ASPEN, Colorado -- NCTA Executive Vice President James Assey tore into what he sees as many problems with how the federal government subsidizes competition, which he believes creates problems for the big cable operator incumbents that belong to his association. During the Technology Policy Institute’s conference, he and other panelists on Tuesday debated what overhaul to USF and other subsidies may be needed.
CenturyLink plans to cut its workforce by about 1,000, the company confirmed Friday in an emailed statement. "After careful consideration, CenturyLink has made the difficult decision to reduce its workforce," the statement said. "This includes current positions as well as not backfilling open positions." Affected employees will receive severance packages and assistance to find new jobs, including within the company. "Additional steps will include minimizing the number of contractors we work with, reducing travel expenditures and further reductions of non-employee-related expenses." CEO Glen Post said on an Aug. 5 analyst call that CenturyLink was planning a "reduction in the number of employees" to cut costs, according to a transcript of the call. On that call, Chief Financial Officer Stewart Ewing said CenturyLink estimates it will take at least $300 million of the $514 million in annual USF support it's eligible for under the FCC's Connect America Fund Phase II. CenturyLink is continuing to evaluate whether to take more than that and expects to notify the FCC of its final decision on or before an Aug. 27 deadline for price-cap telcos, the company said in a separate emailed statement. Ewing said the $300 million would go to about two dozen states where CenturyLink serves high-cost areas and it's studying whether to take the CAF II subsidies in another 11 states. If the telco doesn't accept the CAF II support there, Ewing said the company could continue to receive about $100 million in USF "frozen support." He said the FCC is unlikely to write rules before late 2016 or maybe 2017 for a reverse auction in areas where price-cap carriers don't accept CAF II money.
Some state telecom associations, especially those representing rural telcos, said they are struggling with increased federal intrusion into areas that have traditionally been under state jurisdiction. Such overreach is the main reason one of the two rural telecom associations in Montana -- the Montana Independent Telecommunications Systems (MITS) -- chose to disband at the end of the month after 22 years, said state Public Service Commission Chairman Brad Johnson. That type of intrusion has been noticed less in states such as Kentucky, where an association is going strong and continues to advocate for members and figure out how to deal with FCC orders.
Frontier will deliver broadband with speeds of 25 Mbps for downloads and 2-3 Mbps for uploads to an additional 750,000 households across its entire footprint by the end of 2020, CEO Daniel McCarthy told FCC Chairman Tom Wheeler in a letter posted Wednesday in docket 15-44 on the company's planned buy of Verizon wireline systems in California, Florida and Texas. The FCC's general broadband ("advanced telecom capability") definition is 25/3 Mbps, though it's only 10/1 for telcos using USF subsidies to serve high-cost rural areas. McCarthy said the deal presented new broadband opportunities and would build on its previous takeover of Verizon wireline systems in 14 states, where he said Frontier met its broadband commitments. "Over the last five years we have invested heavily in broadband infrastructure and I commit to continue that investment," he said. McCarthy said the new deployment will be coordinated with the company's efforts to expand broadband to 650,000 households and businesses in rural areas backed by USF support from the FCC's new Connect America Fund. "While this commitment is aggressive, we have spent the last five years building out our network and identifying ways to achieve high speeds over our copper loops for our rural customer base," he said.
Rural telco groups presented FCC officials with a bevy of potential "technical assumptions" for implementing an overhaul of rate-of-return carrier USF support mechanisms. Representatives of the Independent Telephone and Telecommunications Alliance, NTCA, USTelecom and WTA said that none of their associations were ready to endorse the assumptions they outlined to the FCC in a document, but they were submitting them to help in the identification and discussion of issues that may need further examination and resolution. "This approach has not been fully defined or modeled, and thus does not represent a fully-formed proposal that has been vetted by or is necessarily supported by industry representatives; some of the associations also have continuing questions and some concerns about issues that may arise in connection with such an approach," the groups said in a USTelecom filing posted Tuesday in docket 10-90. Derrick Owens, WTA vice president of government affairs, told us that the assumptions incorporated feedback from FCC officials, and are to be used to generate projections for rural telco funding under proposed USF changes. "The idea is to see what the effects are for the companies and the fund in general, and to see what other issues will pop up that need to be addressed," he said. The groups in May proposed a two-track overhaul of rate-of-return USF that would create a voluntary model-based approach and revise existing USF mechanisms to support stand-alone broadband, but many details remain in play (see 1506030052 and 1506040028).
