NTCA officials suggested rural telcos should receive additional high-cost USF support in order to achieve sustainable broadband service and equitable treatment under FCC subsidy programs. Speaking at the group's policy conference Monday, the officials said Lifeline and E-rate USF programs received substantial funding hikes and were indexed for inflation, unlike rate-of-return high-cost USF support, which only has increased a little and isn't indexed. NTCA members -- about 500 of whom were in attendance -- will lobby congressional offices this week on the issue, they said.
ViaSat pressed the FCC to devise "technologically neutral" USF reverse auctions that permit all technologies to compete for broadband subsidies on an equal playing field. ViaSat advocates "a straightforward design for the upcoming Connect America Fund Phase II reverse auctions that would award funds to the bidder that can offer qualifying service with the lowest required subsidy, thereby encouraging broad participation and facilitating efficient outcomes," said a company filing in docket 10-90 Thursday. "ViaSat opposes proposals that would unduly complicate the CAF II reverse auctions by awarding 'points' to certain bidders based on subjective criteria -- particularly as those proposals tend to favor particular technologies over others in heavy-handed fashion." It said the March 14 letter from the Utilities Telecom Council and other rural electric and telco associations responding to a Dec. 29 Hughes Network Systems (HNS) submission underscores the problem of points-based plans. "The Associations and HNS both advocate complex schemes that would create opportunities for gaming the funding process and marginalizing particular technologies -- including, in the case of the Associations’ proposal, marginalizing satellite broadband," ViaSat said. It said the proposals would: (1) delay initial funding selections and spark numerous challenges to them, (2) favor certain technologies over others without regard to quality or cost efficiency, (3) inflate funding requirements, leading to increased contribution burdens for consumers and/or a “funding gap” that leaves many unserved households without broadband access, and (4) at best, delay the availability of service to those households. ViaSat disputed association arguments that satellite service is incapable of providing high-quality broadband service.
The FCC should address issues that arose during the first phase of the USF mobility fund before launching phase II, the Rural Wireless Association said in a letter to the commission. “There is a continued need to support mobile communications services in rural areas,” RWA said. “Mobile voice and broadband services are critical to public safety communications and economic development, and can help address problems such as the ‘digital divide’ and ‘homework gap’ that are present in rural America. For these reasons, it is critical that the Commission craft and implement a dedicated mobility support mechanism that will provide specific, predictable, and sufficient support to both advance and sustain the availability of mobile services in high-cost areas.” The FCC should start by looking at Mobility Fund Phase I and “carefully consider what did and did not work,” RWA said. The record shows that only $67 million in Mobility Fund Phase I (MFI) funding has been disbursed, and more than $70 million was returned to the FCC, the group said. “RWA recommends that the Commission staff solicit feedback on MFI before diving headfirst into a Phase II mechanism that risks replicating unpredictable processes,” the letter said. RWA also said FCC data on broadband deployment needs to be improved. The group called on the FCC to address problems caused by the incompatibility of CDMA and GSM networks, in the filing posted in docket 10-208.
The FCC made tariff review plans available for ILECs updating interstate access service tariffs. A Wireline Bureau order in Thursday's Daily Digest included a link to the TRPs, which support rate revisions by both price-cap and rate-of-return telcos in their tariffs. "The completion of the TRPs appended to this document will provide the supporting documentation to partially fulfill the requirements established" in various sections of the Commission’s rules, the order said. Rate-of-return telcos on July 1 must adjust their tariffs to reflect an 11 percent authorized rate of return under a six-year phasedown from 11.25 percent to 9.75 percent adopted in the FCC's rural USF overhaul order in March (see 1603300065). Both rate-of-return and price-cap telcos must incorporate other tariff modifications that were detailed in the order.
