Telecom providers criticized a Nebraska proposal to change the state USF contribution formula from one based on revenue to a connections-based mechanism using phone numbers. In February, the Public Service Commission proposed a $1.29 surcharge for mobile voice, $1.24 for residential fixed voice and a five-tiered scheme for assessing charges to business lines. The current revenue-based contribution factor is 6.95 percent. But in testimony Friday released this week in docket NUSF-100, business line providers including Cox, Frontier and Windstream said the scheme for business lines isn't clear and may be tough to manage. For business lines, it’s not clear what revenue is to be considered in determining the surcharge -- only the business tariff rate or also extended-area-service fees and long-distance charges, Windstream said. Long-distance charges can fluctuate widely month to month, and business bundles could further complicate assessment, it said. Frontier said its billing system can't segregate or sort business customers into the five proposed tiers. Level 3 said assessing based on the number of phone numbers could hurt enterprise and government customers that have many phone numbers. CenturyLink said the business tiers are hazy and distinguishing between mobile and fixed lines for USF fees isn't equitable. CTIA said assessing different fees to mobile and fixed lines is “unreasonably discriminatory.” In other testimony, Communications Director Cullen Robbins proposed three alternative plans for contribution fees: (1) set mobile and residential voice surcharges equal at $1.29 and use two categories for businesses, single-line and multiline; (2) charge mobile and fixed the same fee and have one charge for business lines; and (3) use two categories for business -- single line and multitiered -- and treat residential fixed voice as a single-line business. "Continued declines in Nebraska Universal Service Fund (NUSF) remittances as a result of the erosion of the assessable base has led to a need to revise the contribution mechanism for the NUSF," Robbins said. A connections-based system is "more stable and predictable than the current mechanism,” he said. Some wireline companies supported the principle of assessing USF fees by connection as bringing more stability to USF. "A connection-based mechanism should be less volatile than a revenue-based mechanism, and … it should be less vulnerable to erosion of the contribution base," Windstream said. But Charter said it would be better to keep the status quo. "Moving away from this system will be complex, costly, confusing, and will likely need to be duplicated if the FCC ultimately changes the federal system,” it said. "Continuing with a revenue-based system is the most efficient, the most trusted, the most enforced and most enforceable, system yet devised. As [Winston] Churchill said: 'Democracy is the worst form of government, except for all the others.' The same can be said for revenue-based contribution systems -- at least at this time.”
Rep. Bill Johnson, R-Ohio, will be the “go-to guy” leading broadband infrastructure efforts for the House Commerce Committee and “therefore, for the Republican conference,” House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., said Tuesday before a gathering of NTCA members. “This is a guy you’re going to see a lot as we focus on broadband expansion.”
FCC Chairman Ajit Pai voiced sympathy for blocking a rural phone "rate floor" increase scheduled for July, and is committed to taking broader action to benefit rural consumers. Speaking at an NTCA legislative conference Monday, Pai said he hopes the commission can issue a fall public notice on further details of a planned Connect America Fund subsidy auction for fixed broadband services. Questioned by NTCA CEO Shirley Bloomfield, he was noncommittal about providing more FCC funding for rural telco USF mechanisms, but repeated his support for Congress including broadband through USF in any infrastructure bill.
Consumer advocates and individuals urged the FCC to undo revocation of nine Lifeline broadband provider (LBP) designations and to move forward with other actions to help low-income consumers get access to high-speed services under the USF subsidy program. Free Press received more than 13,000 comments from people protesting FCC Chairman Ajit Pai's "attacks on Lifeline and supporting the expansion of the program to broadband," it said in a release. Pai has defended the Wireline Bureau's February LBP revocation decision (see 1702070062). Free Press joined reply comments of Voices for Internet Freedom members at the commission in docket 11-42, which were due Thursday. "Another 18,000 public comments were filed by Demand Progress, a digital rights group urging the FCC to support Lifeline and close the digital divide for those who need access most," Free Press said. Most initial comments contained similar pleas, but industry representatives didn't expect the FCC to reverse the bureau decision (see 1703170035).
NTCA made its case to key FCC officials for addressing rural telco subsidy concerns. "Key universal service priorities for early 2017" include "the negative impacts of continuing" USF "budget shortfalls on the availability and affordability of broadband for consumers and businesses in rural America, the chilling impact on broadband investment of uncertainty arising out of the new capital investment allowance, and the adverse implications for rural consumers associated with escalating local voice rates pursuant to the rate floor policy," said a filing in docket 10-90 Wednesday on meetings with aides to Chairman Ajit Pai and with Commissioner Mike O'Rielly and an aide.
