Rural telcos pressed FCC officials for increased USF support and other changes to the subsidy program. Citing almost $1.5 billion in annual "unmet needs" under an "arbitrary' $2 billion rural carrier cap, the Small Company Coalition asked the FCC to tap over $8 billion in reserves to reduce contributions to the system and address the "shortfall" in funding support for small, rate-of-return carriers, in a filing posted Wednesday in docket 10-90 on meetings with Commissioner Brendan Carr and aides to Commissioners Jessica Rosenworcel and Mignon Clyburn. The SCC said Universal Service Administrative Co. audits cost about $250 million but led to only $8 million in recovery of questionable funds in 2016. It urged more focus "on demonstrably problematic programs and bad actors" and use of a "materiality" threshold. The group asked for "eliminating overlapping or outdated reporting requirements" and "raising awareness regarding the impact of shrinking" high-cost loop support.

NTCA continued to press the FCC to "remedy the shortfalls" in high-cost USF support, initiate a comprehensive budget review by year-end as contemplated by the agency, and, in the meantime, continue to collect the current overall budget amount for the high-cost program. If such collection yields USF contributions "in excess of then-current high cost USF demand," the commission should "use any such additional sums to mitigate the shortfalls in support that are being applied only to smaller rural carriers," said the RLEC group in docket 10-90 on its latest discussion with an aide to Chairman Ajit Pai (here) and a meeting with Commissioner Michael O'Rielly and an aide (here). It asked that "any high-cost USF reserves that have not already been expressly allocated" be used "to fill the budget shortfall" near term, and would welcome other potential solutions "to the ongoing support crisis."

FCC Chairman Ajit Pai acted on Puerto Rico in light of the near meltdown in communications because of Hurricane Maria, but some say there’s more the agency can do. Commissioners took about a day to approve an order (see 1710030057) making up to $76.9 million immediately available for the restoration of communications networks in Puerto Rico and the U.S. Virgin Islands. “The FCC’s actions are intended to enable carriers to restore essential communications services as quickly as possible,” said a news release.

Telcos urged the FCC to give RLEC near-term broadband relief from USF contributions, but consumer advocates said the commission should assess all broadband service in an overhaul of the system funding the subsidy program. USTelecom and NTCA noted no opposition (see 1709140052) to their petition for temporary forbearance from application of USF contribution requirements to rural carrier broadband internet transmission services until the agency settles how all broadband services should be treated. "Commenters agree that the disparate treatment amongst broadband internet access service providers when it comes to federal USF contribution assessments highlights the need for USF reform," they replied in docket 17-206 Thursday. The Eastern Rural Telecom Association also backed the petition: "To not grant temporary forbearance would mean a continuation of this discrimination of this subset of RLEC broadband customers." The National Association of State Utility Consumer Advocates noted there were only three initial comments and said it agreed with the Pennsylvania Public Utility Commission's view that contribution "reform" is needed. "All carriers’ broadband services should contribute to the USF, especially now that all the USF programs support broadband, and support for voice service is being phased out," NASUCA said. "The upcoming USF contribution factor will be 18.8% [of carrier interstate and international end-user telecom revenue], the highest ever, largely because of the low level of assessable non-broadband revenues. Rather than forbear from having the [rate-of-return] carriers contribute, the Commission should expeditiously extend the contribution requirement to all providers of broadband services." The group said RLEC relief "can't reasonably be granted, if at all" until the FCC receives a federal-state joint board recommendation.

Telcos urged the FCC to give RLEC near-term broadband relief from USF contributions, but consumer advocates said the commission should assess all broadband service in an overhaul of the system funding the subsidy program. USTelecom and NTCA noted no opposition (see 1709140052) to their petition for temporary forbearance from application of USF contribution requirements to rural carrier broadband internet transmission services until the agency settles how all broadband services should be treated. "Commenters agree that the disparate treatment amongst broadband internet access service providers when it comes to federal USF contribution assessments highlights the need for USF reform," they replied in docket 17-206 Thursday. The Eastern Rural Telecom Association also backed the petition: "To not grant temporary forbearance would mean a continuation of this discrimination of this subset of RLEC broadband customers." The National Association of State Utility Consumer Advocates noted there were only three initial comments and said it agreed with the Pennsylvania Public Utility Commission's view that contribution "reform" is needed. "All carriers’ broadband services should contribute to the USF, especially now that all the USF programs support broadband, and support for voice service is being phased out," NASUCA said. "The upcoming USF contribution factor will be 18.8% [of carrier interstate and international end-user telecom revenue], the highest ever, largely because of the low level of assessable non-broadband revenues. Rather than forbear from having the [rate-of-return] carriers contribute, the Commission should expeditiously extend the contribution requirement to all providers of broadband services." The group said RLEC relief "can't reasonably be granted, if at all" until the FCC receives a federal-state joint board recommendation.

