NTCA said more time is needed for a comprehensive rural carrier USF overhaul than is currently anticipated under the FCC's timetable for action this year. Citing the "complexity of proposals and the currently fluctuating and unclear state of the record on them," the FCC processes "necessarily require more time than permitted before a year-end Commission vote," NTCA said in a filing posted Tuesday in docket 10-90. NTCA said the FCC could by year-end adopt a fix to solve some targeted issues, including the "standalone broadband problem" under which rate-of-return rural carriers currently lose high-cost USF support when customers switch voice service to other providers.
AUSTIN -- Just a few months after the deadline for telcos to accept CAF II offers from the FCC, companies such as AT&T and Frontier Communications are moving forward with build-out plans, said company officials on a panel Tuesday during NARUC’s annual meeting. While not all states have USFs, telco officials said it would be helpful for those states that do to use those funds for areas that didn’t qualify for FCC CAF II money. State commissions should be encouraging operators to build out networks and to bid in the CAF II auction so everyone can get connected, said South Dakota Public Utilities Commissioner Chris Nelson, NARUC Telecom Committee chairman.
The NAB said some broadcast regulatory fees should be reassigned to wireless carriers to reflect the expected spectrum transfer between sectors from the upcoming incentive auction. “The only equitable approach is for the regulatory fees to ‘follow the spectrum.’ The spectrum to be repurposed through the incentive auction will benefit wireless service providers,” said the NAB in comments as industry parties responded to an FCC Further NPRM in docket 15-121 this week (replies are due Dec. 7). CTIA didn’t address the possible broadcast fee shift in its written comments and had no comment to us Tuesday.
The FCC appears to be nearing a vote on a key AT&T spectrum buy -- the carrier’s planned acquisition of lower 700 MHz B-block licenses in California from Club 42, industry officials said. Competitive carriers view the order as a key test of the 2014 mobile spectrum holdings order (see 1405160030). It committed the agency to give extra scrutiny to deals where a company already owns more than one-third of the low-band spectrum in a market.
The FCC ruled 997 Missouri census blocks served by CenturyLink are ineligible for broadband-oriented USF support because they’re also served by unsubsidized competitors. The commission unanimously approved and released an order Thursday granting a request from Co-Mo Comm and United Services to overturn a bureau decision that had found the census blocks were unserved by unsubsidized competitors and thus eligible for Connect America Fund Phase II support for CenturyLink. The decision was not a surprise as FCC Chairman Tom Wheeler had circulated a draft that had recommended granting the request (see 1509300049).
The first days under House Speaker Paul Ryan, R-Wis., should encourage telecom industry stakeholders, Washington veterans told us. The 45-year-old Ryan, a 2012 vice presidential candidate and most recently Ways and Means Committee chairman, kept a low profile on telecom issues since election to the House in 1998. But his focus on tax and regulation has often led to backing certain telecom measures over the years, with focuses ranging from E-rate to USF to the fairness doctrine. He assumed the speakership after the retirement of Rep. John Boehner, R-Ohio, at October’s end, following weeks of GOP leadership uncertainty, and a crucial hire in Ryan’s leadership office showcases strong ties to industry.
The South Carolina Public Service Commission is poised to decide whether wireless and wireline are in direct competition with each other. The PSC decision also will determine whether wireless companies will be required to pay into the state USF per the state’s 1996 Telecom Act, which is similar to the 1996 federal act of that name.
