Border to Border Communications of Texas will go broke and default on its Rural Utilities Service loan in 2014 without an FCC waiver, said an ex parte filing posted Wednesday (http://bit.ly/156pSys). The company and the Western Telecom Alliance met with Commissioner Mignon Clyburn and her staff to ask about its petition to waive the $250 per loop per month cap and quantile regression benchmark limitations of the high-cost support, it said. The waiver has been pending since July. Under Texas law, Border to Border has sought nearly a million dollars from the state USF to make up for FCC reform losses, with a request before the Texas Public Utility Commission (CD April 4 p5). RUS “has suspended Border to Border’s ability to make additional draws on existing loans,” said the company’s FCC filing. “For example, Border to Border is currently unable to replace a 300 foot tower knocked down by a severe wind shear, which is common to its service area, or to fulfill wireless company orders for additional T-1 backhaul facilities.” Border to Border has spent about $100,000 on the waiver proceeding, it said. The Western Telecom Alliance and a representative of South Central Telephone Association also met with Clyburn, said another ex parte filing posted Wednesday. That meeting was about SCTelcom’s requested waiver of the $250 per loop per month cap and quantile regression benchmark limitations of the high-cost support. “Unfortunately, without the requested waiver, reductions in SCTelcom’s high-cost support will put it in likely default of its [RUS] loan covenants within the foreseeable future,” that filing said (http://bit.ly/Zcfnpk). “SCTelcom has been discussing these matters with the RUS staff, but the needed loan restructuring relief appears to require Congressional action.” The company has spent $30,000 on the waiver proceeding, it said.

The FCC is asking Congress for $359.3 million for fiscal year 2014, up $12.5 million from this year, all of which would be paid for through regulatory fees. Under the FCC’s budget (http://bit.ly/YLROE9), the number of full-time equivalent staff would increase from 1,776 this year to 1,821 in FY 2014. The Wireline Bureau would get the biggest staff increase, up 41 to 217. The Office of Managing Director would gain 20 to 223. Staff assigned to the chairman and commissioners would increase by six to 31. The FCC seeks $10.9 million to pay for the increasing cost of overseeing the USF. “More resources are required to continue the Commission’s work to modernize USF, implement reforms, and increase its oversight of the newly-reformed programs,” according to the budget document. “This request will support funding for additional staff” including attorneys, economists, IT specialists, program managers and technologists. The agency asks for $500,000 to help it construct a Public Safety Answering Points Do Not Call Registry, as mandated by Congress last year. But the agency also identified $2 million in cuts, through “identified efficiencies and savings in travel, telecommunications, contracts, and other expenses.” The FCC also asks for $4.8 million to move part of its Enforcement Bureau field operations from an old farmhouse at the FCC’s Columbia, Md., campus to its D.C. headquarters. “If the FCC continues to house employees and equipment in this facility, it must undergo a complete renovation,” the FCC said. “This extensive work would require replacement of walls, ceilings, floors, mechanical and electrical systems, furniture and other equipment. The farmhouse is a historical building, and as a result has presented challenges to any efforts to upgrade the facility."

Universal support for telecom around the world needs to be reviewed and cut down, said the mobile operators of the GSM Association Wednesday (http://bit.ly/ZhtgiK). It released a new report (http://bit.ly/10SIKvk) concluding “most funds are not succeeding in delivering their stated goal of widening access to telecommunication services and that alternative market-based solutions are more effective,” noting the amounts of unused funds in these USFs. There’s $11 billion “languishing” in these various funds unused, with India having a particularly high amount, it said. The report surveyed 64 funds, with over a third estimated to not yet give out contributions in any effective way. GSMA Chief Regulatory and Government Affairs Officer Tom Phillips called the USFs “a convenient form of taxation on the telecommunications industry,” which often “should be closed down and the balance of monies held used to extend access to mobile services to those unable to afford them, or those groups that live in particularly remote areas,” according to an association statement. The report discusses the November 2011 reform of the U.S. USF, particularly emphasizing the change to the FCC’s high-cost support and Lifeline program. It called the U.S telecommunications market “highly competitive.” Nearly half of the surveyed USFs were shown to be of limited activity or inactive, but the U.S. USF was judged active.

Bridging the rural communications gap has been complicated by uncertainty created by some FCC policies, said stakeholders at a Senate Communications Subcommittee hearing Tuesday. The hearing was the first of the subcommittee’s investigation into the state of the nation’s communications policy, and the first held by it’s new Chairman Mark Pryor, D-Ark. Subcommittee staffers said the panel will also seek to investigate the state of wireless communications and the state of video in future hearings.

