The latest numbers emerging as the FCC pushes forward on an order addressing Lifeline funding reveal sharp growth in the cost of the Universal Service Fund program. Lifeline spending was up sharply in Q4 2011, ending in September, to $525 million, but it remains unclear whether that number is an anomaly or means real, across the board growth in the Lifeline program. Meanwhile, a senior FCC official said Chairman Julius Genachowski is committed to putting in place significant controls on the size of Lifeline program, which are projected to save $2 billion over a period of years versus the status quo.
Almost three months after the FCC approved a Universal Service Fund/intercarrier compensation reform plan, major industry players continue to seek significant changes. Comments were due last week on a further rulemaking notice approved as part of the order. How USF dollars ultimately will be divided as the fund is reconfigured to primarily pay for broadband is the key question addressed in most filings. They show that the FCC still has a huge job ahead as it continues to tackle changes to the USF. Numerous petitions for reconsideration have been filed in response to the Oct. 27 order. A second round of comments focusing on intercarrier compensation issues is due Feb. 24. Next week, the commission will begin to tackle Lifeline reform. Also looming are likely changes to the contribution side of USF.
Rural telecom associations want more, not less support to deploy broadband, said joint comments filed Wednesday by OPASTCO, the National Exchange Carrier Association, NTCA and Western Telecom Alliance. FCC efforts so far on Universal Service Fund and intercarrier compensation mechanisms for rural LECs “have consisted entirely of caps, cuts and phase-outs to cost recovery components,” they said. At minimum, they said the FCC should provide USF support for standalone broadband, middle-mile costs and conversions to IP-enabled switching.
Wireless carrier NTCH said the FCC should consolidate the phase I and phase II Mobility Funds into a single support process. The suggestion came in comments filed at the FCC in reaction to a further rulemaking notice on the Universal Service Fund (http://xrl.us/bmo6cc). The carrier previously raised the issue in a petition for reconsideration of the USF reform order. “It is unclear why the Commission opted to split the funding for mobility operations and support into two distinct phases,” NTCH said. “Looked at holistically, any service provider assessing the viability of constructing a telecommunications system in an underserved area and providing service there for the long term would need to know both how much USF support is available at the outset and how much will be available for operating expenses.”
The FCC should “take all necessary regulatory and policy measures” to “bring parity of broadband technology and service to Native communities,” the National Tribal Telecommunications Association (NTTA) said in comments responding to a rulemaking notice on Universal Service Fund high-cost loop support. NTTA said tribal communities “have high unemployment, high poverty, and large numbers of low income customers.” Among its members, 86 percent of the Gila River Tribe’s subscribers are Low Income Program customers, as are 72 percent of Hopi subscribers and 60 percent of San Carlos Apache’s subscribers, the group said (http://xrl.us/bmo5xq). NTTA understands the growing pressures on the USF, but native areas present problems the FCC must address, the filing said. “Native peoples reside in the worst connected communities in America for both broadband and for basic voice dial tone,” it said. “The Commission needs to honor both its Communications Act and its trust responsibility to provide parity of technology and service to Native communities."
CenturyLink tried to distance itself from services offered by MeetingOne. MeetingOne has asked the FCC to review a Wireline Bureau order that found MeetingOne’s audio bridging is a telecommunications service that ought to be subject to Universal Service Fund reporting and contribution rules. “CenturyLink takes no position here as to whether the Bureau’s conclusions regarding MeetingOne’s service are correct,” the company said. But CenturyLink takes issue with MeetingOne’s claim that MeetingOne’s offering is less similar to a telecom service than that offered by Qwest’s IPTF and IPLD services, which support MeetingOne’s audio bridges, CenturyLink said in comments published at docket 06-122 (http://xrl.us/bmon8c). MeetingOne made its claims “without any legal analysis or supporting authority” and its statements are not only “incorrect” but also “irrelevant,” CenturyLink said. “The Commission therefore is precluded from going beyond the Bureau’s findings to consider contribution obligations pertaining to Qwest’s services,” CenturyLink said. The FCC could help things out if it weighed contribution questions “for complex IP technologies ... prospectively” and in broader, rulemaking proceedings rather than in a “piecemeal manner,” CenturyLink added. “Given the checkerboard of determinations regarding the regulatory treatment of IP-enabled services, the USF contribution obligations of new and complex IP-based services seldom are clear,” CenturyLink said. CenturyLink owns the former Qwest operation.
Rural telcos have asked the White House to help save them from newly passed Universal Service Fund reforms. NARUC, meanwhile, decided to join the court challenge against October’s FCC USF reforms (CD Oct 28 p1), a state official told us.
Native Americans became the first parties to oppose petitions to reconsider last fall’s universal service reforms, the record on docket 10-90 showed. The National Congress of American Indians and Navajo telecom regulators filed separate, but similarly worded, briefs to oppose RLEC’s request for exemption of some of the new rules’ guidelines for deploying broadband in tribal areas (CD Oct 28 p1).
FCC Chairman Julius Genachowski should overhaul the Universal Service Fund’s Lifeline program “only if such reform translates as eliminating the USF altogether,” said Heartland Institute scholar Bruce Edward Walker Tuesday. The draft Lifeline reform order, expected to have circulated late Tuesday, has been met with some ambivalence (CD Jan 10 p1). Late Tuesday, the commission said a Lifeline and Link Up reform order and rulemaking notice is tentatively scheduled for a vote at the Jan. 31 meeting. Walker meanwhile said universal service has reached “97 percent of the population, a fact reported in the Federal Communications Commission’s own research that seems to elude the chairman.” Customers are already paying too much in USF fees, Walker said. “Government fees account for 15 percent of customers’ regular service charges on average, which is more than double the sales tax levied in most states. Additionally, 59 cents of each USF dollar collected from users’ bills isn’t appropriated to build out and connections but to cover the administrative costs of perpetuating a completely unnecessary bureaucracy."
Civil rights and “digital divide” erasure advocates gave mixed reviews to FCC Chairman Julius Genachowski’s Lifeline reform proposals Monday. As expected (CD Jan 9 p7), Genachowski promised what he called “cost controls” and “a budget” for Lifeline and Link-Up, with most of his efforts focused on rooting out some 200,000 duplicate claims and building a database to prevent future “waste.” The draft order will circulate Tuesday, Genachowski said.