RLECs Further Contest Data on Unsubsidized Competition, Possible USF Cutoff
Rural LECs further disputed FCC data that jeopardized their USF subsidies under a rule that phases out support if carriers face unsubsidized broadband/voice competition in 100 percent of their service areas. At least nine RLECs and only one competitor had reply comments posted in the proceeding in docket 10-90 by Tuesday afternoon (Monday was the deadline). They were responding to initial comments and the commission’s public notice that preliminarily found 15 RLECs appeared to face 100 percent competitive overlap based on broadband provider Form 477 deployment filings (see 1508310052 and 1507300038). All of the RLEC commenters disputed that unsubsidized competitors served all of the locations in their territories, as required under the rule to cut off support.
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La Harpe Telephone offered the lengthiest reply comments, which it said demonstrated once again that competitor JMZ “is not actually capable of serving 100 percent of the locations within the census blocks that JMZ claims to serve within La Harpe’s Kansas study area.” Winn Telephone said the company (CMSInter.net) listed by the FCC as being its unsubsidized competitor didn't file a declaration affirming it served all customer locations in the area, and Winn said it collected evidence that the rival’s service didn’t meet FCC technical and quality standards.
Cablevision was the only competitor to file a reply, and it simply said evidence provided by Alteva (formerly Warwick Valley Telephone) that Cablevision doesn’t serve four census blocks “cannot, standing alone, serve as the basis for a determination that the study area is not 100 percent overlapped by the combination” of Cablevision and another competitor, Service Electric Cable TV. But in its reply, Alteva noted Service Electric didn’t even file initial comments explaining the extent of its service; nor did it file reply comments. Comcast, Time Warner Cable and other competitors that made initial filings didn't have replies posted as of Tuesday afternoon.
In total, 12 of the 15 RLECs disputed in initial and/or reply comments that they faced unsubsidized competition in 100 percent of their service territories: Agate Mutual Telephone Cooperative Association, Alteva, Angel Telephone, Fort Mojave Telecommunications, Gervais Telephone, Lakeland Telephone, La Harpe Telephone, Monon Telephone, Pine Tree Telephone, Smart City Telecommunications, St. Paul Telephone Association and Winn Telephone.
Three RLECs hadn't posted any comments disputing the FCC preliminary findings: Ace Telephone (now doing business as AcenTek), Ironton Telephone and Pineville Telephone. None commented to us Tuesday.
The FCC had sought input on 11 other cases where RLECs appeared to face unsubsidized competition in 99 percent of their territories. Four of those RLECs contested that they faced 100 percent or even 99 percent competitive overlap: Alteva, Richmond Telephone, Yeoman Telephone and Pulaski-White Rural Telephone Cooperative.
NTCA filed reply comments urging the FCC to take further steps to ensure the competitive review process is “at every turn data-driven and tied to a thorough analysis, consistent with the rule, as to specific locations within each study at issue.” It said the initial comments showed that relying on Form 477 data led to “false positives” -- preliminary but incorrect findings of 100 percent competitive overlap.
“There have been many questions raised for some time regarding the accuracy and granularity of self-reported broadband availability data,” NTCA Senior Vice President-Policy Michael Romano emailed us. “This latest chapter in attempting to identify where unsubsidized competition may exist underscores the very real shortcomings of using such data to make important public policy decisions in the absence of additional evidence and a ‘deeper dive’ into the actual availability of reasonably comparable voice and broadband services.” He said NTCA was “encouraged by the FCC’s efforts to look further below the surface here at the real state of affairs from the consumer’s perspective.”
A representative of an RLEC competitor told us: “I would readily agree that it’s a very high bar to prove 100 percent overlap, as a single home not being served by the unsubsidized competitor would prevent that standard from being satisfied. That suggests the FCC should have picked a somewhat lower threshold if it wanted to pursue meaningful reductions in support to areas that are already served by an unsubsidized competitor.”