The White House included provisions on school and rural broadband, spectrum license fees, the FCC’s USF and more in its proposed $3.9 trillion 2015 budget, partially revealed Tuesday in a 218-page document and requiring the approval of Congress (http://1.usa.gov/1c5yFWg). It would include a $56 billion Opportunity, Growth, and Security Initiative, which promises funding toward various goals in this sphere. The administration will roll out its budget in two phases, the first of which started Tuesday, and then post some other parts a week later. Congressional Republicans have already complained of the broader details.
The Independent Telephone and Telecommunications Alliance proposed an alternative regulatory framework for rate-of-return companies, in a filing Thursday (http://bit.ly/1gHLzHh). The voluntary plan would address “some of the concerns associated with eventually moving to model-based support by providing stability, certainty, and an adequate transition period,” ITTA said. In Phase I of the two-phase plan, USF support would be frozen at current levels while participants continue to implement intercarrier compensation (ICC) rate reductions pursuant to the framework in the 2011 USF/ICC Order. They would then move to a price cap-like structure with respect to regulation of rates for special access service. In Phase II, which would begin after the Connect America Cost Model has been modified “to reflect the unique circumstances of [rate-of-return] companies,” participants would accept model-based support and assume service and public interest obligations, in the same way as price cap carriers under CAF Phase II, ITTA said. “We think it’s a noteworthy proposal that should move the industry forward,” ITTA President Genny Morelli told us. “We're hopeful that others will feel the same way.” The primary benefit of the plan is “knowledge of your revenues,” said Trey Judy, director-regulatory at the Hargray Communications Group. “We get stability of revenues, we know the revenues that we will be able to count on to build out broadband,” he said. The plan will also make it a more feasible and easier process to acquire funding, Judy said. Western Telecommunications Alliance Vice President-Government Affairs Derrick Owens said he’s sending ITTA’s proposed plan to his policy committee and plans to discuss it with the committee early next week. “I know I have some companies who are interested in model-based support” or are thinking about what would happen,” Owens told us. But “right now the model that’s out there -- the CAF Phase II model -- doesn’t work for rate of return carriers, and so we're going to take a close look at what ITTA proposed.” CAF Phase II doesn’t work because “the inputs just don’t line up with the actual costs for rate-of-return carriers,” he said. “Any type of model that doesn’t focus on actual costs is difficult for us to accept.” From what Owens has seen from the ITTA proposal, “it at least puts something out there that we can talk to our members about,” he said.
The FCC is seeking proposals to bring advanced services to rural America, said Alexander Minard, Wireless Bureau Telecommunications Access Policy Division acting deputy chief. Non-binding expressions of interest are due March 7, and it’s “not really a high threshold,” to apply Minard said at an FCBA brown-bag lunch Thursday. “We want to see who raises their hand."
Broadband services should be required to begin contributing to the USF, a NARUC official told the FCC. Vermont Commissioner and past NARUC Telecom Committee Chairman John Burke told aides to FCC Chairman Tom Wheeler and Commissioner Jessica Rosenworcel that a NARUC resolution (http://bit.ly/1hTQPNr) passed at its winter meetings calls for expanding the USF contribution base (CD Feb 12 p9). The expansion would include “all communications services, including services such as broadband that are required to be offered in order to receive federal support,” wrote Burke in an ex parte filing posted Tuesday to docket 09-191 (http://bit.ly/1lm0U6j). NARUC didn’t take a position on whether the size of the fund should be increased.
The FCC should ensure no barriers exist in states’ ability to acquire data to investigate rural call completion issues, and there should be no obstacles to the ability of states to coordinate investigations with other states, the National Association of State Utility Consumer Advocates (NASUCA) said in a reply (http://bit.ly/MYEx8C) to a Nov. 8 FCC Further NPRM (http://bit.ly/1k7cjXc) on rural call completion. NASUCA echoed comments by NARUC (http://bit.ly/1jxcecz) that the FCC should codify prohibitions on blocking, choking or restricting traffic, even as appeals of the USF reform order are pending at the 10th U.S. Circuit Court of Appeals. NASUCA also said intermediate providers should register and certify they will follow industry standards, as well as state and FCC rules, and that no additional safe harbors reducing obligations to collect and retain data should be created. NASUCA objected to Verizon’s reply (http://bit.ly/1mF9j68), which backed adjusting safe-harbor reporting requirements to exempt minimal volumes of traffic for overflow purposes, and to increase the number of intermediate carriers allowed to be used under the safe-harbor provision from one to two. “Verizon’s complaints about ’the already high burdens of complying with the Order’ overlook the tremendous burdens placed on consumers by call completion failures,” NASUCA said. “Requirements that ease consumers’ burdens by preventing call completion failures are reasonable solutions to this industry-created problem.” The FCC November order applied recording, retention, and reporting requirements to large long-distance voice providers, defined as those that make the initial long-distance call path choice for more than 100,000 domestic retail subscriber lines.
