Of the dozens of comments filed this week in response to the FCC’s rulemaking on USF contribution reform, there was little agreement about whether to stick with a revenue-based system for assessing contribution fees, to move to a system that uses connections or numbers, or even whether to assess fees on broadband service. The only universal sentiment that might be teased out of the plethora of comments filed is that, as AT&T put it, the current system is “dysfunctional.” Carriers differed, but generally supported a modified revenue-based system, while VoIP providers preferred a connections-based system.
Special access reform and FCC Chairman Julius Genachowski’s initial push for a vote on an order rejecting AT&T and Windstream pricing flexibility petitions are expected to be key areas for questions July 10 when commissioners are scheduled to appear before the House Communications Subcommittee for an oversight hearing. Other likely topics include USF/intercarrier compensation reform, progress on a voluntary incentive auction of broadcast spectrum and other spectrum issues, the Verizon Wireless/cable AWS deals and privacy regulations, said government and industry officials.
The Ad Hoc Coalition of International Telecommunications Companies supports USTelecom’s call for long-term, comprehensive changes to the FCC USF contribution system, the group said in a letter to the agency Wednesday (http://xrl.us/bm4ha3). The group, which includes several domestic and foreign long distance service providers, called out the “Carrier’s Carrier Rule” as “one of several irrational and inefficient processes in need of immediate reform.
A numbers-based USF contribution methodology would be relatively easy to implement and monitor, and provide stability and predictability in contribution obligations, members of the Ad Hoc Telecommunications Users Committee told FCC Wireline Bureau officials Thursday (http://xrl.us/bm3252). A “pure” numbers methodology is “still the FCC’s best option,” and would allow business users to contribute their “fair share” while not unduly burdening consumers, said the group representing some major companies that buy telecom services. A methodology based on connections to the Internet or network would be “viable,” but only if obligations are applied fairly, they said. A revenues-based methodology “has inherent flaws” that already plague the existing funding mechanism, they said.
Carriers uniformly support the launch of an integrated national database to address duplicate and eligibility concerns for the Lifeline program, according to comments filed in response to a further notice of proposed rulemaking in the FCC’s Lifeline Order. But several carriers, as well as state commissions, were wary of a proposal to use USF dollars to encourage digital literacy, questioning whether the FCC had such authority. States also expressed concerns over privacy issues, the expected cost of the national database, and AT&T’s proposal to let ILECs opt out of the Lifeline program.
Rural telecom companies protested the FCC’s Universal Service Fund and intercarrier compensation revamp efforts, in testimony at a hearing Wednesday of the House Small Business Subcommittee on Healthcare. Witnesses also complained about high administrative costs to apply for federal grants and loans. Subcommittee leaders urged accelerated broadband buildout, particularly in rural areas. Chairman Renee Ellmers, R-N.C., urged passage of her bill (HR-2128) to stop the federal government from imposing penalties on health care providers who can’t make electronic prescriptions.
Work at the FCC is intensifying on changing the Lifeline program that funds phone service for poor people, commissioners from both parties said Friday. A new draft of the Lifeline order circulated Tuesday night, prompting Commissioner Robert McDowell to return to Washington from a World Radiocommunications Conference in Geneva, he noted. Both McDowell and Commissioner Mignon Clyburn told a panel at the Minority Media and Telecom Council conference that the order tries to address waste and other inefficiencies in the subsidy program. Clyburn voiced support for the idea of broadband pilot tests, while McDowell said increases in one part of the Universal Service Fund mean all phone customers must pay more in USF fees unless there are other cuts.
Almost three months after the FCC approved a Universal Service Fund/intercarrier compensation reform plan, major industry players continue to seek significant changes. Comments were due last week on a further rulemaking notice approved as part of the order. How USF dollars ultimately will be divided as the fund is reconfigured to primarily pay for broadband is the key question addressed in most filings. They show that the FCC still has a huge job ahead as it continues to tackle changes to the USF. Numerous petitions for reconsideration have been filed in response to the Oct. 27 order. A second round of comments focusing on intercarrier compensation issues is due Feb. 24. Next week, the commission will begin to tackle Lifeline reform. Also looming are likely changes to the contribution side of USF.
The 10th U.S. Circuit Court of Appeals will hear challenges to the FCC’s Universal Service Fund order, it was announced late Wednesday. At least 13 challenges have been filed in various circuits; the 10th in Denver was picked in the judicial lottery to take the case. But even as the case was winding its way through the system, FCC officials on Thursday warned lawyers and lobbyists for wireless companies that the commission was hoping to launch a further rulemaking on reverse auctions as early as next month, with a goal of having the first auctions by the end of Q3 2012.
It will be “more of the same” for the FCC in 2012, Chief of Staff Eddie Lazarus told the Practising Law Institute conference Friday. The FCC still has significant work left expanding broadband adoption and addressing the country’s spectrum deficiencies, he said. Privacy experts on a separate panel said they expect the FTC and FCC to increase their focus on online privacy and cybersecurity issues in the coming year.