Comment deadlines in the Lifeline USF Further NPRM were extended a couple of weeks, said an order issued by the FCC Wireline Bureau Wednesday in docket 11-42. Initial comments had been due Aug. 17, replies Sept. 15, but telecom trade groups and state parties asked for 30-day extensions (see 1507310061, 1508030067 and 1508040031). Bureau Chief Matthew DelNero said an extension was warranted, given the requests and the "breadth and complexity" of the second Further NPRM aimed at revamping the Lifeline program for broadband coverage and administrative restructuring. But he said the bureau was granting just a 14-day extension for initial comments until Aug. 31 and a 15-day extension until Sept. 30 for replies because it was committed to acting "in a timely manner." The "limited" extensions "will allow for more thoughtful consideration of the issues raised in the Second FNPRM, while at the same time not unduly delaying the resolution of these issues," he said.
Windstream will accept $174.9 million in annual USF support to provide broadband speeds of at least 10/1 Mbps to more than 400,000 rural locations in 17 states utilizing the FCC's new Connect America Fund, the commission and company announced (here and here) Wednesday. Windstream was eligible to receive $178.8 million in annual support. “Windstream’s decision to accept support from the Connect America Fund will greatly benefit its rural customers by expanding robust broadband in their communities,” said FCC Chairman Tom Wheeler. The FCC offered price-cap telcos a total of $1.675 billion in annual Phase II CAF support over six calendar years (2015-2020). Frontier previously said it would accept its entire $283.4 million share. Other carriers have until Aug. 27 to make their decisions. Carriers receiving CAF support must build out 10/1 Mbps broadband to 40 percent of funded locations by the end of 2017, 60 percent by the end of 2018, and 100 percent by the end of 2020, the FCC said.
The National Association of State Utility Consumer Advocates became the fifth party to ask the FCC to extend the comment period on proposals to overhaul the Lifeline USF support program to cover broadband and restructure its administration. Initial comments are currently due Aug. 17, replies Sept. 17, NASUCA said in a motion posted Tuesday in docket 10-90 asking for an extension to Sept. 16 and Oct. 19, because the issues addressed in the NPRM are a "sea change for the Lifeline program" and "are extremely complex and vitally important" to telecom customers the group represents. "There are literally hundreds of questions covering nearly every conceivable aspect of designing a Lifeline program for broadband, and many of the issues also affect the Lifeline program for voice services," said NASUCA, saying many key staffers would be on pre-scheduled family vacations. Previously, CTIA, the ITTA, USTelecom and California Public Utilities Commission asked for 30-day extensions (see 1507310061 and 1508030067).
The California PUC asked the FCC for a 30-day extension to file comments on Lifeline USF overhaul proposals, adding to the joint call by three telco trade associations on Friday for such an extension (see 1507310061). The current deadlines are Aug. 17 for initial comments and Sept. 17 for replies, the CPUC said. The CPUC said in a filing posted Monday to docket 11-42 that it needed more time because it runs a Lifeline program that's more comprehensive than the FCC's, "and is accordingly, more complicated to manage." The CPUC also said it needed more time to write comments on the potential interplay between the federal and California Lifeline programs. CTIA, ITTA and USTelecom said an extension was warranted because of the complexity of the FCC proposals to cover broadband and restructure the program's administration, and because the initial comment deadline fell in the middle of the traditional summer vacation period.
USTelecom, CTIA and the Independent Telephone & Telecommunications Alliance asked the FCC to extend the comment deadlines by 30 days in the rulemaking to revamp Lifeline USF subsidies to cover broadband and make administration of the program more efficient. Instead of initial comments being due Aug. 17 and replies Sept. 15, they would be due Sept. 16 and Oct. 15, the telco associations said Friday in their request. The groups said the extension was warranted because the reform proposal was "unusually complex" and the current initial deadline fell during the traditional summer holiday period.