FCC Chairman Ajit Pai said he plans to circulate soon a rural high-cost USF item, which he said would explore an appropriate budget and other ways to increase program certainty. The aim is to spur broadband deployment without inviting inefficient investment or operations, he said. Pai has been making increasing noises about updating rate-of-return USF funding rules (see 1711030065 and 1712210041), but his comments in a recent letter were his most explicit yet on expected action. He responded Dec. 19 to an Oct. 30 letter from Rep. John Ratcliffe, R-Texas, who asked the FCC to address a funding "shortfall" impeding the broadband efforts of smaller rural carriers. Both letters were posted Wednesday in docket 17-18.

Hughes Network Systems urged the FCC to go easy on performance-measurement duties in a planned Connect America Fund Phase II reverse auction of USF support for fixed broadband services in traditional ILEC areas where incumbents declined CAF II offers. Such obligations would impose burdens that fall hardest on smaller winning bidders, said the Hughes response Wednesday to a public notice in docket 10-90 (see 1711060055). The FCC should leverage existing programs, including Measuring Broadband America, but if it does impose a new requirement, it should select a "software approach where the software resides on the operators' modems," said Hughes, which earlier made broader CAF II auction arguments. Several parties lobbied FCC rural broadband auctions task force members in filings this week. The Wireless ISP Association pressed the staffers not to require potential bidders using spectrum to submit propagation maps for the census block groups they're eying. Such applicants should demonstrate due diligence in applications, but the mapping requirement "would be impractical, unfair and inefficient," said WISPA, which also criticized a proposed financial screen and backed census block groups (CBGs) as the geographic bidding unit. A rural coalition of power companies and NTCA urged the FCC to simplify the auction, arguing that procedural complexity, particularly package bidding, could deter small provider participation. But officials from USTelecom, AT&T, CenturyLink, Consolidated Communications, Frontier Communications, Verizon and Windstream defended package bidding, which they said allows participants "to plan efficient network deployment" across CBGs. They said their analysis suggests packages of up to 25 CBGs are "likely to provide sufficient opportunity to reap network build and operating efficiencies to yield bids" consistent with the FCC's goal of ensuring competitive prices and broad coverage. They also said the ability of bidders "to change performance tiers between rounds appeared to contribute more to views that the auction is unnecessarily complex than to the needs of existing broadband providers."

Hughes Network Systems urged the FCC to go easy on performance-measurement duties in a planned Connect America Fund Phase II reverse auction of USF support for fixed broadband services in traditional ILEC areas where incumbents declined CAF II offers. Such obligations would impose burdens that fall hardest on smaller winning bidders, said the Hughes response Wednesday to a public notice in docket 10-90 (see 1711060055). The FCC should leverage existing programs, including Measuring Broadband America, but if it does impose a new requirement, it should select a "software approach where the software resides on the operators' modems," said Hughes, which earlier made broader CAF II auction arguments. Several parties lobbied FCC rural broadband auctions task force members in filings this week. The Wireless ISP Association pressed the staffers not to require potential bidders using spectrum to submit propagation maps for the census block groups they're eying. Such applicants should demonstrate due diligence in applications, but the mapping requirement "would be impractical, unfair and inefficient," said WISPA, which also criticized a proposed financial screen and backed census block groups (CBGs) as the geographic bidding unit. A rural coalition of power companies and NTCA urged the FCC to simplify the auction, arguing that procedural complexity, particularly package bidding, could deter small provider participation. But officials from USTelecom, AT&T, CenturyLink, Consolidated Communications, Frontier Communications, Verizon and Windstream defended package bidding, which they said allows participants "to plan efficient network deployment" across CBGs. They said their analysis suggests packages of up to 25 CBGs are "likely to provide sufficient opportunity to reap network build and operating efficiencies to yield bids" consistent with the FCC's goal of ensuring competitive prices and broad coverage. They also said the ability of bidders "to change performance tiers between rounds appeared to contribute more to views that the auction is unnecessarily complex than to the needs of existing broadband providers."

The Colorado Public Utilities Commission must do all it can to close the rural broadband gap, a member said Thursday at a livestreamed information meeting on the state’s USF high-cost support mechanism. State broadband officials said limited funding makes it tough to spread broadband. Supporting municipal broadband efforts and phasing out high-cost support for traditional phone service could be ways forward, consumer advocates said. PUC staff pointed to continued decline in USF contributions due to changing technology.

The Colorado Public Utilities Commission must do all it can to close the rural broadband gap, a member said Thursday at a livestreamed information meeting on the state’s USF high-cost support mechanism. State broadband officials said limited funding makes it tough to spread broadband. Supporting municipal broadband efforts and phasing out high-cost support for traditional phone service could be ways forward, consumer advocates said. PUC staff pointed to continued decline in USF contributions due to changing technology.

The National Hispanic Media Coalition and other public interest groups urged the FCC to do more to address the communications meltdown in Puerto Rico and the U.S. Virgin Islands (see 1710040046). Chairman Ajit Pai, meanwhile, said he appointed a staff task force on hurricane recovery. Addressed to Pai, the letter also was signed by the Center for Media Justice, the Color of Change, Free Press and Public Knowledge.

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.