Comments on wireless Lifeline reconsideration petitions are due Sept. 17, replies Sept. 28, the FCC Wireline Bureau said in a public notice Wednesday in docket 11-42. The bureau said a notice published in the Federal Register had incorrectly stated the deadline for replies. The FCC approved an order in June making targeted Lifeline USF revisions while seeking comment on proposals for broader changes. CTIA's petition asked the commission to reconsider declarations about the scope of its authority under Section 222(a) and Section 201(b) of the Communications Act (see 1508130048).
A federal court suspended its review of an AT&T challenge to a December FCC order on price-cap telco USF obligations. The commission had asked the U.S. Court of Appeals for the D.C. Circuit to hold the AT&T case in abeyance while the agency considers related issues in a USTelecom forbearance petition and two other proceedings, which could render moot or alter the case (see 1507270038). In a brief order on Thursday granting the FCC request pending further order of the court, Judges David Tatel and Cornelia Pillard asked the parties to file motions on future proceedings within 14 days of an FCC decision addressing AT&T's issues in either the USTelecom forbearance proceeding or the two parallel rulemakings, or by Jan. 18, whichever comes first.
More wireless carriers weighed in on Lifeline reform in comments posted by the FCC (see 1509010073) in docket 10-90 Wednesday. Sprint urged the FCC to use a light hand in imposing new regulations as it moves toward new Lifeline rules. “The Lifeline market -- particularly for wireless Lifeline services -- is robustly competitive, with wireless service offers improving significantly and steadily over the past several years even in the face of higher regulatory compliance costs, higher risk, and higher churn,” Sprint said. While the voice-only support amount should remain at $9.25 monthly per line, a $9.25 subsidy for broadband service, with no subsidy for a broadband device, “will be too low to generate a meaningful increase in broadband subscription by Lifeline customers,” Sprint said. Proposals to cap the Lifeline program are “premature” and should be abandoned by the commission, the carrier said. The FCC also “should decline to adopt any proposal to recover program administration costs exclusively from Lifeline service providers,” Sprint said. “As is the case for every other federal Universal Service program, all Lifeline program costs should be recovered through the general USF contribution factor assessed on all contributors.” A group of wireless eligible telecom carriers, each with fewer than 2,000 Lifeline customers, urged the FCC to cut red tape in the program. “Lifeline providers currently face significant regulatory compliance burdens, including monthly reporting (FCC Form 497), annual reporting (FCC Forms 481 and 555), the need to develop and modify Lifeline enrollment forms, the requirement to review and process certification forms and eligibility documentation during enrollment, the need to upload and manage subscriber information in the National Lifeline Accountability Database (NLAD), the requirement to re-certify all of their Lifeline customers each year, and the need to respond to USAC audits including Payment Quality Assurance (PQA) reviews and other inquiries,” they said. While the FCC is recommending some streamlining of the rules, it's proposing additional regulatory requirements, the small carriers said. “This burden falls disproportionately on small carriers, who cannot spread the regulatory costs of Lifeline compliance -- many of which are fixed costs -- across a large customer base.” Carolina West Wireless, Cellular Network Partnership, East Kentucky Network, Pioneer Telephone Cooperative, Union Telephone and Union Wireless signed the filing.
The FCC Wireline Bureau partially granted Lifeline USF appeals by AT&T and Qwest, saying eligible telecom carriers (ETCs) were permitted but not required to seek pro-rata support for subscribers enrolled in the low-income support program for less than a month. After the FCC announced and then backed off plans to require ETCs to seek pro-rata support for partial-month subscribers in 2003 and 2004, AT&T and Qwest (now CenturyLink) in 2008 and 2009 appealed decisions by Universal Service Administrative Co. that said they weren't in compliance because they didn't seek pro-rata reimbursement on FCC Form 497 for months in which they had partial month subscribers. In its order Wednesday, the bureau sided with AT&T and Qwest in finding the pro-rata reporting wasn't required. The bureau said "during the times relevant to the appeals," the commission's rules said USF support to ETCs was to be provided "based on the number of qualifying low-income consumers" they serve. "By basing reimbursement on the number of subscribers served, as opposed to how many days each customer has been a subscriber, section 54.407(a) of the Commission’s rules in effect at the time of the period audited does not clearly require pro-rata reporting," the bureau said.
