Net neutrality was just one of many topics before the Senate Appropriations Financial Services Subcommittee during a Tuesday hearing, which featured FCC Chairman Tom Wheeler and Republican Commissioner Ajit Pai. Senators focused on USF overhaul issues just as lawmakers in the House and Senate pushed for stand-alone broadband support, as expected (see 1504210033). Subcommittee Chairman John Boozman, R-Ark., told us after the hearing that his two big concerns with the FCC's FY 2016 budget request, an increase of about $50 million over its current budget, remain “the moving expense” associated with the FCC’s headquarters relocation and the FCC’s use of $25 million from the USF for administrative purposes.
Changes to the FCC’s E-rate program have worked, as evidenced by the level of interest being shown by schools and libraries, FCC Chairman Tom Wheeler said Monday in a blog post. Changes to the USF program “will only have their intended impact if schools and libraries step up to take advantage of new opportunities,” he said. “Early indications are that they are up to the challenge.” Applications are in for E-rate funding for the coming school year and schools and libraries have asked for a total of $3.9 billion in support, including more than $1.6 billion for internal Wi-Fi networks, he said. “These requests reflect long pent-up demand,” he said. “It is the first time in three years that E-rate has had any funds available for Wi-Fi at all. In the past, many schools and libraries didn't bother to apply for Wi-Fi funding because they had no hope of getting funds. That is no longer a problem.”
The FCC rejected the requests by Alaskan telco Adak Eagle Enterprises and subsidiary Windy City Cellular for a waiver of its universal service funding caps. In a 14-page order approved 5-0, commissioners found AEE/WCC provided "no basis" for relief despite arguments WCC could go bankrupt without more support. In a 2012 order, the Wireline and Wireless bureaus found AEE/WCC had unjustified costs and denied their waiver from a $250/line monthly high-cost support cap imposed under the 2011 USF/intercarrier compensation reform order, though it granted a temporary extension of their previous interim monthly support levels of $33,276 and $40,104 to give the companies time to adjust and avoid service disruptions. AEE/WCC filed a petition for reconsideration and application of review in 2013 seeking above-cap support levels, triggering a lengthy FCC revenue proceeding during which further temporary extensions of interim support were granted. In Thursday's denial, the full commission found AEE/WCC "continued to have excessive and unreasonable expenses." The commission upheld a bureau finding that WCC was not the only voice provider on a significant portion of Adak Island due to the presence of GCI, an alternative provider. It said AEE and GCI provide voice support to those areas of Adak Island where the vast majority of people live. The commission disputed AEE/WCC's contention that the bureau determination was based on promises of future service, concluding that it was based on "current and actual" service. The FCC acknowledged AEE/WCC's claim that without further support it could discontinue service at one cell site, causing some consumers to lose coverage in that area, but it said some trade-offs were needed to ensure USF support was used "efficiently" to expand overall national coverage to as many people as possible. "It is not a guarantee of support ... for every cell site," the order said. The agency acknowledged AEE/WCC's warning that WCC could go bankrupt without higher support, but said it couldn't justify a waiver based on such a threat. Commissioners Mignon Clyburn and Mike O'Rielly issued a joint statement recognizing that "serious questions remain" despite the extensive record, but said that without "sufficient answers" the agency could not provide a waiver. "Rather than prolong this already lengthy inquiry, it is important to provide a response," they said. "We are very mindful of the potential impact on residents of Adak, but there is no evidence that they are at risk of losing access to communications services." A lawyer for the company had no immediate comment.
Frontier Communications has invested nearly $100 million in its Pennsylvania operations since 2011, including approximately $20.5 million in 2014, bringing broadband to all its customers in the state, said a Thursday news release. In 2015, Frontier is positioned to receive funding from the FCC, the company said. The program is poised to open in the latter half of the year and will provide funds over a six-year period, Frontier said. The telco would get as much as $1.7 billion over the program under Phase II of the USF Connect America Fund (see 1504290066).
