The FCC seems disinclined to cap or control Lifeline subsidies as part of an effort to modernize the USF program supporting low-income telecom service, Commissioner Mike O’Reilly said in a blog post Thursday. “Failing a major change in direction, the FCC is preparing to massively expand the size and scope of the Lifeline Program without the necessary inclusion of a hard budget or financial constraints,” he said. “Such irresponsible action will balloon a program plagued by waste, fraud, and abuse and result in higher phone bills for every American -- including those already struggling in the current economy. In sum, it’s a recipe for disaster, and I can’t and won’t be part of it.”

The FCC seems disinclined to cap or control Lifeline subsidies as part of an effort to modernize the USF program supporting low-income telecom service, Commissioner Mike O’Reilly said in a blog post Thursday. “Failing a major change in direction, the FCC is preparing to massively expand the size and scope of the Lifeline Program without the necessary inclusion of a hard budget or financial constraints,” he said. “Such irresponsible action will balloon a program plagued by waste, fraud, and abuse and result in higher phone bills for every American -- including those already struggling in the current economy. In sum, it’s a recipe for disaster, and I can’t and won’t be part of it.”

IDT Telecom received somewhat more support than opposition to its bid for an FCC rulemaking aimed at expanding the Telecommunications Relay Service (TRS) Fund’s revenue base to include the intrastate revenue of industry contributors (see 1512210029). IDT’s petition got support from a coalition of consumer groups that advocate for the rights of the deaf and hard of hearing, and from some industry parties, including two video relay service (VRS) providers. But a VoIP industry group opposed the petition and an incumbent telco group said the FCC shouldn't make changes to the TRS Fund’s contribution at this time. The initial comments of parties were posted in docket 03-123 Thursday and Friday. The FCC currently assesses industry interstate and international telecom end-user revenue to pay for the TRS Fund.

The FCC should get going on reforming its USF contribution system, ITTA and the Montana Telecommunications Association (MTA) said Friday. There is “growing pressure on the Universal Service Fund as the Commission considers expanding the scope of services supported by USF programs,” said midsize-telco group ITTA in a filing posted in docket 10-90 summarizing an Oct. 28 meeting with Gigi Sohn, counselor to FCC Chairman Tom Wheeler. “We urged the Commission to undertake USF contribution reform and broaden the base of contributors before taking any further steps to modify the Lifeline program to include support for broadband services.” MTA also urged the FCC to address contribution reform, “particularly given the increasing pressure on the high cost reform efforts caused by budgetary restraints and the shrinking contributions base,” the association said in a filing on its meetings with aides to Wheeler and Commissioners Mike O'Rielly and Jessica Rosenworcel. An FCC spokesman said the issue was before a federal-state joint board. Carriers currently contribute 16.7 percent of their interstate and international telecom revenue to USF, a rate that has trended up over the years as subsidies have increased and the industry revenue base has eroded. Carriers generally pass the fees along to consumers.

Industry parties and others continued to support FCC proposals to Lifeline USF subsidies to broadband service and revamp administrative oversight, but divisions remain over specifics. In reply comments filed in docket 11-42 responding to initial comments on the FCC’s NPRM (see 1509010073 and 1509040045), parties generally backed giving low-income consumers expanded choice and shifting responsibility for verifying Lifeline subscriber eligibility from telecom carriers to a third party. But there was disagreement over whether the FCC should establish minimum Lifeline standards for broadband/voice service. Numerous tribal groups also filed reply comments urging the FCC to retain and even increase enhanced Lifeline tribal support.

Industry parties and others continued to support FCC proposals to Lifeline USF subsidies to broadband service and revamp administrative oversight, but divisions remain over specifics. In reply comments filed in docket 11-42 responding to initial comments on the FCC’s NPRM (see 1509010073 and 1509040045), parties generally backed giving low-income consumers expanded choice and shifting responsibility for verifying Lifeline subscriber eligibility from telecom carriers to a third party. But there was disagreement over whether the FCC should establish minimum Lifeline standards for broadband/voice service. Numerous tribal groups also filed reply comments urging the FCC to retain and even increase enhanced Lifeline tribal support.

