The FCC has more work to do in promoting broadband adoption after adopting a Lifeline modernization order, said Gigi Sohn, counselor to Chairman Tom Wheeler, Wednesday at the Net Inclusion 2016 gathering in Kansas City, Missouri. Sohn said the order directs the Consumer and Governmental Affairs Bureau to develop a comprehensive digital inclusion plan to help the commission "better understand non-price barriers to broadband adoption" and to propose ways to remove those obstacles. The CGB is also to engage with community-based organizations, local and tribal governments, and industry stakeholders to pursue strategies for promoting broadband adoption through Lifeline and increased digital literacy, she said. The bureau is also tasked with helping broadband ISPs work with schools, libraries, community centers and others that serve low-income consumers, she said. Sohn asked for audience members to help. "Successful broadband adoption programs come from the bottom up, not the top down," she said in prepared remarks. "Trusted community-based organizations and anchor institutions know how best to serve residents most in need of the tools to get connected. We at the FCC will be counting on you and your partners to do one-on-one work with people in your communities to help eligible consumers who don’t have Internet access take advantage of the new Lifeline." A Wireline Bureau public notice asked any carriers with pending Lifeline compliance plan requests or petitions to be a Lifeline-only eligible telecom carrier to affirm in writing by June 7 that they still want bureau review of their applications. The Lifeline order is "part of a much greater accomplishment that I don’t think people rightly appreciate -- largely because it happened so gradually over a span of seven years," said Sohn, referring to FCC moves to shift various USF voice mechanisms to broadband support. "With the modernization of the FCC’s universal service programs -- notably Lifeline -- we are in a stronger position to bridge the digital opportunity gaps in the years ahead. If we seize this opportunity and do the day-to-day work to get people connected, we will look up in a few years and there will be millions more Americans enjoying the benefits of high-speed Internet -- for employment, for education, for entertainment, for health care, for civic engagement, for a better quality of life. Now that’s very gradual change we can believe in."
BOSTON -- The FCC was criticized by another group of stakeholders at INTX, as the show drew to a close Wednesday. All four state telecom regulator panelists heaped criticism on the FCC over a range of process and legal issues. Critiques involved moving Lifeline subsidies for the poor to broadband from voice in a way that allows the FCC to certify providers as eligible telecom carriers (ETC) instead of just states having that authority, and pre-empting anti-municipal broadband state law. Process concerns included that the federal commission takes too long to issue the text of orders, is too partisan, and commissioners don't cooperate. State commissioners of both parties said the FCC doesn't work closely with state telecom regulators and follow through by having such cooperation reflected in rules. Asked in Q&A whether the FCC had any bright spots, panelists praised it for moving USF to broadband.
A federal court set a briefing schedule on AT&T challenges to two FCC orders from December 2014 and December 2015 on price-cap telco USF duties. In an order (in Pacer) Tuesday in docket 15-1038 and consolidated cases, the U.S. Court of Appeals for the D.C. Circuit said an initial joint brief from petitioners and supporting intervenors is due June 17; the brief from respondents FCC and DOJ is due Aug. 1; a joint reply brief from petitioners and supporting intervenors is due Aug. 31; and final briefs incorporating an appendix are due Sept. 7, with oral argument typically at least 45 days later. AT&T, petitioner/intervenor CenturyLink, intervenor USTelecom and respondents FCC/DOJ had submitted an unopposed joint briefing proposal (in Pacer) Friday. Earlier this year, AT&T asked the court to consolidate its two challenges seeking more relief from USF duties (see 1601110036), which CenturyLink called "an unfunded mandate" (see 1602050029).
The National Exchange Carrier Association proposed a modified formula to calculate USF "high-cost loop expense adjustments for average schedule companies" covering the second half of 2016. The proposal includes a reduction in the authorized rate of return for rural carriers from 11.25 percent to 11 percent, said a NECA filing Friday in docket 05-337. The 25 basis points drop is the first in a six-year phasedown to 9.75 percent adopted by the FCC in its March 30 order overhauling rate-of-return USF mechanisms (see 1603300065).
