RLECs, Rivals Dispute Extent of Unsubsidized Competition in Rural Areas
Various rural LECs disputed preliminary FCC findings that they face 100 percent overlap from unsubsidized broadband/voice competitors, which if they do, will lead to their high-cost USF support being phased out under commission rules. Cable companies and other RLEC rivals said they were providing overlapping competition in a number of areas. NTCA, which represents many RLECs, urged the commission to require the competitors to provide specific evidence beyond assertions of previously reported deployment data submitted by broadband providers on Form 477.
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The parties were responding to a Wireline Bureau public notice seeking comment on its preliminary findings that 15 rate-of-return RLECs faced 100 percent overlap from unsubsidized competitors and could collectively lose almost $9 million in annual USF support if the findings are finalized (see 1507300038). To count, unsubsidized competitors must provide 10/1 Mbps fixed broadband and fixed voice services to 100 percent of the census blocks in an RLEC study (coverage) area. Initial comments were due Friday, but some were still being posted on Monday in docket 10-90. Replies are due Sept. 28.
At least 10 of the 15 RLECs disputed the preliminary findings: Agate Mutual Telephone Cooperative Association, Angel Telephone, Fort Mojave Telecommunications, Gervais Telephone, Lakeland Telephone, La Harpe Telephone, Monon Telephone, Pine Tree Telephone, Smart City Telecommunications and St. Paul Telephone Association. All but Agate and Fort Mojave faced filings in recent days from competitors saying they provided unsubsidized competition. Competitors making filings included Bright House Networks, Comcast, JMZ, RCN Telecom Services, Time Warner Cable and WaveDivision Holdings.
For instance, Comcast said it provided broadband service that satisfies FCC performance standards in each census block of four bureau-identified study areas served by Lakefield Telephone, Monon Telephone, Pine Tree Telephone and Smart City Telecommunications. Although Comcast said it didn't claim to offer broadband to every location within those Census blocks, it noted the bureau had recognized competitors filing Form 477s could truthfully certify they were offering service in a particular block even if they didn't provide service to every location in that block. But the list of study areas with 100 percent competitive overlap can't be finalized without the FCC knowing whether unsubsidized competitors are offering required fixed broadband and voice services “to all locations within the blocks reported on Form 477 and which overlap the study area,” the bureau noted in its July 29 public notice.
TWC said it confirmed it provided 10/1 Mbps to 100 percent of a study area served by Pineville Telephone, which apparently didn't file and didn't respond to our query. TWC said it couldn't confirm it served 100 percent of two other study areas served by Pine Tree Telephone and Lakefield Telephone. But the operator said it served the “overwhelming majority” of those areas and suggested the commission may be able to determine that 100 percent of the areas are served when TWC’s footprint is combined with those of other unsubsidized competitors.
Pine Tree Telephone said it inspected portions of its territory and found more than 40 locations where TWC didn't have necessary plant, and said it believed it would find more locations not served by either TWC or Comcast if it did more inspections. Pine Tree asked to be removed from the list of RLECs facing unsubsidized competition. Lakefield Telephone said it had 307 census blocks in its study area, with 301 allegedly served by Mercury Network, 31 by Comcast and 23 by TWC. But in a "non-exhaustive search," Lakefield said Mercury’s own website showed it couldn't serve at least 22 of the locations where it is Lakefield’s only supposed competitor, and Lakefield also asked to be removed from the list. Smart City Telecommunications submitted evidence that it said showed it didn't face 100 percent overlap, and it also urged the bureau to reconsider its methodology for making such determinations.
NTCA said it appreciates FCC/bureau efforts to determine whether unsubsidized competition was present in some rural study areas. “Certain reasonable showings remain necessary, however, even within the context of this evolved process to confirm that, in fact, consumers do have and will continue to have access to reasonably comparable voice and broadband services at reasonably comparable rates in areas where competitors operate,” NTCA said. "Without such showings, the risk of 'false positives' persists, contrary to the statutory mandate of universal service and to the ultimate detriment of rural consumers who could find themselves stranded without any effective prospect -- competitive or at all -- to obtain quality and reliable broadband or voice services in rural areas.”