Bring on the broadband policy dialogue, Gig.U Executive Director Blair Levin, a former FCC official who helped manage the creation of the National Broadband Plan, told FCC Chief of Staff Zachary Katz this week in a note. “I understand sources at the Commission think my analysis of the Universal Service Reform efforts were off base,” Levin wrote, referring to his keynote speech at the Wisconsin Public Service Commission broadband symposium last week, a critical take on the FCC’s USF reform that prompted a strong FCC defense of its policies (CD April 5 p10). “As I have expressed before, I would be happy to talk with anyone at the commission about that but moreover, I would propose a public session, at which Commission could illuminate me and the public on what I got wrong and at which I would have an opportunity to respond, including, if I got something wrong, to amend my remarks,” he said. “I think such an event would be very valuable to the public and to the next Chair, whoever she or he would be. I also think it would be fun.” The FCC declined comment.

Wireless ISPs must have “a seat at the table” as the FCC considers the IP transition, Lariat, a small Wyoming wireless ISP, told several FCC officials Wednesday, an ex parte filing said (http://bit.ly/10ASWtm). “The ‘IP transition’ is not a transition; our network has been all-IP from the beginning,” Lariat said. Wireless ISPs are “an archetype of what all broadband networks will one day be: general purpose networks on which voice is not a special service but simply another ‘app,'” Lariat said. WISPs have several concerns, including possible exclusion of over-the-top VoIP providers from numbering systems; continued anticompetitive special access pricing by ILECs; disparate treatment of non-carrier broadband companies; and incumbent requests for “wasteful and unnecessary” USF funding to overbuild areas “already served by WISPs.”

NCTA expressed “grave concern” about ILEC proposals to get access to Connect America Fund Phase I money without any corresponding obligation to extend broadband service to the 19 million Americans that lack it, in a meeting with an aide to FCC Chairman Julius Genachowski Thursday (http://bit.ly/10ARgzS). That approach, which would give the price cap LECs about $1.5 billion in support for 2013, is “fundamentally at odds” with the FCC’s USF reform goals, NCTA said. The ILEC proposals would classify as unserved about a million locations currently counted as served, and then make support available to upgrade the existing DSL service at those locations, NCTA said. Spending “limited resources” in such a manner “should not be a priority,” it said. NCTA also raised concerns about USTelecom proposals to eliminate the obligation to spend a third of its 2013 legacy high-cost support on broadband in areas currently unserved by any unsubsidized provider. “Enforcement of that requirement is critical to achieving the Commission’s goal of promoting broadband deployment,” NCTA said.

The FCC’s first reverse auction for USF monies last September under its new Mobility Fund must be considered a “qualified success,” Technology Policy Institute Vice President Scott Wallsten said in a paper released Friday. “Perhaps most importantly, it demonstrated that the FCC can run an effective reverse auction and demonstrated that allocating subsidies based on cost-effectiveness measures has the potential to dramatically increase the bang for the buck we get from universal service expenditures,” said Wallsten, a former FCC economist. Under the auction, the FCC ordered bids from lowest to highest based on dollars per road-mile covered and then granted awards until it reached its budget constraint of $300 million. “The results demonstrate how much more of a ‘bang for the buck’ it is possible to get when subsidies are ordered by cost-effectiveness rather than simply provided in all possible eligible areas,” the paper said (http://bit.ly/Z6Et5S). “By ordering subsidies in terms of cost-effectiveness, $300 million covered 83,500 road miles. Based on bids received in areas that were ultimately not awarded funding, covering the next 1,924 miles would have required an additional $144 million in subsidies.” It’s still unclear the extent to which the auction will mean service is ultimately rolled out to unserved areas, Wallsten wrote. “While this exercise demonstrated that the FCC can run an effective reverse auction, it also yields certain lessons,” the paper said. “Most notably, the auction highlighted the potential difficulty in generating participation. The FCC handled this problem well, but must continue to think hard about how to encourage participation in upcoming reverse auctions, most notably on the broadcaster side of the Incentive Auctions."

Wisconsin Gov. Scott Walker (R) emphasized a desire for deploying more broadband across the state, speaking at a press conference during the Wisconsin Public Service Commission’s two-day broadband symposium last week in Madison. He spoke of the significance of “high-speed Internet connections, both for uploads and downloads” for potential businesses in the state, citing competition from all over the world. The state rolled out multiple new tools to help achieve the broadband goals, part of a broader set of initiatives the state has launched to that end.

