FCC E-rate changes are working, but this isn't the time for the agency to stop moving forward, Commissioner Mignon Clyburn told the Schools, Health & Libraries Broadband (SHLB) Coalition in a speech Friday. The group understands “E-rate modernization was about far more than just adopting speed targets and revamping a budget,” Clyburn said in written remarks. “I am optimistic, because the FCC remains focused on its objective of ensuring access to world-class digital learning tools -- an objective shared by SHLB and the education community.” Clyburn asked attendees to provide plenty of feedback about how the revisions are working in practice. Also “tell us what we are doing right, because positive feedback is welcome as well,” she said. Clyburn also repeated calls for similar overhaul of the USF Lifeline program. The FCC isn't meeting a congressional mandate to ensure that all Americans, including those with low incomes and in rural and high-cost areas, have access to advanced telecom and information services at affordable prices, Clyburn said. “Lifeline, the only universal service program focused on bridging the affordability gap, remains stuck in an era where leg warmers, stretch stirrup pants, and scrunchies were the fashion craze, and talking on our home telephone or sending a letter through the mail were the main means of communicating.” Lifeline should help people build a better life, she said. The program's goal should be “for it to work so effectively that current subscribers will no longer need Lifeline, or any other federal benefits program,” she said. Industry and FCC officials have predicted Lifeline changes could headline the agency’s June 18 open meeting (see 1505010051). Chairman Tom Wheeler is to circulate draft orders for that meeting Thursday. Wireline Bureau Chief Julie Veach said in a blog post Friday that the FCC has drawn some important lessons from its Low Income Broadband Pilot Program, including lessons for possible Lifeline changes. Among the lessons is that consumers “respond well to having a choice of plans” and all households don’t have the same needs for “data speeds, usage amounts, service type and devices,” Veach wrote. Price matters, even if it is not the only barrier to adoption, and carriers “aren’t necessarily the best” at addressing these barriers, especially “lack of digital literacy and relevance to one's life,” Veach said. There is no “silver bullet,” she said. “While the pilots were focused on different approaches for adoption, let's be clear that Lifeline is focused on ensuring services are affordable, not to solve the broadband adoption challenge,” she said. “As the Commission moves forward to consider how to restructure the Lifeline program for the digital age, the pilot report will help provide useful data for the Commission and public to consider.” The FCC also released the report on the pilot program Friday.
NCTA backs FCC efforts to repurpose USF low-income money to promote broadband adoption by low-income consumers, the association said executives told Office of Strategic Planning Chief Jonathan Chambers and Wireline Bureau officials. Potential barriers are an "overly burdensome" eligible telecom carrier designation process "that could preclude broadband providers from participating in a Lifeline universal service program for broadband," said NCTA in a Wednesday filing in docket 12-23. It said cable operator programs for low-cost broadband to low-income consumers include: Bright House Networks, Cox Communications, Eagle Communications, Mediacom and Suddenlink's Connect2Compete; Comcast's Internet Essentials; and Midcontinent’s Broadband Lifeline Assistance program. Commissioners may vote on a Lifeline reform NPRM at their June 18 meeting (see 1505010051).
The FCC has much left to do to overhaul USF funding and intercarrier compensation (ICC), panelists said at an FCBA seminar Wednesday on reforms since the 2010 National Broadband Plan (NBP). High-cost USF support for generally small, rural rate-of-return carriers and Lifeline USF await major changes, they said. Overhaul of high-cost support for larger price cap carriers and E-rate support for schools and libraries are further along, but questions remain; and numerous ICC disputes continue to bubble, panelists said.
A U.S. Court of Appeals for the D.C. Circuit panel on Friday dismissed Global Crossing's legal challenge to a 2012 FCC order under which the company was to pay an additional $4.34 million into the USF contribution system. The panel issued a dismissal judgment rather than an opinion because it found it had no jurisdiction over Global Crossing's petition for review. The panel said it could review only final FCC orders, and this one was an interlocutory order remanding an audit to the fund's administrator. The administrator lowered Global Crossing's payment obligation from an original $5.6 million under the audit to $4.34 million and "could have imposed zero contribution liability on Global Crossing," the panel said. "Such an outcome would clearly obviate the need for judicial review. Indeed in that event petitioner would lack standing to challenge the order," the panel found.
Prodded by the FCC, telco groups are making progress but have yet to reach consensus on proposals to overhaul universal service funding for rate-of-return carriers, industry representatives told us Friday. The groups are due to provide FCC officials this week with a status report on their efforts to coalesce around a common approach for reforming USF mechanisms that provide up to $2 billion in annual subsidies for generally smaller, rural rate-of-return carriers, the representatives said.
