New York’s USF proceedings involving intrastate access charge issues will continue without turning to litigation for now. The state’s Public Service Commission Administrative Law Judge Howard Jack ruled Friday that the PSC will consider a Verizon proposal for resolving issues, with statements in support or opposition due Jan. 4 and reply comments due Jan. 18 (http://xrl.us/bn5pdq). The dispute has centered on whether various stakeholders would be able to resolve what the PSC called “Phase III” intrastate access charge issues in its creation of a $17-million state USF, adopted in August (CD Aug 17 p9). In recent months, AT&T, Sprint Nextel and T-Mobile resisted settling unresolved issues without litigation, and consequently, the PSC set up a litigation prehearing in late November. Verizon and other signatories submitted a joint proposal a little over a week before that conference date (http://xrl.us/bn5pdo). This proposal “would conclude that further action on intrastate access charges in New York is not warranted at this time, pending further FCC action addressing the switched access issues identified” in an FCC further notice of proposed rulemaking, Jack said, nor would it affect New York’s targeted accessibility fund for now. Verizon and other stakeholders want the proposal considered before moving to litigation, but “AT&T continued to insist that the litigation stage of Phase III has been triggered” and suggested a litigation schedule, the ruling said. Jack said he anticipates that a litigation track would mean “further effort to reform access charges will be put off for as much as another year and a half” and opted for direct PSC consideration of the proposal first.
The expectation by price cap LECs that the Connect America Fund should be responsible for paying pre-CAF expenses is “baseless and arbitrary,” the American Cable Association wrote the FCC Friday (http://xrl.us/bn5b8t). It responded to a Nov. 20 USTelecom filing describing ACA’s approach to the Phase II cost model -- limiting recovery for investments made prior to adoption of the CAF -- as “legally indefensible.” Price cap LECs’ expectation for recovery for prior investments is unreasonable because those investments served locations never supported by the high-cost USF fund, ACA said. Many of those investments in the voice network were likely made years ago, and may be fully depreciated, it said. “There is no economic rationale for providing recovery anew for already depreciated assets.” On USF-supported investments in networks where price cap LECs also deployed broadband capabilities, “the price cap LECs were under no regulatory obligation to use pre-CAF high-cost support for this additional purpose,” and they should have “no expectation of receiving guaranteed government support,” ACA said. “The price cap LECs have failed to demonstrate they are deserving of any capital recovery of legacy copper plant investment under the Phase II regime.” Ross Lieberman, ACA vice president of government affairs, told us the price cap proposal was “not really grounded in reality."
Overbuilding in rural areas could effectively result in one USF program -- the Rural Health Care Program -- imperiling already-existing infrastructure deployed through the high-cost program, NTCA told FCC Wireline Bureau officials Thursday, an ex parte filing said (http://xrl.us/bn5bue). If infrastructure support is provided under the Rural Health Care Program, the commission should “adopt a careful process to protect against overbuilding,” with sufficient notice and comment opportunities for parties to indicate whether existing networks can satisfy the needs of an applicant, “in lieu of self-provisioning infrastructure,” NTCA said. The association also cautioned against letting anticipated revenues from excess capacity satisfy contribution requirements.
XO asked the FCC to clarify that reliance on a certificate, consistent with the applicable Form 499-A instructions for the relevant year, sufficiently demonstrates that actual contributions were made to the USF on the relevant services (http://xrl.us/bn46rz). This would help the Universal Service Administrative Co. avoid “arbitrary disparate treatment” between providers who obtained certificates in reliance on the sample language prior to service, and those who did so in reliance on the sample language after service, XO said. XO also wants the FCC to reconsider the standard USAC should apply to evidence submitted by a wholesale carrier. The FCC’s adoption of the “clear and convincing” standard in the Reseller Order conflicts with the Administrative Procedure Act, which applies a “preponderance” standard in agency adjudications, XO said. The commission couldn’t adopt a “new and higher evidentiary standard” in its order without first giving notice and opportunity for comment, XO said.
Other than the Arctic Slope Telephone Association Cooperative, no other Alaska carriers had a “material misstatement of road miles and crossing data,” GVNW Consulting told FCC officials Tuesday, an ex parte filing said (http://xrl.us/bn4x5q). The Wireline Bureau granted ASTAC’s request last week to correct some of the road miles and crossing data used in calculating USF support limits, finding that the data erroneously included caribou migration and tractor trails (CD Nov 29 p12).