The FCC’s proposed reduction in USF rate-of-return support “would negatively impact Big Bend’s operations at a time when the impacts of USF-[intercarrier compensation] reforms are still being implemented and the full impacts are not known,” the Texas telco told officials from several commissioners’ offices and the Wireline Bureau last week, an ex parte filing said (http://bit.ly/1ghtkKO). The bureau’s May staff report recommended reducing the rate of return to between 8.06 and 8.72 percent; that would be “a threat to financial stability” and would harm Big Bend’s ability to get new loans to build out broadband, the telco said. “Service and customers in rural, remote, and high-cost areas like Big Bend’s service area will suffer due to lack of ability to maintain and invest in new network.”
Newest FCC Commissioner Mike O'Rielly took to the official agency blog Wednesday to share his thoughts on E-rate changes (http://fcc.us/1nwynre). There’s widespread agreement that the program is “due for an overhaul,” and O'Rielly supports that effort, he said, with six provisos: E-rate “must not increase costs on consumers” by increasing USF contributions; it “must be offset by reductions elsewhere” within the fund. E-rate “must be refocused on broadband access.” E-rate matching requirements must be consistent with other federal programs; the current local match of as little as 10 percent is “much lower” than other federal programs and “can distort decision making,” O'Rielly said. E-rate funding must leverage private sector networks, “not overbuild them.” E-rate funding “must not over supply,” but rather give schools flexibility to “choose the speeds that best meet their needs.” Finally, O'Rielly said, E-rate program administration must be revised. “By streamlining processes, requiring productive oversight, and providing significant outreach, we can make school participation in E-Rate easier, stretch program dollars, and ultimately benefit more students.”
A resolution urging the FCC to expand the kinds of services whose customers are required to pay into the USF (CD Feb 11 p15) was among six approved unanimously by the NARUC board at the end of the organization’s winter meeting Wednesday. The resolution, proposed by Vermont Public Service Board Commissioner John Burke, urges the FCC to expand the USF contribution base “so that all communications services, including services such as broadband that are required to be offered in order to receive federal support, contribute to USF.” The resolution took no position on whether the size of the fund should be increased. Another resolution, by Michigan Public Service Commissioner Sally Talberg, supports efforts by the FCC to allow a variety of service providers to apply for rural broadband experiments. The resolution also asked the FCC to ensure that funds for the experiments be aimed at ensuring broadband service for rural areas, and that broadband networks deployed in rural areas remain sustainable. A third resolution, by Nebraska Public Service commissioners Tim Schram and Anne Boyle, said the FCC should clarify that rules on 911 location accuracy apply to calls made from both indoors and outdoors. A resolution by Washington Utilities and Transportation Commissioner Philip Jones expressed support and encouragement to the National Association of Public Affairs Networks to establish C-SPAN-like public affairs TV networks in all 50 states. A resolution by District of Columbia Public Service Commissioner Betty Ann Kane urges the FCC to require applicants for the upcoming IP tests to prominently provide information to customers on how to submit complaints to state regulatory agencies or the FCC. Kane’s resolution also asks the FCC to require applicants requesting a waiver of a mandatory condition from the FCC to notify state regulatory commissions and customers. It also asks the FCC to provide adequate opportunity for public comment before granting a waiver.
The FCC should begin making customers of non-wireline services, including broadband, contribute to the USF, some panelists said at NARUC’s winter committee meetings. But NCTA Vice President-State Government Affairs Rick Cimerman said taxing broadband is the wrong approach if a goal is to expand broadband.
NARUC staff approved five telecom-related resolutions Sunday. One offered by Vermont Commissioner John Burke asks the FCC to expand the USF contribution base, “so that all communications services, including services such as broadband that are required to be offered in order to receive federal support, contribute to USF.” Another by Commissioner Sally Talberg, of Michigan, supports efforts by the FCC to allow a variety of service providers to apply for rural broadband experiments. The resolution also urged the FCC to ensure the funds for the experiments not only be aimed at ensuring broadband service for rural areas, but also that broadband networks deployed in rural areas remain sustainable. A third resolution, by Nebraska Commissioners Tim Schram and Anne Boyle, asked the FCC to clarify that rules on 911 accuracy apply both indoors and outdoors. A resolution by Commissioner Philip Jones of Washington state expressed support and encouragement to the National Association of Public Affairs Networks to establish C-SPAN-like networks in all 50 states. Another resolution by South Dakota Commissioner Chris Nelson thanked Jim McConnaughey for his public service. He retired last month as NTIA chief economist.