FCC Commissioner Ajit Pai proposed adapting rate-of-return USF support to broadband while allowing rural carriers to voluntarily opt into model-based support, but not at the expense of a near-term fix he sees as more urgent. Pai issued a statement Monday that proposed focusing on "targeted" rule changes to solve "the standalone broadband problem," in which generally smaller rate-of-return rural LECs can lose USF support if customers drop voice service. Groups representing RLECs welcomed Pai's proposal, which came after FCC Chairman Tom Wheeler Friday appeared to issue a warning to RLECs about the absence of more telco consensus (see 1506260024).
T-Mobile asked the FCC for an extra year to complete network deployment in one census tract where it received USF Mobile Fund Phase I support. In a request for waiver and extension filed Thursday in docket 10-208, T-Mobile asked that a June 25 deadline be pushed back until June 25, 2016, to complete construction for the Census tract in Pike, Pennsylvania. It also sought a waiver and extension so it wouldn't be required to repay the Mobile Fund support it has received for that tract or to make an "additional performance default payment." T-Mobile said it had finished construction in 16 of the 17 tracts where it was the winning bidder in the Mobile Fund reverse auction. Low bids generally win. T-Mobile "also has completed construction of a mobile network in the PA Census Tract, but the special and challenging nature of the local terrain in that area has resulted in drive test results showing less coverage than required by the Commission’s construction milestone (i.e., less than 75 percent of the road miles covered)," it said. "This shortfall has resulted despite T-Mobile’s thorough planning and use of propagation studies to design the network. While T-Mobile has taken steps to improve and optimize the level of coverage in the PA Census Tract, the company has been unable to produce results that meet the Commission’s requirements."
State policymakers must continue to address how to ensure communications services are available and affordable for consumers so industry can adapt and bring everything into the now broadband-focused playing field, USF experts said in interviews Friday. A white paper, released Friday, by Sherry Lichtenberg, National Regulatory Research Institute principal researcher, said state USF support includes high-cost support, funds for broadband access for schools and libraries, funding for Lifeline and dedicated broadband funding. A key finding in the review is the limitation on high-cost support for areas where competition has driven down the cost of service, reducing the need for support, Lichtenberg said.
Chairman Tom Wheeler said the FCC would offer its own rate-of-return USF overhaul plan absent rural LEC industry consensus, expects to move an Internet video program-rights order and a broadband privacy NPRM this fall, and would hold the broadcast incentive auction in Q1. Offering a broadband overview at the Brookings Institution Friday, Wheeler said the FCC would continue to protect and promote competition but wouldn't require "network unbundling." He also said many telco and cable providers continue to invest despite the threats of "a few big dogs" to "starve investment" due to the recent broadband reclassification. Wheeler's speech largely tracked prepared remarks.
Many Americans, especially African-Americans and Hispanics, are still struggling to find jobs, but broadband offers some hope, said Ralph Everett, senior fellow at Georgetown University’s Center for Business and Public Policy, in a white paper. Everett said the USF Lifeline program can help. “The FCC’s Lifeline program, if updated to cover broadband, can help ensure that young students and other lower income Americans can fully participate in the 21st century economy,” he said. But changes are needed. Lifeline “needs to be revised so that consumers are empowered to decide for themselves what communications services best meet their needs, and are provided the financial assistance to take advantage of this right to choose,” he wrote. “In addition, and this is critical to success, the program must be reformed to wring out waste, fraud, and abuse in order to maximize the dollars available to those who qualify for assistance.”
The FCC Wireline Bureau published a list of census blocks deemed "extremely high-cost" for USF support purposes in areas served by price-cap telcos, in a public notice Tuesday. The census blocks are generally not eligible for Connect America Fund Phase II model-based support, the notice said, but price-cap telcos accepting such support in a state can substitute the identified locations in lieu of those in other census blocks to meet their broadband deployment duties in a state, provided that the total number of locations served is larger than or equal to the number of locations in eligible census blocks that must be served under the duties. The list includes 151,505 extremely high-cost census blocks with varying numbers of locations. (There are more than 11 million census blocks in the U.S., said a Census Bureau Web page). Extremely high-cost census blocks that aren't targeted for CAF Phase II broadband deployment will be included in the Phase II reverse auction the FCC expects to hold some time after carriers decide whether to accept support, the notice said. Those decisions are due Aug. 27, but Frontier already has announced it will accept all $283.4 million in annual support it was offered by the FCC (see 1506160039).
The FCC released the Further NPRM and order Monday aimed at moving Lifeline USF (see 1506180029) toward supporting broadband, improving oversight and combating abuses. The 143-page text spells out the FCC's proposals and the actions it's taking "to rebuild the current framework of the Lifeline program and continue our efforts to modernize the Lifeline program so that all consumers can utilize advanced networks." The FCC is taking steps "to promote accountability and transparency for both low-income consumers and the public at-large, and modernize the program," the text said. "Our efforts in this Second Further NPRM and Report and Order are consistent with the Commission’s ongoing commitment to monitor, re-examine, reform, and modernize all components of the Fund to increase accountability and efficiency, while supporting broadband deployment and adoption across the Nation."
The U.S. Court of Appeals for the D.C. Circuit ruled against AT&T Tuesday, reversing a lower court dismissal of a False Claims Act lawsuit alleging the carrier fraudulently overcharged schools and libraries that passed their costs along to the FCC E-Rate subsidy program (USA ex rel. Todd Heath v. AT&T, No. 14-7094). The three-judge panel remanded the case to the U.S. District Court in Washington, D.C., for further proceedings on the merits of the case.
In adopting a Lifeline USF order Thursday, the FCC backed off a staff proposal to increase the general record-retention requirements of Lifeline USF providers from three to 10 years, agency officials said the next day. But the commission in a 3-2 vote (see 1506180029) adopted new rules requiring providers to retain customer eligibility documentation. In a VoIP numbering order also adopted Thursday, the FCC didn't adopt Level 3 proposals to firm up CLEC access charge rights when VoIP providers gain direct access to phone numbers, agency officials said. The FCC staff and Level 3 proposals drew objections from the regional Bells in the days before the vote.
Hill Republicans lashed out at the FCC’s Thursday expansion of the Lifeline program. One prominent Senate critic introduced legislation, the second piece on Lifeline that he has dropped in two weeks. The Ending Mobile and Broadband Welfare Act would prevent the FCC from expanding Lifeline to cover broadband service and end Lifeline's wireless support.