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.
The FCC Wireline Bureau granted BARConnects eligible telecom carrier (ETC) status in 64 Census blocks in Virginia, clearing a hurdle to the company's participation in a rural broadband experiment funded by USF support. In an order released Friday, the bureau said it would "shortly release a public notice announcing its readiness to authorize rural broadband experiment support for BARConnects as a provisionally selected bidder." The bureau also granted BARConnects a waiver and request for extension of time to file proof of its ETC designation. BARConnects committed to deploying a fiber broadband network with voice service and data speeds of up to 100/25 Mbps, including at least one service plan that offers 25/5 Mbps to all eligible locations, the order said. Monday, the bureau issued an order giving Northeast Rural Services an extension to submit as timely filed a letter-of-credit commitment letter after a May 4 deadline. Due to banking complexities, CoBank didn't issue the commitment letter until June 12, the bureau indicated. The bureau recently authorized NRS to receive about $884,000 to carry out four rural broadband experiments reaching 335 "covered locations" in Oklahoma.
Rural telco groups offered feedback on, without endorsing, a possible "bifurcated approach" to ILEC cost recovery as part of a potential FCC overhaul of rate-of-return USF support mechanisms. In a letter posted Monday in docket 10-90, USTelecom joined by ITTA, NTCA and WTA said the FCC raised the possibility of a bifurcated approach in its June 2014 Further NPRM under which USF support for investments prior to a selected date would be based on old rules and USF support for investments after that date would be based on new rules. "Over time as companies depreciate and retire assets in the old mechanisms and invest in new assets, costs would organically shift from the old to the new mechanism," the groups said. "Companies who have more recently completed construction initiatives with greater debt obligations will transition more slowly than companies who have not made those investments since new assets will have longer remaining lives and the need for subsequent investment is lower." The groups said none of them was yet ready to endorse such an approach generally, or the specific ideas in their submission, but were submitting the comments to further discussion and analysis.
FCC draft orders on pole attachments and USF reverse auctions are circulating, agency officials said Thursday and Friday. A draft order to resolve a challenge to some CenturyLink USF support also is circulating, they said. Meanwhile, a possible draft order on inmate calling service (ICS) rates is still under consideration for the October FCC meeting, said another commission official.
FCC Commissioner Mike O'Rielly called on localities to facilitate wireless tower siting, or face commission intervention to move things along. Speaking at a town hall held by Rep. Dave Brat, R-Va., in Spotsylvania, Virginia, on Wednesday, O'Rielly said the FCC needs to review wireless build-out policies and technical requirements to ensure they encourage network expansion. "Part of this will require cooperation by the local governments," he said, according to written remarks posted Thursday. "The simple fact is that wireless providers are going to need to install thousands of new facilities to provide service. I get the fact that not everyone likes the aesthetics of towers but they are a necessity for wireless broadband. For those local governments that stall or try to block tower siting, know that you will see the Commission step in with appropriate authority to push things forward." O'Rielly also discussed FCC efforts to make more spectrum available and to update USF support for broadband.
The FCC Wireline Bureau denied a motion to extend the reply deadline in its Lifeline USF rulemaking, leaving the date at Sept. 30. In an order issued Wednesday in docket 11-42, the bureau noted it had already granted one extension and said a further extension was "not warranted under the present circumstances." The extension was requested by the National Association of State Utility Consumer Advocates and other consumer groups (see 150918005).
The FCC is expected to take up a controversial privacy NPRM as early as its Oct. 22 meeting, though the proposal may well slip into November, FCC and industry officials said. There were lots of questions about the notice raised at CTIA earlier this month and signs of sharp divisions among commissioners (see 1509110027). Some industry experts predict that the FCC could delve into privacy rules for edge providers like Google, Amazon or Apple, in addition to rules for ISPs.
House Communications Subcommittee Chairman Greg Walden, R-Ore., lauded the approach to USF that FCC Chairman Tom Wheeler laid out in his Monday speech to NTCA (see 1509210029). "This is the right approach," Walden said in a statement Tuesday. "Precious Universal Service dollars should be targeted for communities where investment is lacking. Chairman Wheeler’s decision to move the Connect America Fund forward with a focus on unserved areas will help bring millions of Americans online, including many in Oregon. The Connect America Fund is a tremendous opportunity to lower the communications gap for rural Americans, and with responsible management, we can ensure that ratepayer dollars are spent efficiently in fulfilling the important mission of the USF.”