If the FCC increases from 4 Mbps to 10 Mbps the minimum broadband speeds for recipients of high-cost USF funds, 4.7 million locations would be eligible for support, said the Wireline Bureau in a public notice Wednesday (http://bit.ly/1sogvXp). That’s an increase from the 4.25 million locations eligible under the lower speed threshold, the bureau said. Some 3.6 million locations would count as “unserved” by 10 Mbps/768 kbps, compared with 2.7 million unserved by 3 Mbps/768 kbps, it said. The results were produced using version 4.1.1 of the Connect America Cost Model. Detailed results and a list of eligible census blocks are at http://fcc.us/18RrTfQ. FCC Chairman Tom Wheeler has circulated a notice of inquiry asking about increasing the minimum download speeds to 10 Mbps, for purposes of determining whether ISP services are broadband (CD June 4 p1).
FCC Commissioner Ajit Pai drew a line in the sand Wednesday: “I will not support any reform plan that boosts E-rate’s budget,” he told a packed ballroom at an FCBA luncheon. Reforms in the way the current E-rate budget is spent will make the currently allocated budget stretch further, he said. Pai also lamented what he called a partisan atmosphere at FCC headquarters. “No one party has a monopoly on wisdom,” he said.
CTIA’s top priority is spectrum “and it always will be,” new President Meredith Baker told reporters Tuesday. A former FCC commissioner and acting NTIA administrator, Baker noted that Tuesday was only her 12th day on the job since she took over from Steve Largent. CTIA will devote all the resources necessary to “successfully shift spectrum to mobile broadband use in the years to come,” she said.
The Competitive Carriers Association slammed the FCC Connect America Fund order, after it was released Tuesday night. (See related report above in this issue.) CCA President Steve Berry said in a written statement that the order is biased against wireless. “Many smaller carriers depend on USF support to provide mobile services in the most costly areas” of the U.S., he said. “Without it, they may not survive and consumers will not have wireless services in many areas. The Order does absolutely nothing to promote or even preserve competition."
More than six weeks after passage, the text of the Connect America Fund order was released Tuesday (http://bit.ly/1pl9HHQ). Many of the changes to the CAF order (CD June 9 p7) were primarily focused on responding to Commissioner Ajit Pai’s dissent, FCC officials told us. An FCC spokesman declined to comment on the internal editing process or whether substantive changes were made, but said the fact sheet given to reporters at the April meeting “accurately reflects the final draft.”
The 10th U.S. Circuit Court of Appeals decision upholding the FCC 2011 USF/intercarrier compensation order (CD May 27 p1) (http://1.usa.gov/1r18uaa) won’t have an immediate impact on state utilities commissions that had been taking administrative steps to incorporate the order in rules, particularly reductions in intrastate access rates, said officials at NARUC and several regulatory commissions in interviews. Barring an appeal and a reversal, there could be long-term ramifications, they continued to caution, by weakening the authority of state regulators, while forcing the commissions to deal with the order’s ramifications. Ohio, where Middle Point Home Telephone Co. is seeking state permission to raise residential rates by nearly a half in response to the FCC order, is an early example, said David Bergmann, a National Association of State Utility Consumer Advocates attorney on its 10th Circuit petition for review of that order. State interests or perhaps other losers have indicated an appeal is all but certain (CD May 28 p3).
Rural telcos should be OK despite a possible FCC re-definition of “broadband,” said Guggenheim Partners analyst Paul Gallant in a research note Monday. The FCC recently proposed to redefine “broadband” as 10 Mbps, up from 4 Mbps, in order to be eligible for Connect America Fund money (CD April 8 p1). “Given the tone of the Democratic majority in announcing the proposed increase, we suspect the FCC is likely to raise minimum deployment speeds from 4 to 10 Mbps,” Gallant said. That could lead to higher projected costs and a risk carriers wouldn’t accept CAF Phase II money, but “the FCC is sensitive to this risk and is likely to explore adjustments to other buildout factors” that might make it more “economically attractive” for telcos to accept CAF II payments for broadband buildout, Gallant said. Telcos like CenturyLink, Frontier Communications and Windstream are likely to accept the money, he said. They would start getting those payments in lieu of USF support around July 2015, he said. (See separate report on broadband speeds above in this issue.)
Broadband download speeds of 10 Mbps, as a draft inquiry signals the FCC wants to be the new benchmark instead of 4 Mbps (CD June 4 p1), were described by experts in interviews as sufficient for most residential Internet uses. A notice of inquiry circulating at the FCC asks about raising the benchmark to 10 Mbps, which some called the new 1 Mbps, although others questioned if the threshold needs to increase.
An April 23 FCC-approved item making much-anticipated changes to the Connect America Fund (CAF) remains stuck inside the commission and has yet to be released. FCC officials tell us that commissioners approved the order six weeks ago, but they're still fighting over edits. The order was approved over a partial dissent by Commissioner Ajit Pai and partial concurrence by Commissioner Mike O'Rielly. The order does away with the much-criticized quantile regression analysis formula and makes other tweaks to the 2011 CAF order, which was aimed at part on refocusing USF on broadband deployment (CD April 24 p2).
The FCC would bolster its statutory authority to regulate net neutrality, and help undergird the ability to parcel out USF money for broadband, by deciding for another year that Web service isn’t being sufficiently deployed, said agency and industry officials. They said in interviews last week that a negative finding over reasonable and timely deployment of broadband service in the annual Communications Act Section 706 report wouldn’t likely be required for net neutrality and USF broadband authority. That’s under last month’s 10th U.S. Circuit Court of Appeals ruling upholding FCC authority over broadband USF (CD May 27 p1) and January’s D.C. Circuit remand of net neutrality rules.