FCC Chairman Tom Wheeler has sidestepped likely partisan Capitol Hill battles surrounding E-rate for now due to the nature of his overhaul, apparently focusing on Wi-Fi and not immediately touching the fund’s contribution rate and size, lobbyists and observers told us. They predict political rancor will come in later phases of the E-rate revamp when those parts will be inevitably addressed. The prime Hill critics now are Democratic architects of the original 1996 Telecom Act E-rate provisions, who question the proposal in more granular ways and urge the agency to listen as E-rate beneficiaries express fears, sending a critical letter Tuesday. The FCC will vote on Wheeler’s item Friday, and it’s been controversial among FCC Republicans. (See separate report in this issue.)
FCC Commissioner Ajit Pai said in a statement that negotiations between his office and Chairman Tom Wheeler over E-rate broke down Tuesday, when Wheeler’s staff “rejected almost every suggestion that I made.” Wheeler’s E-rate modernization proposal could still be approved when the commission is scheduled to take it up Friday, Pai’s Chief of Staff Matthew Berry told us. But he expressed disappointment it would likely be along a party-line vote with the support of the commission’s two Democrats.
Eight libraries, including those in Hartford, Memphis, New York and Seattle, protested FCC Chairman Tom Wheeler’s proposed E-rate changes, which FCC officials said would fund libraries based on their square footage, in filings posted in docket 13-184 Wednesday and Thursday. CenturyLink protested another element of the plan to eliminate E-rate funding for voice services, arguing funding of the services is required by the Telecom Act. Under Wheeler’s draft, libraries would receive $1-per-square foot, said Reed Hundt, who represents the Urban Libraries Council, though FCC Managing Director Jon Wilkins said during a media call Tuesday (CD July 2 p2) the figure is still being negotiated. Seattle public libraries total 633,000 square feet, and the cost of delivering Wi-Fi over five years is $4 to $5 per square foot, said Seattle Public Library Director-Information Technology Jim Loter in a letter (http://bit.ly/1vBUh09). Using square footage “is unfair to urban libraries, and to our patrons who are disproportionately low-income, unemployed or underemployed. ... Wi-Fi is essential to our urban patrons,” the filing said. “If square footage is used as the basis to allocate E-rate funding for Wi-Fi, we fear urban libraries will not be adequately funded,” the New York Public Library said in a letter (http://bit.ly/1zaJdMc). While supportive of E-rate modernization, “it would be a mistake to discontinue support for voice services -- which actually are required by statute,” CenturyLink officials told aides to commissioners Ajit Pai and Michael O'Rielly on June 30, said an ex parte filing (http://bit.ly/1xmZEmG). Any reduction in voice support should be phased in over time and must apply equally to all types of voice services, including all technologies and bundled services, the telco said. Universal service support extends to the services of “telecommunications carriers” that “are supported by Federal universal service support mechanisms, the company said. “Standalone voice is among them, and in the USF/[Intercarrier Compensation] ICC Transformation Order, the Commission explained that voice, not broadband, is the USF-supported service, and it expressly required eligible telecommunications carriers to offer standalone voice service.” Wheeler’s plan calls for funding Wi-Fi connections within schools partly through eliminating funding for some services including voice, FCC officials said during the media call on the plan.
Plaintiffs who unsuccessfully contested the FCC 2011 USF/intercarrier compensation order (http://1.usa.gov/1r18uaa) (CD May 27 p1) before the 10th U.S. Circuit Court of Appeals were hurt by the sheer number of interests in the case, said attorneys involved in the case. Plaintiffs also were hindered by the court’s questionable decisions and the case’s complexity, they said Tuesday night at an FCBA continuing legal education seminar.
Mescalero Apache Telecom officials expressed concerns that the $250 per line monthly USF cap could stifle the development of basic and advanced services on the Mescalero Apache Reservation, during a June 25 meeting with officials from the telco, tribe and the Office of Native Affairs and Policy, said an ex parte filing (http://bit.ly/1wRC69k) in docket 10-90. The parties also discussed the IP transition and the possibility of appropriating $50 million of unused Connect America Funds for the Tribal Broadband Fund, said the filing posted Thursday. A draft FCC order would start tests of CAF Phase II funds for broadband experiments. (See separate report above in this issue.)