Comcast names Ana Salas Siegel, ex-21st Century Fox, general counsel, NBCUniversal’s Hispanic Enterprises and Content, effective June 1 ... National Emergency Number Association hires Christopher Blake Carver, ex-New York City Fire Department, as PSAP (public safety answering point) operations director ... Georgetown Center for Business and Public Policy hires Ralph Everett, ex-Joint Center for Political and Economic Studies, as senior industry and innovation fellow working on USF, broadband and other technology issues ... F5 Networks hires Kristen Roby Dimlow, ex-Microsoft, to lead global human resources organization as executive vice president ... LogRhythm, cybersecurity company, hires James Carder, ex-Mayo Clinic, as chief information security officer and vice president, LogRhythm Labs ... USTelecom names Robert Hunt, GVTC, board chairman, succeeding CenturyLink Executive Vice President Steve Davis, who retired and is being succeeded on the board by the telco's John Jones, who succeeded Davis at the company (see 1504020030).
Indiana's governor this week signed telecom tax legislation into law that increases the statewide 911 fee for a standard user from 91 cents to $1 per month and the prepaid wireless charge from 50 cents to $1 per transaction, the Indiana General Assembly's website said. The law also says the statewide 911 board may increase the enhanced prepaid wireless charge and the statewide 911 fee only one time after June 30 this year and before July 1, 2020. It establishes a $1 enhanced prepaid wireless charge, a $1 statewide 911 fee, and payment schedules for providers that are designated as eligible telecom carriers for purposes of receiving reimbursement from the USF. The law authorizes the board to audit wireless service providers on an annual basis to determine compliance with statewide 911 laws. Beginning with FY 2016, it requires the 911 board to ensure a distribution of statewide 911 fees to each county in an amount equal to that distributed to the county in FY 2014.
FCC Commissioner Mike O’Rielly assured the WTA spring meeting Tuesday that he will make finishing “the remaining pieces” of USF reform, especially those related to the Connect America Fund for rate-of-return carriers, a top priority. “Everything else that the Commission may want to do with universal service -- make service more affordable for low-income consumers, wire schools and libraries, and connect rural health care facilities -- depends on having … infrastructure in place,” O’Rielly said in written remarks. “I have been dismayed by the haphazard approach that the Commission has taken to USF reforms, ratcheting up spending and expected broadband speeds while leaving millions of Americans unserved.” The FCC’s two E-rate orders expanded the program but offered little actual reform, O’Rielly said. The first order “just tacked on new spending for Wi-Fi within facilities regardless of whether they need the additional capacity or have adequate bandwidth to the building,” he said: The second “made it easier for entities to build their own fiber networks with no meaningful checks or limits to ensure that the funding will be targeted to truly unserved areas or used cost-effectively.” The FCC increased the E-rate cap by another $1.5 billion per year, he said. “At the time, there were assurances that we would not actually reach the new cap for several years,” he said. “But the window just closed, and I suspect that we may be very close to if not already at the new cap.” WTA members are already paying a price for so-called USF reform, he charged. “Without proper notice, the Commission decided that you will have to bid to provide service at rates to be determined at a later date as part of your Connect America Fund obligations,” he said. “Because that task was delegated to the [Wireline] Bureau, I won’t even get a chance to weigh in on their decisions.”
FCC Chairman Tom Wheeler will come to Capitol Hill for his seventh hearing of the year next week, this time before Senate appropriators. The leadership of the Senate Appropriations Financial Services Subcommittee told us they plan to bring Wheeler for a hearing May 12, both expecting net neutrality to come up in some form. But Senate Commerce Committee Chairman John Thune, R-S.D., is trying to ward off GOP appropriators from tackling the FCC’s net neutrality order through the funding process.
The FCC said it may fine Simple Network $100,000 for "allegedly providing interstate telecommunications services without registering with the FCC through the Universal Service Administrative Company." The company's alleged registration failure allowed it to avoid making payments that support federal programs, including the USF, potentially creating higher fees for others that do register, said an FCC release and an Enforcement Bureau notice of apparent liability Monday.
The Supreme Court said it won't hear appeals of the 10th U.S. Circuit Court of Appeals’ decision a year ago upholding the FCC’s requirement that USF recipients provide broadband. Industry officials said the decision was a big positive for the FCC because if the court agreed to hear the case it would have meant many months of uncertainty for the FCC’s landmark November 2011 order “modernizing” USF and the intercarrier compensation regime. The Monday court order also shifted the fund to support broadband as well as traditional voice service.