The federal government has failed in pioneering U.S. broadband deployment and thus prompts states and cities to lead, Gig.U Executive Director Blair Levin told Wisconsin broadband stakeholders Thursday. “As there is no reasonable expectation that the FCC will take any substantial action to change the investment equation in the near-term, states and cities must act to do so,” Levin said, according to his prepared remarks (http://bit.ly/Xs9g1D). The Wisconsin Public Service Commission is hosting a symposium on how to advance broadband adoption and deployment Thursday and Friday of this week in Madison, Wis. The PSC includes its own state broadband director, Tithi Chattopadhyay, who started last fall and has helped lead the PSC’s broadband efforts, which include a broadband playbook (1.usa.gov/XqhZvV) directed toward state legislators and policy officials. The playbook was formally released and presented in late March, although it was initially completed and went through a round of comments last fall. It “is a tool that all stakeholders need to study and explore to identify specific broadband actions and initiatives that can be considered for the state,” said the PSC commissioners in their March letter presenting the 15-page book. The symposium included a keynote from Levin, who helped manage the creation of the National Broadband Plan, and panels with industry and state officials. The National Broadband Plan struggled because “D.C. culture doesn’t lend itself to effective experimentation,” Levin said in his speech. “The Broadband Plan analysis demonstrated that the biggest problem for unserved areas stemmed from the lack of incentives to upgrade the networks in areas dominated by the three largest wireline phone companies.” Levin did credit the success of the $4 billion broadband stimulus program. He questioned the FCC’s USF reform and said the major companies “have indicated the reform package will not catalyze significant network deployments” and pointed to smaller companies that have stalled progress due to the uncertainty the reform created. The shortcomings of the reform “put it in a hole,” he said, noting it misses the impact of 4G and wireless and satellite on rural regions that need more bandwidth. “In sum, while the FCC shifted billions of dollars around, the combination of carrots and sticks created by the FCC actions has resulted in minimal deployments in the most problematic unserved areas identified in the Plan, a slowdown of deployment in other areas, consumers paying more, a failure to anticipate future needs and a punt of a central issue.” He praised local experimentation with broadband networks and noted how aware cities are of competing with one another. “Cities, and not the federal government, are leading in experimenting with new forms of mutual agreements that serve today and tomorrow’s needs,” Levin said, expressing confidence in municipal leadership and implicitly criticizing laws that restrict municipally owned networks: “We should also squarely look at the conflict that occurs when a state curtails a city’s ability to take control of its own bandwidth destiny.” The FCC disputed the characterization: “The Commission’s reform of USF to create the Connect America Fund is expanding broadband to rural Americans who lack access while for the first time putting the Fund on a budget, though we're still in the early innings,” an FCC spokesman said in response to Levin’s speech. “Last July, the Connect America Fund began connecting nearly 400,000 Americans unserved by broadband in 37 states. Last October, the Commission launched the Mobility Fund, providing $300 million to extend advanced mobile wireless service on up to 83,000 unserved road miles in 31 states, reaching areas where millions of Americans live, work, or travel. This October, the new Tribal Mobility Fund will provide $50 million to increase availability of advanced mobile services on Tribal Lands.” The spokesman emphasized broadband plans to come. “The Commission is also on track to launch, later this year, both the second phase of the Connect America Fund, which will distribute up to $1.8 billion a year to deploy broadband to millions of Americans across the country, and the second phase of the Mobility Fund, which will distribute $500 million annually to deploy mobile broadband to unserved areas,” he said. “The FCC has accomplished this entirely through savings from reforms, without increasing the size of the Fund or the cost to consumers and small businesses who pay into it. In fact, thanks to the Commission’s reforms of Lifeline, the overall size of USF -- and the USF contribution factor -- are both shrinking since reforms took effect. The contribution factor has decreased in each of the past two quarters, dropping nearly 15% from its high.” Intercarrier compensation reform will “unleash over $1.5 billion in annual benefits to consumers by eliminating hidden calling costs while removing major barriers to deployments of advanced IP-based broadband networks, such as AT&T’s announcement in November that it would substantially expand its U-Verse footprint,” the spokesman added. “Together, these reforms put the country on track to connect the 19 million Americans who lack service by the end of the decade.”