Lifeline providers pressed the FCC to act on their petition to reconsider looming minimum service standard changes for eligible telecom carriers (ETCs) receiving subsidies in the USF low-income support program. Upcoming increases in FCC-prescribed "family-sized portions of voice and broadband services" threaten ETC ability "to make critical Lifeline services affordable for consumers, regardless of the size of their household," said the Lifeline Connects Coalition in a filing posted Tuesday in docket 09-197 on a meeting with an aide to Commissioner Mignon Clyburn. The LCC suggested consumers "would be best served by leaving the December 2016 quantitative minimum service standards in place and letting consumers -- rather than regulators -- choose from competing ETCs for the services that best suit their needs." The LCC asked for streamlined FCC review of all Lifeline matters, given "a perpetual logjam of undecided applications for review and ETC designations, compliance plans and other transaction-related approvals" that created a "morose" climate of regulatory uncertainty threatening provider health. The coalition -- American Broadband & Telecommunications, Blue Jay Wireless, iWireless and Telrite -- said implementing "rolling recertification" should be delayed so recon issues can be considered and a national verifier implemented.
A state broadband fund proposed in Arkansas could jeopardize federal funding from the Connect America Fund Phase II, CenturyLink warned at a state House committee hearing Wednesday. The Arkansas House Advanced Communications and Information Technology Committee approved by voice vote a broadband bill (HB-2099) that would set up reverse auctions to provide support for unserved and underserved areas. The bill would require the Arkansas Economic Development Commission to establish technology-neutral rules for a broadband grant program using reverse auctions. ISPs bidding for unserved areas would have to provide at least 10 Mbps download and 1 Mbps upload speeds, and ISPs bidding for underserved areas would be required to meet the FCC definition of broadband, currently 25/3 Mbps. Funding would come from state surpluses or the governor’s quick action closing fund. State reverse auctions are “premature” and could jeopardize federal funding from CAF II, said CenturyLink Director-Government Relations Katie Burns at the hearing. “CenturyLink, along with AT&T and Windstream, have accepted those federal funds based on certain criteria. A reverse auction process would go against a lot of that criteria.” Phone companies oppose the bill because they’re receiving money from the federal government and the state USF high-cost fund, responded sponsor Rep. Stephen Meeks (R). “That helps to move the ball forward, but there are other internet service providers that don’t have access to any of those funds.” Small and medium-sized ISPs could benefit greatly from the proposed grants, he said. Meeks said the bill sets up a rulemaking process in which all providers may raise concerns, and the rules would need final sign off from the General Assembly. “Do not let fear of what might happen be the enemy of what good could happen,” he said.
Sandwich Isles Communications asked the FCC to revise a protective order in proceedings on the carrier's USF high-cost support (see 1703130068). SIC said it didn't object to the inclusion into the record of documents filed with Universal Service Administrative Co. or the commission about a USAC audit that was the subject of an FCC order requiring the company to repay $27.3 million in subsidy support for rule violations (see 1612060032). "The March 13 Order and -- to the extent that it is meant to have legal effect -- the accompanying Public Notice must be clarified because they (a) utterly fail to define the scope of materials subject to protection and seemingly involve materials that are no longer subject to the Commission’s jurisdiction, (b) establish procedures that have no meaningful application in the present situation, and (c) set up a process that makes it virtually impossible for SIC to object to the disclosure of a particular document or documents." The order "transgresses orderly procedure as mandated by the Administrative Procedure Act and the Constitution," the company said.
Questioning from House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., Tuesday focused on whether and how Congress channels broadband infrastructure funding. She asked if money should go through USF or elsewhere -- or if it should be “expanded to include a grant-making operation?” President Donald Trump pressed for a $1 trillion infrastructure package this Congress. Blackburn and others said broadband must be a part of this vehicle and debated details of legislative tools available, during Tuesday’s hearing (see 1703200067).
FCC Commissioner Mignon Clyburn said she's concerned a "poor tax" could be imposed on low-income beneficiaries of the Lifeline USF subsidy program to ensure they have "skin in the game." She also criticized the agency's Republican leadership for protecting "free data" and innovative offerings for general consumers without making similar commitments for low-income recipients and while undoing Lifeline broadband provider (LBP) designations.