Chief of Staff Ruth Milkman defended the FCC’s decision to set aside some incentive auction spectrum for companies that don’t have significant low-band spectrum holdings in a particular market, in a speech Tuesday to Evercore Tech Change Conference. “With more than 70 percent of low-band spectrum in the hands of just two providers, this reserve assures that multiple providers without significant amounts of low-band spectrum have a meaningful opportunity to compete to acquire these valuable airwaves,” Milkman said, according a text posted by the FCC. “Where competition cannot be expected to exist, we will not hesitate to act to protect consumers and advance the public interest.” Milkman said the TV incentive auction is now the biggest single item on the FCC agenda, noting the World Radiocommunication Conference is underway in Geneva (see 1511040040). She stressed the potential significance of the FCC recent NPRM on spectrum frontiers (see 1510220057), as the WRC looks at new bands for wireless broadband. “We’re talking about 3,800 megahertz of spectrum that we are going to look at,” she said. “That’s six times all of the commercial spectrum that the Commission has authorized for broadband. And we’re potentially doubling the amount of high-band unlicensed spectrum.” Milkman also emphasized the importance of the USF program. The new Connect America Fund “is moving forward with plans to invest $9 billion over 6 years to preserve and expand broadband deployment to 7.3 million rural Americans,” she said. “These investments are targeted and fiscally responsible. These contributions leverage investment from private ISPs. We will only fund one service provider per area, and we won’t provide funding in areas where there is an unsubsidized competitor.”
NTCA raised questions about a possible FCC “bifurcated approach” to rural telco USF reform under which prior expenses would be recoverable through existing mechanisms while new investments and some stand-alone broadband expenses would be recoverable through new mechanisms. “While it is important to get reform done quickly, it is more important to get reform done right,” NTCA said in a filing posted Monday in docket 10-90 on a meeting with a senior FCC staffer. The rural telco group asked what the bifurcated approach's objective is, given that it believes FCC-articulated reform principles are more likely to be achieved by “already-proposed measures,” such as “budget controls and reasonable limits on operating expenses and prospective capital investments." Plus, NTCA said existing high-cost loop support (HCLS) and interstate common line support (ICLS) mechanisms have "shortcomings," but they have worked "better than any other system" to encourage and enable sustainable rural broadband investment. It's “essential that any reforms strike a careful balance toward both a reasonable opportunity to recover costs in accordance with the rules in place at the time the relevant investments and associated expenses were incurred and the need to provide sufficient and predictable support for future broadband deployment and operations; neither can or should be sacrificed for the other,” NTCA said. The group also voiced concerns about any “artificial cut-off” of HCLS/ICLS support that would move all associated costs “to the new mechanism as of a future date certain.” NTCA said HCLS and ICLS support should “continue for the useful life of networks used to deliver supported services; even after those networks are fully depreciated, rural rate-of-return-regulated local exchange carriers ('RLECs') will continue to incur expenses to deliver voice and broadband services over them.” NTCA also noted the “time sensitivity” of a request for commission review of a Wireline Bureau denial of a petition for reconsideration of an HCLS rate floor, which rural telcos believe was flawed. Rural telcos aren’t substantively challenging the application of the rate floor to HCLS support, but its methodology, and the FCC should act “well in advance of June 2016" to set "a more reasonable methodology,” the group said.
The current FCC appears to be waging a “war” against private infrastructure investment, Bob Quinn, AT&T senior vice president-federal regulatory, said Tuesday in a blog post. Quinn cited reports that the agency is sending out “SWAT” teams of FCC staffers “to preach the use” of USF dollars “to build government-owned and operated broadband infrastructure in rural and non-rural areas,” and pointed to the agency’s enhanced look at special access rates. “To be clear, we at AT&T have no problem with government-owned networks in areas where there has been a market failure because the economics for the private sector just don’t work,” Quinn wrote. “Unfortunately, the FCC’s advocacy here … doesn’t appear to be limited to circumstances of market failure.” In the past, “incenting all companies to build broadband was THE goal of all policymakers. It doesn’t feel that way anymore,” he said. The FCC started down this “circa-1980’s regulatory journey” three years ago, he said. “I fretted that these moves signaled its intent to abandon policies that were designed to, and did, result in significant broadband infrastructure investment in the U.S. I called the FCC’s moves the Bridge to Nowhere. My point then, and still is, that the FCC should be focused on establishing policies that lead to more fiber and broadband infrastructure investment in this country. ... It’s high time the FCC got serious about policies that incent that kind of investment.”