Connections-based USF contribution in Nebraska would be more stable than a revenue-based mechanism because “connections, regardless of technology or revenue trends, are essential for telecommunications,” Windstream replied Tuesday in Nebraska Public Service Commission docket NUSF-100. The company rejected Charter arguments from last week that the PSC shouldn't overhaul its contribution method based on unproven assumptions that revenue may decline forever and that the number of wireless connections will continue to grow (see 1709210038). A Nebraska group of rural independent phone companies rejected warnings by Charter and CTIA about the move to connections. “No amount of revisionist arguments … can change the fact that remittances to the NUSF have steadily and materially declined, or … that the only means to stabilize remittances generated by the current revenue-based mechanism is to increase the surcharge percentage," the rural carriers replied. The PSC is unwilling to increase the surcharge, so contribution must change to a connections-based mechanism, they said. Charter disagreed: “There are serious obstacles to implementing a connections-based approach successfully.” The PSC lacks authority because the FCC gives states authority only over intrastate revenue, and a connections-based mechanism “by its nature is unrelated to intrastate revenue,” the cable company said. Rural carriers want to switch to avoid a cap on revenue-based surcharge, Charter said: Rural carriers support “a new methodology so [rural carriers] can argue (in a later phase) for a larger fund.” Cox, which earlier outlined its terms for changing contribution methods, clarified that it never fully supported an overhaul. Cox said it asked the PSC "to make this change be as simple as possible, [but] it doesn't negate or lessen Cox's concern with Nebraska experimenting with the implementation of a new and untested methodology.” Business customers with many lines might bear an unreasonable burden under connections-based USF if the PSC uses FCC Form 477 data, which doesn’t adequately identify high-capacity facilities, replied the Association of TeleServices International.

Industry cautioned Alaska and Nebraska regulators about their state USF revamps, in comments posted this week. At the Regulatory Commission of Alaska, AT&T and rural phone companies said a proposed short-term fix should be temporary and the RCA should launch a more comprehensive proceeding. In Nebraska, wireless carriers asked the Public Service Commission not to proceed with a proposed shift to connections-based USF contribution.

SAN DIEGO -- As states seek broadband-for-USF and funding tweaks, an FCC member was said to visit the city where state regulators are meeting, NARUC attendees told us. Commissioner Mike O’Rielly was expected to have been in San Diego on Tuesday for closed-door meetings of the federal-state joint boards on Universal Service and Jurisdictional Separations. His office didn't comment. Also at the meeting, states and electric utilities joined local governments protesting balance on FCC Chairman Ajit Pai’s Broadband Deployment Advisory Committee (BDAC).

SAN DIEGO -- As states seek broadband-for-USF and funding tweaks, an FCC member was said to visit the city where state regulators are meeting, NARUC attendees told us. Commissioner Mike O’Rielly was expected to have been in San Diego on Tuesday for closed-door meetings of the federal-state joint boards on Universal Service and Jurisdictional Separations. His office didn't comment. Also at the meeting, states and electric utilities joined local governments protesting balance on FCC Chairman Ajit Pai’s Broadband Deployment Advisory Committee (BDAC).

NTCA and USTelecom asked the FCC to give rural telcos broadband USF contribution relief while the agency seeks to revise the subsidy system's assessments of industry for funding. The commission should provide "targeted, temporary forbearance from the application of USF contribution requirements ... with respect to broadband Internet access transmission services provided by RLECs pending the completion of comprehensive USF contributions reform," they said in a petition Wednesday in docket 06-122. The groups sought the USF contribution relief for such RLEC broadband services until the commission decides whether any and all broadband services "should be required to contribute to support of federal USF programs or completes some other form of contributions reform." They said regulatory forbearance would have a "de minimis effect" on USF contributions. RLECs are being subjected to "discriminatory and anti-competitive treatment" under a 2005 wireline broadband order that allowed them to offer broadband on a common-carrier basis -- to recover costs for such service via access rates and USF -- but only if they agreed to make USF contributions, NTCA and USTelecom said. Other providers haven't been required to make USF contributions, even under the 2015 net neutrality order that reclassified broadband as a Communications Act Title II telecom service because the agency provided USF contribution forbearance, they said. A federal-state joint board is looking at USF contribution issues in an effort to make recommendations to the FCC for possible changes. The FCC, CTIA, NTCA and Public Knowledge didn't comment.