The Indiana Utility Regulatory Commission is doing a triennial review of the state's USF, an order said. A prehearing and technical conference is scheduled for Oct. 21 to make sure the USF meets requirements, see that the service is affordable and review operation of the fund, the commission said in the order dated Sept. 30.
Four rural telco groups made proposals for implementing parts of an FCC plan to give rate-of-return carriers the option of shifting to a new USF support mechanism based on a broadband cost model. The ITTA, NTCA, USTelecom and WTA submitted “consensus recommendations” for allocating an extra $200 million a year in Connect America Fund reserve money for RLECs opting into the model-based approach and for proposed broadband buildout milestones over a 10-year period, said an ITTA filing posted Friday in docket 10-90. ITTA, joined by USTelecom and WTA, updated a proposed broadband buildout methodology, in a separate filing Friday. And USTelecom Monday made another filing, on behalf of all four groups, asking the FCC questions about possible changes to legacy high-cost USF mechanisms for RLECs that don’t opt in to the model-based support.
The FCC should reform USF subsidy mechanisms for rate-of-return telcos this year, two rural LEC representatives and their consultants said in a filing in docket 10-90 Thursday by Cheryl Parrino of Parrino Strategic Consulting Group. Officials of Great Plains Communications and Consolidated Cos., Parrino and former Commissioner Harold Furchtgott-Roth met with Wireline Bureau officials and commissioner aides Tuesday and Wednesday, Parrino wrote. "We also informed the offices that a model option is very critical for many rural companies like Great Plains and Consolidated and that without that option many rural customers will not receive the benefits of broadband deployment," Parrino said. "We indicated that the work on the model is well fleshed out and that the industry has made good progress on legacy reform." Rural telco groups proposed a framework for revising FCC (legacy) rate-of-return high-cost USF mechanisms to facilitate broadband support while also giving carriers the option of receiving support based on a revised broadband cost model (see 1506030052 and 1506040028). Rural telco representatives have continued to discuss specific reform ideas with the agency. Asked if the FCC would seek public comment on any proposed new rules, Wireline Bureau Chief Matt DelNero said Wednesday at an FCBA event that the agency would look to whether the proposals "are within the four corners" of a 2014 NPRM to make a determination.
T-Mobile and allies urged the FCC to assess both mobile and fixed services to satisfy its broadband deployment mandate under Section 706 of the Telecom Act. In replies in docket 15-191 on a notice of inquiry, U.S. Cellular said mobile broadband isn’t being rolled out in a “reasonable and timely fashion" as mandated, and it was among those asking the agency to act to spur deployment and competition. But PCIA said mobile broadband is being deployed in a reasonable and timely way. There were no replies posted from AT&T, CTIA, NCTA, Verizon and others that submitted initial comments citing robust broadband deployment and sometimes suggesting the commission was seeking to make a negative Section 706 finding (see 1509160063).
If the FCC changes financial reporting rules for price-cap carriers, it will have "unintended consequences," said the Nevada Public Utilities Commission in comments in docket 14-130 filed after the formal pleading cycle closed. Reducing financial reporting requirements could undermine access to accounting information that's useful for setting the rates of cost-based, rate-of-return regulated ILECs at the state level and for calculating disbursements to carriers from the state USF, said the PUC. Because the PUC has adopted the current FCC rules for financial reporting, if the FCC changes requirements, it will become a challenge for the small-scale providers of last resort to comply with both levels, the PUC said.
Industry parties and others continued to support FCC proposals to Lifeline USF subsidies to broadband service and revamp administrative oversight, but divisions remain over specifics. In reply comments filed in docket 11-42 responding to initial comments on the FCC’s NPRM (see 1509010073 and 1509040045), parties generally backed giving low-income consumers expanded choice and shifting responsibility for verifying Lifeline subscriber eligibility from telecom carriers to a third party. But there was disagreement over whether the FCC should establish minimum Lifeline standards for broadband/voice service. Numerous tribal groups also filed reply comments urging the FCC to retain and even increase enhanced Lifeline tribal support.