Hughes Network Systems lobbied the FCC to back its proposal for Connect America Fund Phase II recipients of USF money for broadband to meet a test that doesn't favor any platforms while ensuring the services have low latency. It would measure if the services “'offer sufficiently low latency to enable use of real-time applications, such as VoIP' while remaining consistent with the Commission’s commitment to technological neutrality," the satellite broadband provider said in a filing posted Tuesday in docket 10-90, referring to its March 27 proposal in that docket. During a lobbying meeting last week with Wireline Bureau front-office and other staff, a lawyer at Hughes parent EchoStar, which shares with Dish Network Charlie Ergen as chairman and a top shareholder, also asked the agency to "without delay" adopt Remote Areas Fund rules, the newer filing said. After telcos decide whether and how much CAF Phase II funds to get out of a total of up to $10 billion over six years, the FCC can award USF money to other companies (see 1504290066).
Net neutrality was just one of many topics before the Senate Appropriations Financial Services Subcommittee during a Tuesday hearing, which featured FCC Chairman Tom Wheeler and Republican Commissioner Ajit Pai. Senators focused on USF overhaul issues just as lawmakers in the House and Senate pushed for stand-alone broadband support, as expected (see 1504210033). Subcommittee Chairman John Boozman, R-Ark., told us after the hearing that his two big concerns with the FCC's FY 2016 budget request, an increase of about $50 million over its current budget, remain “the moving expense” associated with the FCC’s headquarters relocation and the FCC’s use of $25 million from the USF for administrative purposes.
Changes to the FCC’s E-rate program have worked, as evidenced by the level of interest being shown by schools and libraries, FCC Chairman Tom Wheeler said Monday in a blog post. Changes to the USF program “will only have their intended impact if schools and libraries step up to take advantage of new opportunities,” he said. “Early indications are that they are up to the challenge.” Applications are in for E-rate funding for the coming school year and schools and libraries have asked for a total of $3.9 billion in support, including more than $1.6 billion for internal Wi-Fi networks, he said. “These requests reflect long pent-up demand,” he said. “It is the first time in three years that E-rate has had any funds available for Wi-Fi at all. In the past, many schools and libraries didn't bother to apply for Wi-Fi funding because they had no hope of getting funds. That is no longer a problem.”
The FCC rejected the requests by Alaskan telco Adak Eagle Enterprises and subsidiary Windy City Cellular for a waiver of its universal service funding caps. In a 14-page order approved 5-0, commissioners found AEE/WCC provided "no basis" for relief despite arguments WCC could go bankrupt without more support. In a 2012 order, the Wireline and Wireless bureaus found AEE/WCC had unjustified costs and denied their waiver from a $250/line monthly high-cost support cap imposed under the 2011 USF/intercarrier compensation reform order, though it granted a temporary extension of their previous interim monthly support levels of $33,276 and $40,104 to give the companies time to adjust and avoid service disruptions. AEE/WCC filed a petition for reconsideration and application of review in 2013 seeking above-cap support levels, triggering a lengthy FCC revenue proceeding during which further temporary extensions of interim support were granted. In Thursday's denial, the full commission found AEE/WCC "continued to have excessive and unreasonable expenses." The commission upheld a bureau finding that WCC was not the only voice provider on a significant portion of Adak Island due to the presence of GCI, an alternative provider. It said AEE and GCI provide voice support to those areas of Adak Island where the vast majority of people live. The commission disputed AEE/WCC's contention that the bureau determination was based on promises of future service, concluding that it was based on "current and actual" service. The FCC acknowledged AEE/WCC's claim that without further support it could discontinue service at one cell site, causing some consumers to lose coverage in that area, but it said some trade-offs were needed to ensure USF support was used "efficiently" to expand overall national coverage to as many people as possible. "It is not a guarantee of support ... for every cell site," the order said. The agency acknowledged AEE/WCC's warning that WCC could go bankrupt without higher support, but said it couldn't justify a waiver based on such a threat. Commissioners Mignon Clyburn and Mike O'Rielly issued a joint statement recognizing that "serious questions remain" despite the extensive record, but said that without "sufficient answers" the agency could not provide a waiver. "Rather than prolong this already lengthy inquiry, it is important to provide a response," they said. "We are very mindful of the potential impact on residents of Adak, but there is no evidence that they are at risk of losing access to communications services." A lawyer for the company had no immediate comment.
Frontier Communications has invested nearly $100 million in its Pennsylvania operations since 2011, including approximately $20.5 million in 2014, bringing broadband to all its customers in the state, said a Thursday news release. In 2015, Frontier is positioned to receive funding from the FCC, the company said. The program is poised to open in the latter half of the year and will provide funds over a six-year period, Frontier said. The telco would get as much as $1.7 billion over the program under Phase II of the USF Connect America Fund (see 1504290066).