The rate-of-return regulated rural ILEC group with an FCC plan for broadband USF (CD June 25 p17, June 25 p14) includes about a dozen such companies with fewer than 10,000 access lines each, said industry officials involved with the Small Company Coalition in emails to us Tuesday and Wednesday. Some previous filings by the group hadn’t identified members of the coalition, which seeks among other things broadband access for rural and urban areas on similar conditions, rates and terms within USF budget parameters. ILEC members include Citizens Telephone of Kecksburg in Pennsylvania and Sacred Wind Communications in New Mexico. Associate coalition members include Alexicon Telecommunications Consulting, where Principal Doug Kitsch is involved with the effort, the Blooston Mordkofsky law firm and Calix Networks, which makes broadband systems, said the materials provided by Kitsch, a consultant to the group, and Jim Kail, on the coalition’s executive committee and the CEO of Pennsylvania ILECs including the Laurel Highland telco.
A decision by the Universal Service Administrative Co. against the Peerless Network was reversed by an FCC Wireline Bureau order (http://bit.ly/1pKgF7M) released in Tuesday’s Daily Digest. USAC had rejected Peerless’ revised May 2013 FCC Form 499-Q because it was filed outside the 45-day deadline for filing revisions, the order said. A request meanwhile by American Cyber Corp., Coleman Enterprises, Inmark, Lotel and Protel Advantage for reconsideration of a 2007 bureau order was granted by the bureau in an order (http://bit.ly/1q5mmPA). The bureau had found the companies were resellers of telecom services, and were obligated to contribute to the USF, but the bureau overlooked facts that showed the companies were telemarketers, not resellers, the order said.
A group of rate-of-return regulated rural local exchange carriers wants broadband access for rural and urban areas on similar conditions, rates and terms within USF budget parameters, it told the FCC. The Small Company Coalition, which has described itself as a national group of rural telecom and broadband providers (http://bit.ly/1nC5EkH), asked the agency to avoid unfunded mandates or retroactive rulemaking. It said “voice traffic will never go away completely,” as it declines at a 5-15 percent rate annually and “networks are not being used less, but instead are being used more than ever,” in an attachment (http://bit.ly/1jLisUo) to a coalition letter to the commission posted Monday in docket 10-90 (http://bit.ly/1o08FxY). “IP and bandwidth is replacing TDM and voice traffic at an alarming rate.” The coalition said its proposal would work with one from ITTA, a group of mid-sized telcos, and rate-of-return companies could choose which model works best. The coalition said it has “refined and improved” its plan after getting feedback from industry stakeholders and to reflect issues raised in the FCC Connect America Fund order (CD June 12 p7). The materials didn’t identify the members of the coalition.
FCC Chairman Tom Wheeler is trying to line up votes in favor of E-rate reform for action at the agency’s July 11 open meeting. It’s unclear whether Wheeler will be able to get Republican support for the changes, dedicating $1 billion to Wi-Fi in 2015, industry and agency officials said Tuesday. To that end, Wheeler is emphasizing that his proposal does not increase the E-rate budget, but relies on $2 billion commission staff recently found has been set aside for E-rate but never spent.
The FCC net neutrality rulemaking and recent policies are designed to provide certainty on what the commission will allow, while leaving room for case-by-case flexibility, said General Counsel Jonathan Sallet at an FCBA Continuing Legal Education (CLE) program Monday. Such rules are required to allow the commission to regulate “in a time of rapid innovation,” he said. Along with the thinking behind recent FCC rules, the event included a rundown on FCC court cases of the past year, especially the Verizon v. FCC net neutrality case and the 10th U.S. Circuit Court of Appeals decision upholding the FCC 2011 USF/intercarrier compensation order.