NTCA pressed the FCC for "sufficient" budgets to carry out its overhaul of rate-of-return USF high-cost mechanisms through a new voluntary model-based approach and updated legacy support of stand-alone broadband. The FCC raised its $2 billion annual budget to $2.15 billion to cover possible increased support based on a broadband cost model, and also instituted new controls of capital and operating expenditures and lowered the authorized rate of return, leading NCTA to seek further budget flexibility (see 1603300065 and 1604180055). In a Thursday filing in docket 10-90 about a call with Wireline Bureau Deputy Chief Carol Mattey, NTCA backed "equitable sharing of budget resources and fair application of budget controls" among all rural carriers, with each RLEC responsible for the consequences of its model decision "rather than having the risk and consequences" spread to all carriers. "To the extent that the Commission does not adopt such a clear-cut approach to model elections, NTCA suggested two alternatives that could be used in ensuring equitable management of the budget among all RLECs," it said, providing numerous details of its proposals in an attachment. In an earlier filing about a call with Mattey and other bureau officials, WTA asked how certain aspects of the model-based selection process would work and also voiced concerns that some options would reduce the overall budget for all carriers sticking with the updated legacy mechanisms. Also, NTCA, in a letter discussing the "challenge process" for model-based support, said the FCC shouldn't overlook "clear evidence in the record indicating that certain Form 477 data are simply inaccurate or imprecise in measuring the presence of competition." Rural incumbents facing certain levels of unsubsidized competition aren't eligible for the new support, but many RLECs are challenging the Form 477 data of competitors (see 1604280011).
Rural telco groups said the FCC should be careful in changing rate-of-return rules for carrier cost recovery and related practices. Regulatory changes should apply prospectively only and should be targeted to provide increased clarity about allowable expenditures where helpful, said various RLEC groups in comments Thursday in docket 10-90, responding to a recent Further NPRM included in an item that overhauled rate-of-return USF mechanisms (see 1603300065 and 1603310039). Some voiced concern the FCC could make sweeping changes to throw out rules -- which they said had worked reasonably well -- based on "anecdotal" accounts of isolated problems.
Frontier Communications urged the FCC to include interim voice support in a pending draft order on a Connect America Fund Phase II reverse auction of broadband-oriented subsidies for areas served by price-cap incumbent telcos. Frontier and other ILECs say the support is needed to maintain voice service in extremely costly but currently unsubsidized remote areas that won't receive broadband/voice support through CAF II auction winners for some time. The FCC is tentatively scheduled to vote on a CAF II auction framework order at its May 25 meeting, which is expected to be followed by further proceedings to finalize the auction (see 1605050036). The cable industry's main trade group opposed the Frontier proposal.
The FCC said it received prohibited written presentations in the Lifeline USF proceeding in which the commission adopted an order overhauling the low-income subsidy program at its March 31 meeting (see 1603310056). The presentations in docket 11-42 were from the American Enterprise Institute, National Association of Counties and six individuals, said a public notice, saying presentations to decision-makers are generally not allowed from the day after release of the meeting's Sunshine agenda until the text of the item is issued (see 1604270028), which in this case was from March 25 until April 27. The presentations "will be associated with, but not made part of the record," said the PN in Tuesday's Daily Digest.
Nex-Tech Wireless, a small wireless carrier in rural Kansas, asked the FCC to cut it a break after it made a mistake on a form carriers use to report revenue subject to the USF. “For the first time since it began filing Form 499, NTW made a clerical error on its Form 499-Q due February 1, 2016, resulting in a large overstatement of its projected interstate revenues for the second quarter of 2016,” NTW said. NTW said it didn't learn of the error until it received an invoice April 22. As a result, the company missed the 45-day deadline for revising the filing, it said. “As a result, the charges on its April 22 invoice were nearly three times what they should have been,” NTW said. Dollar figures were redacted in the public version of the FCC filing. NTW asked for a waiver of the 45-day deadline and a break on interest and penalties as a result of the mistake.
Alaska telcos are battling over a plan to give broadband-oriented USF support to rural telcos and wireless competitors in the state. The Alaska Telephone Association (ATA) and General Communications (GCI) say their Alaska Plan is a consensus proposal to provide wireline and mobile broadband to consumers in remote areas of the state without increasing high-cost support. ATA disagrees with Alaska Communications that the "competitive eligible telecom carrier (CETC) portion of the Alaska Plan should be disapproved, delayed, or subject to ACS's proposed conditions," it said in a filing Monday in docket 10-90. GCI last week responded to Alaska Communications' "repetitive and unprincipled attempts" to "scuttle the Alaska Plan, as it uniquely continues to collect the same amount of high-cost support as it did in 2011, despite the absence of any performance commitments."