The FCC “must tackle long overdue” USF contribution reform before thinking about expanding the E-rate budget to meet the goal of spending $1 billion annually for E-rate Wi-Fi connections in schools and libraries, ITTA said in comments filed Monday in docket 13-184. “Universal service contribution rates have jumped 60 percent under the current Administration,” it said, and the commission “can no longer ignore the pressure its decisions put on the” USF. Doing so would jeopardize other agency goals, including broadband development, and would increase costs “that are ultimately borne by consumers,” ITTA said. The FCC’s $2.30-per-square-foot E-rate funding formula for libraries “would result in the inequitable distribution” of funds, said a study commissioned by the Urban Libraries Council submitted in the same docket. The study found that unlike for rural, town and most suburban libraries, square footage is not an accurate indicator of library users or Wi-Fi costs, ULC said (http://bit.ly/1qZ6GM4).
"Several concerns” worry FCC Inspector General David Hunt, he plans to tell the House Communications Subcommittee Wednesday. “The FCC has refused to allow the IG to hire criminal investigators despite the authority granted to the IG in the IG Act of 1978, as amended,” Hunt said in his pre-filed written testimony (http://1.usa.gov/1s5qnpa). “Criminal investigators are a very much needed resource at this Office, to increase its ability to conduct criminal investigations without consuming the resources of DOJ and the FBI. Further, FCC management retains a right to approve all OIG hires, a requirement which appears to contravene the IG Act and impugn the independence of the OIG.” Hunt will also criticize the FCC Enforcement Bureau’s recently formed USF strike force, referring to concerns “that efforts might be duplicative and resources wasted.” FCC Managing Director Jon Wilkins plans to testify on the agency’s attempts to overhaul its internal processes and other work, despite funding concerns. “Flat funding since 2009, despite the growth in our operational costs, has challenged the FCC’s ability to maintain current service levels,” Wilkins said in his written testimony (http://1.usa.gov/1ydmCAA). “In addition, sequestration created a gap in our budget that not only challenged the FCC’s ability to commit funds to basic programmatic needs, but also introduced budget uncertainties that made it difficult to pursue opportunities to invest in improved efficiency.” The hearing is at 10:15 a.m. in 2123 Rayburn.
The House Small Business Committee is gearing up to pepper FCC Chairman Tom Wheeler on Wednesday with a deluge of questions on a wide range of telecom and media topics, according to the 14-page GOP memo released Monday (http://1.usa.gov/1qXbzoR). It includes detailed sections about FCC history, broadband deployment and the role of NTIA; the Rural Utilities Service and USF; net neutrality; spectrum availability; and media consolidation and proposed mergers. Small Business has an FCC oversight hearing scheduled for Wednesday at 1 p.m. in 2360 Rayburn and Wheeler “will discuss among other issues, broadband deployment, Universal Service Fund (USF) reform efforts, net neutrality, wireless spectrum availability, and increasing media concentration through mergers,” the memo said. It emphasized the implications of ongoing FCC actions for small businesses. “Depending on how the FCC addresses various issues raised in the [net neutrality] NPRM, the ability of small business to utilize the Internet for their retail operations could be affected,” the memo said. “Alternatively, small telecommunications carriers that provide broadband service could find their networks over taxed with burgeoning demand and no way to manage their networks.”
The “steady increase” in the FCC USF contribution factor is “clearly disturbing and unsustainable,” said Commissioner Mike O'Rielly in a blog post Thursday (http://fcc.us/1rZpfDr). He reiterated his call for an overall budget cap on the universal service.
Sen. Mark Begich, D-Alaska, wanted FCC Chairman Tom Wheeler to see firsthand the telecom challenges of Alaska, hosting Wheeler for a visit last week. “I took Chairman Wheeler to Anchorage, Kotzebue and Kiana so that he could see how to best deliver connectivity to an urban community, a hub community and a rural village,” Begich told us in a statement. “He heard Alaskans talk about the need for better, more affordable bandwidth to improve education, medical services and to help grow businesses across the state.” Begich’s daily schedule records show visits to Kiana and Kotzebue Thursday and Anchorage the previous day, which included a meeting with General Communications Inc. and a discussion about broadband deployment. An FCC spokesman confirmed to us Friday that Wheeler was in Alaska meeting with Begich and staff to the state’s Sen. Lisa Murkowski and Rep. Don Young, both Republicans. An ex parte filing from Copper Valley Telephone Cooperative recounted a meeting Wednesday that included Wheeler and aide Patrick Halley discussing Alaska’s rural challenges with Copper Valley Chief Financial Officer Pam Murphy, Alaska Telephone Association Executive Director Christine O'Connor, Begich legislative correspondent Rafi Bortnick and Young legislative assistant Jason Suslavich. “I thanked the Chairman for his leadership in eliminating the QRA [quantile regression analysis high-cost support] model, but expressed my concern with what would replace QRA to distribute High Cost USF support,” Copper Valley CEO David Dengel wrote in the ex parte filing (http://bit.ly/1qXzW2L). “I told the Chairman that because of the elimination of the QRA, CVT is able to deploy fiber to the community of Slana this summer at a cost of approximately $650,000.” They discussed the factors any high-cost support model would have to include. “The FCC has already invested significant amounts of Universal Service Fund support in Alaska in the past several decades which has allowed for twenty first century technologies to reach hundreds of villages across the state,” Begich said. “Without this support, none of that would be possible and Alaska would be left in the dark. I showed Chairman Wheeler that we are putting these funds to good use and making a case for future investment."
