The FCC should set a goal for everyone in the U.S. to have broadband access by early 2014, major phone companies said late Monday as comments for the commission’s national plan continued arriving. There was wide agreement that overhauling the Universal Service Fund must be a high priority.
The Ad Hoc Coalition of International Telecommunications Companies received support on two proposed declaratory rulings it said are needed to end discriminatory universal service obligations imposed on international carriers and prepaid calling-card providers (CD May 8 p11). The coalition complained that international long distance companies considered de minimis providers exempt from paying USF often face indirect USF obligations resulting from pass-through charges from their underlying carriers. In comments Monday, international carriers agreed the FCC should stop such charges. The Ad Hoc Coalition also received support on its objections to an FCC rule requiring prepaid calling card providers to report revenue based on the price that the end- user pays the distributor, rather than the discounted price the distributor pays the provider. The FCC has no basis to force prepaid calling card providers to report more than actual revenue received, said iBasis, an international VoIP carrier. “In no case other than prepaid calling cards are carriers required to report revenues greater than those they actually collect.”
The FCC should reject the 12.9 percent contribution factor proposed by the Universal Service Administrative Co. for the universal service in the third quarter, said the National Association of State Utility Consumer Advocates. The new factor takes effect July 1 unless the FCC acts to modify it. In a request filed at the FCC late Tuesday, NASUCA said the FCC could reduce the factor by directing USAC to dip into $1 billion in unused USF E-rate funds, or nearly $6 billion in assets held for the federal fund. “With high unemployment levels, foreclosures across the nation and everyone’s household budgets being stretched thin, we call on the FCC to reduce the proposed hike in the Universal Service Fund’s contribution level,” said NASUCA President David Springe. “The goals of the universal service fund are extremely important, but to demand that consumers pay the highest contribution level in history is to hurt the very customers we are trying to help.”
The FCC Wireline Bureau overstepped its bounds when it required multiprotocol label switching providers to contribute to the Universal Service Fund, Sprint Nextel and other providers of MPLS services said in comments Monday on a petition by Masergy Communications. Masergy, an MPLS provider, sought clarification of a recent edit to the FCC’s form 499A characterized by the bureau as a “nonsubstantive” change. “The imposition of such an obligation is beyond the Bureau’s delegated authority,” Sprint said. “MPLS services are information services not subject to USF obligations, and the Bureau did not have the authority to determine that MPLS information service providers should be treated otherwise.” BT Americas agreed, saying “MPLS is not a type of telecommunications but is in fact a technology used to offer services that constitute information services.” But big phone companies said the FCC has already clarified it’s not requiring contributions on an information service. In separate filings, AT&T and Verizon cited an April letter (CD April 3 p15) from the FCC to the Universal Service Administrative Co., in which the bureau said companies need only pay a universal service contribution for the telecom service aspects of multi-protocol label switching. “It is clear that the addition of MPLS to the list of services that might be subject to contribution did not alter in any way the Commission’s rules and policies, or expand in any way carriers’ obligation to contribute on revenues derived from MPLS services,” AT&T said. The bureau’s letter to USAC was only somewhat enlightening, said NTT America. “In the absence of a more formal and definitive clarification issuing from the Commission itself, regulatory uncertainty will persist for Form 499 filers that may use MPLS technology in some of their service offerings.”
The Universal Service Fund is “unsustainable” in its current format, and the public should be notified about the program’s sources of revenue and spending obligations, the two top Republicans on the House Commerce Committee said in a letter Tuesday to FCC acting Chairman Michael Copps. “American consumers should not bear the burden of paying more and more to support a broken system while universal service reform languishes,” said the letter from Reps. Joe Barton of Texas and Cliff Stearns of Florida. The members asked the FCC to include in each quarterly public notice of the proposed USF contribution factor: A statement of whether any sources of revenue other than industry affected the contribution factor, and if so, the sums from each source; a summary of why the projected demand increased or decreased from the previous quarter; and a summary of why the projected industry revenue decreased or increased from the previous quarter. Barton and Stearns asked the FCC to begin providing the information with the public notice for the third quarter of 2009. If the commission declines to include it in the public notice, the congressmen asked that the FCC provide it to the Commerce Committee “no later than the date of the release of each Public Notice of a proposed contribution factor.”
The FCC sought comment on a request by TeleQuality for waiver of a Universal Service Fund rural health care program rule. Under the rule, a carrier may only receive USF money after an offset is credited against that carrier’s USF support obligations. In addition, TeleQuality asked the FCC to grant an expedited stay of a USAC decision so that it may continue to receive bi-monthly support disbursements while the FCC considers the waiver. Comments are due June 19, replies June 26.
The role regulation can and should play in promoting broadband deployment across the U.S. was a major area of contention in early comments on the FCC’s national broadband plan. Comments were still coming in at our deadline. The agency’s notice of inquiry was sweeping in approach and expected to spark a wide-ranging debate. Industry officials said Monday most comments will likely break little new ground, but the process gives the FCC a solid record on which to build its report and possibly propose future rulemakings.
An FCC report showing that the universal service high- cost fund rose to $4.5 billion in 2008 from $1.3 billion in 1997 highlights the need for change, the House Commerce Committee’s ranking member, Joe Barton of Texas, said Friday. The fund is a “bloated government program in serious need of reform,” Barton and Communications Subcommittee ranking member Cliff Stearns of Florida said in a written statement. The FCC submitted the report in response to an April request from the committee’s Democratic and Republican leaders.
Verizon is willing to discuss an FCC “fifth principle” on Internet nondiscrimination with the incoming FCC administration, Executive Vice President Tom Tauke told reporters Thursday. “We are not certain yet that there is a problem that needs to be addressed. Our primary concern is to make sure that any policy that is adopted does not disrupt” investment or interfere with consumer choice, he said.
The FCC denied a request by Virgin Islands Telephone seeking an emergency waiver of accounting rules that could reduce the company’s high-cost loop support under the Universal Service Fund. The carrier asked for relief due to recent network infrastructure damage in the Virgin Islands inflicted by Hurricane Omar (CD Dec 9 p6). But the FCC said the company, Vitelco, didn’t show it needs high-cost support “beyond what it and other similarly-situated companies are entitled to receive” under USF high-cost rules. “The relief Vitelco is seeking … is unrelated to its financial troubles caused by Hurricane Omar, Vitelco’s parent company’s bankruptcy, and general past mismanagement,” the FCC said. “The reduction in Vitelco’s high-cost loop support is due to the fact that Vitelco’s C&WF plant is fully depreciated and Vitelco has failed to invest in new facilities.” The company will be eligible for more support after investing in its plant, it said.