More wireless carriers weighed in on Lifeline reform in comments posted by the FCC (see 1509010073) in docket 10-90 Wednesday. Sprint urged the FCC to use a light hand in imposing new regulations as it moves toward new Lifeline rules. “The Lifeline market -- particularly for wireless Lifeline services -- is robustly competitive, with wireless service offers improving significantly and steadily over the past several years even in the face of higher regulatory compliance costs, higher risk, and higher churn,” Sprint said. While the voice-only support amount should remain at $9.25 monthly per line, a $9.25 subsidy for broadband service, with no subsidy for a broadband device, “will be too low to generate a meaningful increase in broadband subscription by Lifeline customers,” Sprint said. Proposals to cap the Lifeline program are “premature” and should be abandoned by the commission, the carrier said. The FCC also “should decline to adopt any proposal to recover program administration costs exclusively from Lifeline service providers,” Sprint said. “As is the case for every other federal Universal Service program, all Lifeline program costs should be recovered through the general USF contribution factor assessed on all contributors.” A group of wireless eligible telecom carriers, each with fewer than 2,000 Lifeline customers, urged the FCC to cut red tape in the program. “Lifeline providers currently face significant regulatory compliance burdens, including monthly reporting (FCC Form 497), annual reporting (FCC Forms 481 and 555), the need to develop and modify Lifeline enrollment forms, the requirement to review and process certification forms and eligibility documentation during enrollment, the need to upload and manage subscriber information in the National Lifeline Accountability Database (NLAD), the requirement to re-certify all of their Lifeline customers each year, and the need to respond to USAC audits including Payment Quality Assurance (PQA) reviews and other inquiries,” they said. While the FCC is recommending some streamlining of the rules, it's proposing additional regulatory requirements, the small carriers said. “This burden falls disproportionately on small carriers, who cannot spread the regulatory costs of Lifeline compliance -- many of which are fixed costs -- across a large customer base.” Carolina West Wireless, Cellular Network Partnership, East Kentucky Network, Pioneer Telephone Cooperative, Union Telephone and Union Wireless signed the filing.

More wireless carriers weighed in on Lifeline reform in comments posted by the FCC (see 1509010073) in docket 10-90 Wednesday. Sprint urged the FCC to use a light hand in imposing new regulations as it moves toward new Lifeline rules. “The Lifeline market -- particularly for wireless Lifeline services -- is robustly competitive, with wireless service offers improving significantly and steadily over the past several years even in the face of higher regulatory compliance costs, higher risk, and higher churn,” Sprint said. While the voice-only support amount should remain at $9.25 monthly per line, a $9.25 subsidy for broadband service, with no subsidy for a broadband device, “will be too low to generate a meaningful increase in broadband subscription by Lifeline customers,” Sprint said. Proposals to cap the Lifeline program are “premature” and should be abandoned by the commission, the carrier said. The FCC also “should decline to adopt any proposal to recover program administration costs exclusively from Lifeline service providers,” Sprint said. “As is the case for every other federal Universal Service program, all Lifeline program costs should be recovered through the general USF contribution factor assessed on all contributors.” A group of wireless eligible telecom carriers, each with fewer than 2,000 Lifeline customers, urged the FCC to cut red tape in the program. “Lifeline providers currently face significant regulatory compliance burdens, including monthly reporting (FCC Form 497), annual reporting (FCC Forms 481 and 555), the need to develop and modify Lifeline enrollment forms, the requirement to review and process certification forms and eligibility documentation during enrollment, the need to upload and manage subscriber information in the National Lifeline Accountability Database (NLAD), the requirement to re-certify all of their Lifeline customers each year, and the need to respond to USAC audits including Payment Quality Assurance (PQA) reviews and other inquiries,” they said. While the FCC is recommending some streamlining of the rules, it's proposing additional regulatory requirements, the small carriers said. “This burden falls disproportionately on small carriers, who cannot spread the regulatory costs of Lifeline compliance -- many of which are fixed costs -- across a large customer base.” Carolina West Wireless, Cellular Network Partnership, East Kentucky Network, Pioneer Telephone Cooperative, Union Telephone and Union Wireless signed the filing.

The Obama administration’s Broadband Opportunity Council later this year could help improve wide-ranging government efforts to expand high-speed Internet access to Americans, but it should follow up annually to ensure the initiatives are sustained, panelists said at an Information Technology and Innovation Foundation event Friday. Although the federal government can be a catalyst, localities will have to do much heavy lifting to remove barriers to investment, with the private sector providing most of the capital, they said. The BOC is an inter-agency group assigned by President Barack Obama to make recommendations by Aug. 20 to spur broadband deployment and adoption. Comments to the group are due by June 10.

The FCC has much left to do to overhaul USF funding and intercarrier compensation (ICC), panelists said at an FCBA seminar Wednesday on reforms since the 2010 National Broadband Plan (NBP). High-cost USF support for generally small, rural rate-of-return carriers and Lifeline USF await major changes, they said. Overhaul of high-cost support for larger price cap carriers and E-rate support for schools and libraries are further along, but questions remain; and numerous ICC disputes continue to bubble, panelists said.