Senate Commerce Committee Chairman John Thune, R-S.D., probed FCC members on possible rate regulation under Communications Act Title II reclassification at a Wednesday oversight hearing. “Let’s just say hypothetically that someone files a complaint at the FCC alleging” rates aren’t just and reasonable under Title II Section 201, Thune said, suggesting it could mean possible rate regulation. “That is absolutely right,” Commissioner Ajit Pai said, saying it “opens the door” to “ex post rate regulation.” Commissioner Jessica Rosenworcel said there has been no such complaint.
A draft version of FCC reauthorization legislation would cap the USF at $9 billion a year and freeze FCC funding at its current level for the next four years. House Communications Subcommittee Chairman Greg Walden, R-Ore., circulated the draft Tuesday, including it in the GOP memo for an FCC oversight hearing Thursday with all five commissioners. The reauthorization bill would let the agency adjust its fee schedule and would remove the FCC chairman’s ability to hire or fire its inspector general. “With this reauthorization, we are charting the course to make the necessary reforms to an agency that is ill equipped for the innovation era,” Walden said in a statement. “This bill addresses the commission’s disproportionate FY 2016 budget request, the runaway growth in the Universal Service Fund, and ensures that the FCC’s Inspector General can conduct oversight of the commission without fear of reprisal from a chairman.” The FCC requested $388 million for FY 2016, more than $50 million more than current funding. The GOP memo pointed to net neutrality, customer proprietary network information enforcement action, pre-emption of state municipal broadband restrictions, unfinished dockets, use of delegated authority and transparency as core areas that GOP lawmakers worry about. The memo cited “concerns” with recent testimony from FCC Managing Director Jon Wilkins -- “Mr. Wilkins was unable to provide details on the planned closures and staff re-organization of the field offices. Recent reports from the field indicate that the Commission is planning significant structural changes to its Enforcement Bureau. The Committee is concerned that transparency problems extend further into the budget request.” Wilkins testified that the FCC needs more money for “unavoidable costs” in moving its headquarters and for IT upgrades (see 1503040032). The FCC would receive $339.8 million each year through FY 2020, the draft text said. Walden’s hearing will be Thursday at 11 a.m. in 2123 Rayburn. The FCC declined comment.
Sen. Kelly Ayotte, R-N.H., reintroduced legislation “to provide for the equitable distribution of Universal Service funds to rural States,” as its longer title said. Last Congress, Ayotte introduced the USF Equitable Distribution Act of 2013 (S-1766), which would have ensured that not less than 75 percent of the interstate telecom USF contributions in rural states stay within that state. It never advanced. Ayotte introduced S-734 Thursday. It has no co-sponsors and has been referred to the Commerce Committee, where Ayotte is a member. Its text is not yet online.
Telecom deregulation advocates are following up recent successes in four states that passed statutes deregulating aspects of wireline and VoIP services by renewing their push for passage of similar legislation in the Idaho and Minnesota legislatures. Both states are considering bills that would prohibit VoIP regulation: Idaho’s S-1105 and Minnesota’s HF-776/SF-895. Minnesota is also considering HF-1066/SF-736, legislation that would let ILECs be regulated the same as CLECs. None of those bills advanced as far as statutes that passed or were enacted in Kentucky, North Dakota, Pennsylvania and West Virginia. Thirty-two states deregulated wireline service by the end of December, while three others and the District of Columbia significantly limited wireline oversight, said National Regulatory Research Institute Principal Researcher Sherry Lichtenberg.
Explaining why the net neutrality order released publicly Thursday is 400 pages, a senior FCC official told reporters that the agency wanted to deal with points raised by critics and commenters because it fully expects the order to be challenged in court.
The FCC has not only “failed to pursue meaningful solutions” to making sure broadband is being deployed in a timely and reasonable fashion, but exacerbated the problem by “arbitrarily raising” the broadband benchmark speed and imposing Communications Act Title II regulation on broadband in the net neutrality order, NCTA said in comments filed Friday. Responded to the agency’s January notice of inquiry (see 1501290043) on improving broadband deployment, the comments hadn't been posted in docket 14-126. USTelecom also filed comments on the NOI Friday, which, according to its blog, focused on removing “outdated legacy regulations” and “restrictive local rules and regulations.” The commission failed to “effectively implement many of its own prior recommendations,” including adding broadband to Lifeline and implementing the Remote Areas Fund (RAF) to deploy broadband to unserved areas, NCTA said. The commission should immediately revoke offers to ILECs for high-cost USF support that don't meet the new 25 Mbps download/3 Mbps upload standard, it said. The funding should be offered on a competitively neutral basis to any qualified broadband provider willing to provide the new speed, NCTA said. The agency should also implement the RAF and issue an NPRM to create a broadband Lifeline program, the filing said. An independent third party should also examine why there hasn’t been more progress extending broadband deployment to unserved areas, even though more than $28 billion in federal funding has been spent on the goal since 2010, the filing said. USTelecom urged the agency to grant its October 2014 forbearance petition (see 1410070050), reforming state and local regulations “that impede a provider’s ability to roll out broadband services,” and ensure that broadband providers can deploy fiber in multi-dwelling units. The FCC should “promote efficient and carefully targeted broadband deployment in rural areas” through the Connect America Fund and develop “’sooner rather than later’ a long-term universal service solution for rate-of-return carriers,” USTelecom said.
The FCC should reconsider its Feb. 3 policy statement creating treble damages in calculating fines for violations of federal payment rules, said Comptel, CTIA, NCTA and USTelecom in a joint petition Friday that also seeks a stay. The policy statement makes a “substantial rule change” affecting the USF, Telecom Relay Service Fund, local number portability, North American Numbering Plan and regulatory fee programs, USTelecom said in a blog post. The commission didn't follow proper notice and comment requirements, USTelecom said. Tripling damages is “’arbitrary and capricious,’” it said.
A little-noticed provision in the FCC net neutrality order (see 1502270045) would let small rural broadband providers opt to continue to be partially regulated under the old Communications Act Title II rules instead of the order’s “light-touch” version that forbears from several provisions of the section, the agency and attorneys representing the providers told us. The providers and groups like NTCA and the National Exchange Carriers Association lobbied for the provision, fearing a change in their classification could jeopardize their eligibility to receive USF support for providing telecom service, said Michael Romano, NTCA senior vice president-policy, and Jeffrey Dupree, NECA vice president-government relations. Continuing to be under the old Title II rules also would not weaken what the providers can count under rate-of-return rules.
House Communications Subcommittee lawmakers grilled FCC Managing Director Jon Wilkins Wednesday at an FCC reauthorization hearing. Wilkins said the agency sought to be nimble and use its resources well in its $388 million budget request for FY 2016, more than $50 million more than what it received the previous year. Much of the money would go toward both modernizing the agency’s information technology and its move away from or restacking of its headquarters at the Portals, Wilkins said, as expected (see 1503030053).
The Senate may take the lead on the video overhaul component of a Communications Act overhaul, House Communications Subcommittee Chairman Greg Walden, R-Ore., said Wednesday at the American Cable Association summit. ACA President Matt Polka stressed the importance of Local Choice, a broadcast a la carte proposal that failed last Congress. Senate Commerce Committee Chairman John Thune, R-S.D., was a backer and “remains interested in moving forward,” Polka said in a conversation with Walden. “[Local Choice] puts consumers in control compared to current retrans laws, which gives them no choice at all.”