TracFone resisted AT&T Lifeline proposals for the FCC to overhaul the USF support program for low-income consumers. TracFone opposed AT&T suggestions that carriers be removed from all Lifeline enrollment functions and that eligibility be initially tied solely to the federal food stamps program, which TracFone said would have a “devastating impact on Lifeline availability.” The comments came in a response posted Tuesday to a Nov. 23 AT&T filing flowing from an NPRM (see 1506180029). Other parties filing recently in docket 11-42 included the Cherokee Nation, Incompas, Lifeline Connects Coalition and Smith Bagley, with many comments addressing proposed minimum service standards for Lifeline broadband/voice coverage.
The regulatory fee battle raged as the American Cable Association and ITTA urged the FCC to shift some fees from wireline to wireless companies, while CTIA opposed that. CTIA also opposed NAB’s proposal to reapportion regulatory fees to the wireless sector because of the planned incentive auction, which will allow wireless providers to bid for broadcast TV spectrum. ACA and CTIA filed reply comments (here and here), while ITTA made an ex parte filing this week in docket 15-121 on a recent meeting with FCC officials. NAB met with officials last week to discuss its proposal (see 1512030061).
The FCC Wireline Bureau gave an interim USF waiver extension to Allband Communications Cooperative. In an order released Monday and included in Tuesday's Daily Digest, the bureau extended by six months Allband's waiver to continue to receive the lesser of high-cost USF support based on its actual costs or the annualized total high-cost support that it received in the first six months of 2012. The bureau gave Allband a three-year waiver in July 2012, and in December 2014 Allband filed a petition for a further, 12-year waiver. In June of this year, the bureau extended the original waiver until the earlier of Dec. 31 or until action is taken on its 12-year waiver request.
FCC efforts to overhaul Lifeline USF mechanisms could run into trouble in Puerto Rico, said a filing by Connected Nation's chief policy counsel on a meeting the chairman of the Telecommunications Regulatory Board of Puerto Rico, two advisers and the counsel had with FCC officials. Lifeline modernization is important for Puerto Rico, which has a broadband adoption rate of 48 percent that is "far lower than any state," the filing said. Only five metropolitan areas in the U.S. have home broadband adoption rates below 50 percent, and three of those are in Puerto Rico, the filing said: "We emphasized strongly that proposed limitations on the eligibility of low-income consumers use to qualify for the program would be devastating for Puerto Rico and create enormous 'qualification gaps,' due to the fact that federal nutrition assistance, school lunch, and other federal assistance programs operate differently in Puerto Rico. The Commission’s effort to modernize Lifeline will not succeed if it does not succeed in Puerto Rico," said the filing, posted Thursday in docket 10-90.
The USF contribution factor will jump to 18.2 percent in Q1, from this quarter's 16.7 percent, said industry consultant Billy Jack Gregg in an update Thursday. He said the Universal Service Administrative Co. projected industry long-distance telecom revenue for Q1 at $14.93 billion, about $72 million less than in the current quarter. Combined with projected USF demand of $2.277 billion, the revenue decline caused the industry contribution (assessment) factor to spike, he said. "The drop in first quarter 2016 revenues continues the downward trend in the USF contribution base, which places upward pressure on the USF assessment factor." Gregg recently said the contribution factor could top 18 percent for the first time, depending on the projected revenue (see 1511030037).