The FCC is "poised to make some real lasting reforms" on inmate calling services, said Wireline Bureau Chief Matt DelNero, speaking at an FCBA event Wednesday shortly before the agency announced it circulated a draft order and Further NPRM in that proceeding (see 1509300067). He credited Commissioner Mignon Clyburn with spearheading the effort and said the bureau was excited by the opportunity to make a “real difference” in the lives of inmates and their relatives. DelNero said a special access rulemaking is another top priority for the bureau and FCC Chairman Tom Wheeler. He said the commission’s previous tests for providing telcos pricing flexibility “simply weren’t doing the job" and staff was eagerly awaiting feedback from stakeholders on industry data the commission has collected to assist in its review. DelNero also said the bureau was "looking forward to digging in" on comments being filed in its Lifeline USF rulemaking (replies were due Wednesday) and then making recommendations to commissioners for changes to cover broadband and promote administrative efficiency. He noted the FCC had circulated a draft order to create a framework for a high-cost USF reverse auction in some price-cap territories that would "unleash the power of market competition." The draft would build on the lessons the agency has learned in overseeing rural broadband experiments, DelNero said, but he wouldn't say what those lessons were. He also said the bureau was focused on overhauling high-cost USF for rate-of-return carriers and said Wheeler's recent NTCA speech provided a good outline of the commission's direction (see 1509210029). He noted the FCC was following up its recent IP/tech transition order with a Further NPRM that aims to establish standardized discontinuance "metrics" that would provide greater predictability to stakeholders. He said the FCC anticipated a flurry of telco discontinuance applications affecting large numbers of consumers as part of the transition from copper-based networks and services to fiber networks and IP-based services. He also noted bureau efforts to assess the pace of broadband deployment under a Section 706 mandate, implement recent changes to the USF E-rate program, and oversee the local number portability administration shift from Neustar to Telcordia.
CenturyLink urged the FCC to uphold a bureau decision denying USF challenges to its eligibility to receive broadband-oriented Connect America Fund Phase II support in certain census blocks in Missouri. But a draft order that recently circulated would approve an application for review of the decision, a person familiar with the proceeding told us Wednesday. In a filing posted in docket 10-90, CenturyLink said the Wireline Bureau had correctly rejected challenges by Co-Mo Comm and United Services based on insufficient evidence. CenturyLink also said the Co-Mo/United application for review was "procedurally defective and inconsistent with the CAF II challenge process" because "it submits new evidence that was not presented to the Bureau." Even with the new evidence, Co-Mo and United had failed to show they offer "the requisite voice service, particularly in census blocks where their own evidence shows they do not have customers," CenturyLink said. In addition, CenturyLink said it believed it would be able to meet its CAF II deployment obligation in Missouri without counting any locations in the challenged census blocks. "Accordingly, even if the Commission grants the Application for Review, it should direct the Bureau not to reduce the amount of CAF II funding for Missouri," it said. "Instead, the challenged census blocks should simply be removed from the list containing CAF II eligible locations while allowing the funding to continue to be used to bring broadband to high-cost areas in Missouri." CenturyLink accepted $77.85 million in CAF II annual support for 2015-2020, its single largest state allotment. "We obviously disagree with CenturyLink," said Randy Klindt, Co-Mo general manager. "We should have won the challenge in the first place. We both have built unsubsidized fiber-to-the-home networks doing gigabit service, and we think it’s a waste of funds to provide CenturyLink with CAF II support in these areas." He also said the companies do provide the requisite voice service over a dedicated link, but CenturyLink was trying to seize on a "technicality" to argue it was "over-the-top service" when it wasn't. Darren Farnan, United's chief development officer, told us he couldn't comment on the CenturyLink filing because he hadn't reviewed it, but he said United's aim was simply to ensure CAF II money was spent wisely in light of the challengers' deployment of fiber networks and gigabit service to rural customers.
The Oklahoma Corporation Commission Public Utility Department is seeking comment on how to resolve problems with special universal services funding from the state USF, the department said in a notice of inquiry earlier this month. The commission is looking for recommendations on payments from the fund that affect telemedicine and Internet access to public schools and public libraries, the NOI said. Some questions ask commenters to address how the school funding should be based, what the target bandwidth for libraries in the state should be, and whether the state should adopt FCC telemedicine values. The commission also is reviewing how to define "public interest," as it can reject a request if there is a lack of it. A hearing is set for Dec. 1.
Rural LECs further disputed FCC data that jeopardized their USF subsidies under a rule that phases out support if carriers face unsubsidized broadband/voice competition in 100 percent of their service areas. At least nine RLECs and only one competitor had reply comments posted in the proceeding in docket 10-90 by Tuesday afternoon (Monday was the deadline). They were responding to initial comments and the commission’s public notice that preliminarily found 15 RLECs appeared to face 100 percent competitive overlap based on broadband provider Form 477 deployment filings (see 1508310052 and 1507300038). All of the RLEC commenters disputed that unsubsidized competitors served all of the locations in their territories, as required under the rule to cut off support.