The FCC should consider an overhaul for USF support in high-cost areas served by rural, rate of return-regulated local exchange carriers proposed by NTCA, Senior Vice President-Policy Michael Romano told Wireline Bureau officials Tuesday, said an ex parte filing (http://bit.ly/1nEbYbU) posted in docket 10-90 Wednesday. The reforms would create a “well-constructed transition over time away from legacy support mechanisms to a simple and straightforward new mechanism focused on supporting broadband-capable networks in high-cost areas served by smaller carriers,” the filing recounted he said.
The FCC Wireless and Wireline bureaus gave limited, interim relief to Alaska telco Adak Eagle Enterprises and its Windy City Cellular subsidiary Thursday. An order said Adak will receive $33,276 monthly and Windy City will receive $40,104 monthly. That funding will last no more than six months or until the commission reviews the companies’ petition for reconsideration (http://bit.ly/1tpZLfD). Adak and Windy City had petitioned the FCC for reconsideration of its denial of the companies’ request for a waiver of caps on USF payments (CD Aug 16/13 p5). Executives from Adak and Windy City urged FCC staff in a meeting last month to provide a “permanent solution” the funding issues they have sought to relieve through the waiver (CD July 29 p14).
House Republicans want input on the USF as part of their fifth white paper on overhauling the Communications Act. Commerce Committee Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore., issued the four-page document Friday, requesting responses by Sept. 19. “As a partnership between the federal and state governments, and funded by ratepayers, it is essential that we review and ensure the effectiveness of this $8 billion per year program as part of our #CommActUpdate process,” Upton and Walden said in a joint statement. “As technologies have been improved and networks upgraded, we have a responsibility to review the program to find out if the fund is still serving its purpose and if there may be better ways to accomplish its goals.” The paper asked eight questions about the nature of the fund and how the federal government manages the fund’s goals. It asked for input on what the proper state role should be as well as the USF’s role during and after the IP transition. “Are current programs at other federal agencies, like the National Telecommunications and Information Administration (which oversaw the Broadband Technology Opportunities Program) or the Rural Utility Service (which oversees lending programs and oversaw the Broadband Initiatives Program) necessary?” the white paper asked (http://1.usa.gov/1pmX66c). “How should our policies address the existence of multiple privately funded networks in many parts of the country that currently receive support?
The FCC Wireline Bureau asked Adak Eagle Enterprises (AEE) and subsidiary Windy City Cellular to submit additional information as the agency examines their petition seeking reconsideration of an order denying a waiver of agency caps on USF payments. The bureau denied the waiver sought by the Alaska companies a year ago (CD Aug 16 p5). The two later characterized themselves as “tiny companies that worked tirelessly against the odds” to offer phone service in the Alaskan wilderness “when no one else would” (http://bit.ly/1hcWStf). The bureau asked for “detailed information regarding, among other matters, corporate staffing, lease agreements, corporate operations expenses, and contracts for AEE’s wireline operations,” in a Tuesday letter (http://bit.ly/1ov9IZM).
USF contribution reform “should not be seen as a backdoor way of increasing the size of the universal service fund or imposing new fees on the Internet,” FCC Commissioner Mike O'Rielly said in a statement. The agency asked the Federal-State Joint Board on Universal Service Thursday to recommend how to modify contribution methodology (CD Aug. 7 p5). The commission approved the referral (http://bit.ly/1oh17cQ) unanimously. It referred the joint board to the commission’s 2012 Further Notice of Proposed Rulemaking on the issue, and asked for recommendations “with a particular focus on how any modifications to the contribution system would impact achievement of the statutory principle that there be state as well as federal mechanisms to preserve and advance universal service.” Network convergence and technological innovation “have transformed the telecommunications industry, and the contribution system has become increasingly complex and difficult to administer,” said the order, which asked for the recommendations by April 7. “The Joint Board process ensures that the agency will receive expert recommendations from the States officials closest to the consumers affected by changes to the Universal Service program,” said NARUC Telecommunications Chairman Chris Nelson in a statement. Nelson, vice chairman of the South Dakota Public Utilities Commission, is on the state board.