Rural telcos will have to provide more broadband, often with less federal support, said Fletcher Heald attorney James Troup, who represents RLECs and examined recent FCC actions overhauling high-cost USF subsidies for rate-of-return carriers (see 1603300065 and 1603310039). The commission is "imposing numerous additional obligations upon rate-of-return regulated incumbent local exchange carriers (ILECs), while leaving many rural ILECs with the same or even less compensation to satisfy the significant broadband build-out expenditures mandated by the new regulations," Troup said in a blog post Wednesday. The FCC is phasing down the authorized rate of return from 11.25 percent to 9.75 percent over six years and giving carriers two options: shifting to model-based support or staying with legacy mechanisms, with one revamped as Connect America Fund Broadband Loop Support (CAF BLS) and providing stand-alone broadband support. In both cases, ILECs "will have new broadband construction obligations entailing additional costs," Troup wrote. "The FCC did not allocate additional funds to recover the increase in construction expenditures for those ILECs that elect to receive CAF BLS and high cost loop support. The FCC only provided $150 million more to pay for all the new broadband construction it is mandating for those ILECs that select model-based support. The funds within the current budget will first be distributed to those that elect model-based USF, and what is left within the current budget will be available for those that receive CAF BLS and high cost loop support." Many RLECs will receive less funds under a "regression analysis" that limits operating and corporate expenses, and due to capital budget constraints, he said. The changes create substantial uncertainty for those choosing legacy support, Troup told us Thursday. He said rural telcos will be forced to bear the burden of broadband construction that benefits long-distance providers, wireless carriers and Internet edge players using those networks.
The Competitive Carriers Association remains optimistic that small carriers will be active in the TV incentive auction, President Steve Berry said. Berry predicted the forward auction, in which carriers will bid for licenses, will start in May or June, in comments streamed from the CCA spring conference in Nashville. “A number of policy wins were essential to make this auction actually a reality for smaller carriers and many of our members,” Berry said. The smaller license sizes, spectrum reserve and mandated interoperability in the FCC’s rules were CCA priorities, he said. “CCA members are a critical part of the mobile infrastructure system.”
Frontier Communications gained access to $48.6 million in Connect America Fund subsidies for serving 114,610 locations in areas of two states covered by wireline systems it recently acquired from Verizon (see 1604010036), said an FCC Wireline Bureau order in Tuesday's Daily Digest. Frontier was authorized to receive $32 million for California and $16.6 million for Texas that Verizon had accepted in broadband-oriented CAF Phase II support. The bureau directed Universal Service Administrative Co. to disburse to Frontier the USF subsidy amounts, which included some deferred amounts and other adjustments not previously disbursed to Verizon.
Some of the seven telecom bills the House Communications Subcommittee will consider at 10:15 a.m. Wednesday contain problems and should be opposed, some of the nine witnesses plan to tell lawmakers, according to written testimony. CTIA will object to the House Republican bill to cap the Lifeline program at $1.5 billion, while the American Civil Liberties Union will question the privacy protections of another bill.
The new version of the Alternative Connect America Cost Model (A-CAM, v2.2) incorporates inputs and changes from the FCC's recent rate-of-return USF overhaul order (see 1603300065), said a Wireline Bureau public notice Friday in the Daily Digest, posted in docket 10-90. The bureau released illustrative results showing support amounts for carriers to assist their decisions on whether to opt in to the model-based support, but it said the model hasn't been finalized. The PN invited unsubsidized rural telco competitors to update information on their broadband-oriented deployments, which can be used to deny incumbent carriers new Connect America Fund support. Comments challenging competitor coverage data are due April 28.
The FCC proposed the biggest fine ever for a Lifeline violation, $51 million, against Total Call Mobile for allegedly enrolling tens of thousands of duplicate and ineligible consumers into the program. The FCC also ordered the company to explain why the agency shouldn't suspend it from the Lifeline program. One commissioner from each party said the proposed fine is too small. Commissioner Ajit Pai alleged that Chairman Tom Wheeler kept the order under wraps until after a vote on Lifeline overhaul. Total Call didn’t comment on the notice of apparent liability.