The South Park Telephone Co. is seeking a waiver of two USF rules, it told the FCC in a petition posted Monday (http://xrl.us/bn4tfx). The Colorado telco wants a waiver of the $250 per line monthly cap on federal support, and the limitation of high-cost loop support for reimbursable capital and operating costs. South Park serves a “large, low-density, mountainous” area of about 600 square miles, with no cities or towns that would mitigate its average cost per loop, it said. The territory’s “extensive size and rugged terrain” lead to higher construction and maintenance costs due to “poor road infrastructure, extreme weather, and the long distances required to reach different parts of the network for installation and repairs,” South Park said. Without a waiver, “all communication services” in the telco’s service area would be discontinued, it said.
FCC Commissioner Mignon Clyburn is committed to ensuring media ownership diversity, she told members of the Senate Commerce Committee during a confirmation hearing Tuesday. If she’s confirmed, Clyburn could be in line to become acting FCC Chairman if Julius Genachowski decides to leave next year, as is expected by many (CD Nov 8 p1). The committee also heard testimony from FTC nominee Joshua Wright, an economist and law professor at George Mason University and former FTC Scholar in Residence. It questioned him on the balance between regulation and the ability of free markets to protect consumers, as well as his willingness to recuse himself in cases involving companies who have financially supported his academic work, such as Google. The committee plans to mark up the nominations next week, said Sen. John Kerry, D-Mass., without specifying a date or time.
New Mexico may cap its universal service fund surcharges. The USF surcharge rates have been “trending upwards” and are now at 3.45 percent, said New Mexico Public Regulation Commission Commissioner Jason Marks in a statement (http://xrl.us/bn38v6). The PRC launched a rulemaking Thursday with a 4-1 vote that will examine whether a cap on landline and wireless phone surcharges is necessary. The one dissenting commissioner, Chairman Patrick Lyons, advocated the PRC hold workshops with industry first. The proposed rulemaking places the cap at 3 percent. The USF’s formula would also change, shrinking the overall fund and reducing the need for higher surcharges, it said. The fund amounts to about $24 million a year currently, and its subsidies are paid to CenturyLink, Windstream and “smaller landline phone companies,” according to the PRC. “For all intents and purposes, the USF funding mechanism is a tax on consumers that turns into a subsidy for certain phone companies,” Marks said. He has fought its rise since 2005 and wants to limit its use to where it’s needed, like in rural areas, he said. The PRC will hold a public hearing on the proposed cap March 18.
The FCC had no jurisdiction to change intercarrier compensation rates to zero in its 2011 USF/intercarrier compensation order, and it violated the 10th Amendment by treating states as administrative agents of the federal government. That’s the main argument of the state members of the Federal-State Joint Board on Universal Service, who submitted a 9,000-word amicus brief this week recounting what they called the FCC’s violation of dual-sovereignty; its “convoluted” and over-expansive interpretation of Section 251(b)(5) of the Telecom Act; and its reliance on “11th hour ex parte communications” without adequate notice, in violation of the Administrative Procedure Act. The 10th U.S. Circuit Court of Appeals had asked for 810 words.
The FCC is seeking further comment on its rules for future awards of USF monies under Phase II of the new Mobility Fund. The public notice was released by the Wireless and Wireline bureaus and asks a broad array of questions on identifying and prioritizing areas eligible for support, among other issues. Comments are due Dec. 21, replies Jan. 7. “Building on the comments filed in response to the [further notice of proposed rulemaking] and our experience to date in implementing a reverse auction to award one-time Phase I support, the Bureaus seek to develop a more comprehensive, robust record on certain of the issues related to the award of ongoing support for advanced mobile services,” the notice said (http://xrl.us/bn3wcm). “In this regard, we note that a number of commenters support having an opportunity to evaluate and learn from Mobility Fund Phase I before the program details of Phase II are finalized. In considering the issues discussed below, we request that commenters keep in mind that Phase II support is not one-time support, but is ongoing Phase II support aimed at expanding and sustaining mobile services."