’s management remains deficient despite FCC and Universal Service Administrative Co. efforts to improve controls over finances and enrollment by low-income consumers. The report also identified broader problems in USF contribution system oversight and the commission's use of a private bank account rather than the Treasury Department to store $9 billion in USF net assets (see 1706290037). “GAO found numerous examples of [Lifeline] program funds being used to subsidize ineligible or fraudulent subscribers,” the senators said. “Addressing systemic weaknesses in Lifeline management and oversight, along with the referral of each instance of potential fraud identified by GAO, will ensure that the waste, fraud and abuse that [the GAO] identified is eliminated.” They also sought GAO results from undercover testing of Lifeline providers. The FCC and USAC didn’t comment.
A court set oral argument for 9:30 a.m. Oct. 26 on an ILEC challenge to FCC orders that granted incumbent telcos only partial forbearance from USF service obligations. Three-judge panels reviewing a case will usually be named 30 days prior to argument, said the order (in Pacer) of the U.S. Court of Appeals for the D.C. Circuit in AT&T v. FCC, No. 15-1038, which listed USTelecom and CenturyLink as intervenors. Price-cap telco and FCC briefs last year argued the merits of commission decisions leaving carriers subject to unsubsidized legacy USF voice duties on an interim basis in areas where they don't receive new broadband-oriented Connect America Fund support (see 1607120073, 1609070029 and 1609300037).