FCC Wireline Bureau Chief Matt DelNero outlined nine key proceedings his bureau is working on, though he said the list isn't exhaustive. First on his list is a draft order that would partially approve a USTelecom forbearance petition for ILEC relief, which is on the commission's Dec. 17 tentative meeting agenda. Speaking at the Practising Law Institute conference Thursday, DelNero said he is personally involved every day in working on separate efforts to overhaul rural rate-of-return USF mechanisms. Asked about the timetable in light of signals from a key senator that the FCC could go beyond a year-end commitment for solving the "stand-alone broadband problem" for rural carriers, DelNero said the agency is eager to complete the rulemaking but also wants "to get it right." He also invited interested parties to provide input on commission efforts to craft an NPRM on broadband privacy under Title II of the Communications Act. Among the other draft items in proceedings he cited are: a Connect America Fund Phase II reverse auction framework order, which is circulating; an order to reform Part 32 accounting rules; the 2016 broadband progress report; a Lifeline modernization order; special-access reform actions; and orders on industry transactions, including Charter Communications' proposed buys of Bright House Networks and Time Warner Cable, and Altice's proposed buys of Cablevision and Suddenlink. On a subsequent panel at the conference, a Netflix official sparred with officials of CenturyLink and Cox Communications over the net neutrality order. Corie Wright, Netflix director-global policy, said she believes the FCC would be upheld in court, as did Washington Utilities and Transportation Commissioner Phil Jones. Jennifer Hightower, Cox senior vice president-law and policy, said the net neutrality order is discouraging broadband investment and that her company is "more cautious than ever" due to uncertainty from the order. Melissa Newman, CenturyLink senior vice president-federal policy and regulatory affairs, agreed, saying her company doesn't know what is allowed under the Internet conduct rule's prohibitions against broadband ISP practices that create "unreasonable interference" or "unreasonable disadvantage" for other parties. Wright disputed the criticisms, which she said were contradicted by the statements and actions of industry executives and Wall Street investors. Jones also said he hadn't seen any drop in broadband investment in his state.
The FCC said its Oklahoma tribal guidance for Lifeline USF shouldn't be stayed, pending further review. In a June order, the commission announced that effective Feb. 9, it will view an 1870-1890 historical map of Oklahoma, "which is the most accurate available representation" of former tribal boundaries in the state, as the basis for identifying former reservations, while continuing to consult with Oklahoma tribal nations on the map, said the FCC's opposition to the partial stay request of Assist Wireless in the U.S. Court of Appeals for the D.C. Circuit (Assist Wireless v. FCC, No. 15-1324). Petitioners don't "challenge the substance of the FCC’s interpretive guidance or the accuracy of the Oklahoma Historical Map; they instead challenge the Order on procedural grounds only," the FCC said. "But Petitioners’ legal arguments are insubstantial, and they have not shown that they are likely to prevail. Nor have they demonstrated that allowing the FCC’s interpretive rule to go into effect as planned would cause them any irreparable injury. And delaying implementation of this guidance would only harm the public by allowing public funds to subsidize areas that should not be eligible for enhanced Tribal Lifeline benefits." Carriers receive a higher monthly subsidy ($34.25) for serving low-income Lifeline users in tribal areas across the country, including former tribal areas in Oklahoma, than for serving those in other areas ($9.25).
Senate Commerce Committee Chairman John Thune, R-S.D., is willing to give the FCC extra time to make broad changes to rural rate-of-return USF mechanisms, Senate and FCC sources told us Monday. FCC commissioners had committed to Thune earlier this year that they would act by year-end to fix the “stand-alone broadband problem,” which prevents rate-of-return carriers from receiving USF support for broadband customers using other providers for voice service. FCC Chairman Tom Wheeler said recently he intended to circulate in December a draft item to address the rural USF issues more broadly but said he wouldn’t be “held hostage to the calendar” (see 1511190057).
The FCC plans to vote Dec. 17 on a draft order on USTelecom's forbearance petition, as expected (see 1511240070). The meeting's tentative agenda released Wednesday also included a draft order to streamline Part 25 rules for satellite space stations and earth stations. The two items are part of an ongoing effort to reduce "regulatory delay and burdensome red tape," Chairman Tom Wheeler said in a blog post.
The Senate Commerce Committee will likely vote on FCC Commissioner Jessica Rosenworcel’s renomination next month during a markup session, a GOP committee staffer confirmed Monday. Rosenworcel's renomination hearing was Oct. 28. Commerce Committee Chairman John Thune, R-S.D., told us last week he was unsure if Rosenworcel would make it onto the December markup agenda but said she's empowered as commissioner for another year absent congressional action (see 1511190038).