The 4Q USF contribution rate for carriers will drop to 16.7 percent (from 17.1 percent) of interstate and international telecom revenue, said industry consultant Billy Jack Gregg in his quarterly update Tuesday. Despite projections by Universal Service Administrative Co. that the interstate/international telecom revenue base will decline from $15.046 billion to $15 billion in 4Q, the contribution factor is expected to dip because the previously announced USF demand for the quarter also declined from $2.17 billion to $2.12 billion, said Gregg of Universal Consulting.
State public utilities commissions will encourage build-out of rural broadband networks, after telcos accepted $1.5 billion annually for six years in FCC Connect America Fund money (see 1508280026), said PUC members in recent interviews. South Dakota is a state with a large number of high-cost and ultra-high cost areas, as is Nebraska. Georgia has no ultra-high cost areas, so the build-out will address most of its connectivity issues. Those states all have different approaches to dealing with the areas that remain after the high-cost census blocks are built out. South Dakota isn’t going to intervene, but hopes the companies will get on a roll with the high-cost areas and continue to build out the ultra-high cost areas. Nebraska plans to use the state high-cost fund to build-out the ultra-high cost blocks.
Commenters voiced substantial support for FCC proposals to extend Lifeline USF subsidies to broadband and restructure oversight, with differences over some priorities and many implementation details, including among the Bells. Expanding Lifeline support would boost broadband adoption and shifting administrative responsibility away from telecom providers would increase efficiency, many said in comments in docket 11-42 responding to a Further NPRM (see 1506180029). Some said the FCC should proceed carefully and focus on enforcing budget discipline and streamlining program administration. Monday was the filing deadline for initial comments, but some comments hadn't been posted on the commission’s website Tuesday, while some parties filed comments early (see 1508180069).
The Missouri Public Service Commission expressed concern over the growing burden of the federal USF contribution level, in comments on the FCC NPRM in dockets including 10-90. The state commission recommended the FCC reconsider the income-based eligibility criteria and let states have the discretion to maintain or discontinue the requirements. On FCC consideration of streamlining the eligible telecom carrier designation process, the Missouri commission recommends the process stay the same because of fraud. The Public Service Commission of Wisconsin said the carrier access of Lifeline eligibility requests (CALER) portal, which lets the PSC staff and phone company representatives determine Lifeline program eligibility status electronically, has major limitations that need to be fixed to help with eligibility verification issues in the state. First, verification is possible when the only Wisconsin Department of Health Services database is online and it's reliably online only during normal business hours, the comments said. Second, the CALER interface doesn't allow providers to verify eligibility based on income level or qualification for the Wisconsin Homestead Tax Credit, the PSC said. The deadline for comments was Monday.
A revised Alternative Connect America Cost Model (A-CAM) is available, the FCC Wireline Bureau said Monday in a public notice in docket 10-90. The revised A-CAM contains broadband deployment data from the latest Form 477 filed by broadband providers. The A-CAM is being considered for use by the commission to help determine future USF support under the Connect America Fund for at least some rate-of-return carriers, mostly small RLECs. The bureau also released "results that illustrate how different per-location funding caps used in calculating support impact the potential support calculated for a particular study [coverage] area" served by rate-of-return telcos. The three scenarios the bureau looked at -- all using a funding benchmark of $52.50 -- had per-location funding caps of $200, $215 and $230. A-CAM information is available at a commission webpage.
The FCC will generally calculate price-cap telco transitional USF support using the same time period, regardless of when the carriers made their Connect America Fund Phase II decisions, the Wireline Bureau said Monday in a public notice in docket 10-90. The bureau said under commission rules carriers electing CAF Phase II support in states where that support is less than their CAF Phase I frozen support will transition to model-based support over several years. In addition to their Phase II support, carriers are to receive 75 percent of the difference between Phase I frozen support and model-based support in the first year, 50 percent of the difference in the second year and 25 percent of the difference in the third year, the bureau said. For administrative convenience, the bureau directed the Universal Service Administrative Co. to calculate the transition funding years, starting this year, as running from Aug. 1 through July 31 of the next year, whether the carriers made their Phase II acceptance decisions on the deadline date of Aug. 28 or before (see 1508270068) -- except USAC was directed to make adjustments if necessary for the two carriers that were authorized to being receiving Phase II support prior to its August processing deadline (Frontier Communications and Windstream were the first two).