The Q3 USF contribution factor would grow to 24.4 percent, its highest ever, under an FCC proposal in Thursday's Daily Digest and on docket 96-45. The USF contribution factor rose above 20 percent for the first time in Q4 (see 1809120035). Some advocates for the USF urged the FCC to find new sources of contribution to help sustain the program (such as from fees on broadband service) since revenue from interstate telephone charges continues to decline (see 1904020022). The prospect of ever-rising consumer fees played into a recent NPRM on an overall budget cap for the USF program (see 1905310069). The new contribution factor rate for Q3 would be set within 14 days of the announcement without further action from the agency, said an Office of Managing Director public notice.
The 1996 Telecom Act set mandates for ILECs to open networks to competitors, but incumbents say enough competition exists for the FCC to grant USTelecom's petition for forbearance from a requirement to provide unbundled network elements (UNEs) to competitive LECs. At minimum, ILECs seek forbearance wherever there is evidence of facilities-based market competition, such as from a cable provider. CLECs said they still need UNE access (see 1905140012). All sides told us recently to expect the FCC to act soon.
Six rural carriers are asking the FCC for a one-time waiver of penalties for their failure to report geocodes and other location information into Universal Service Administrative Co.'s high-cost universal broadband (HUBB) portal (see 1803010040). Each rural LEC is subject to thousands of dollars in Connect America Fund penalties for missing a deadline to certify they had no locations to report for the first HUBB deadline of March 1, 2018, they said. The petition posted Tuesday in docket 14-58 said the affected RLECs "acted in good faith" and found the requirement to certify even when there were no locations to report "was not explicitly clear." The companies said restoring the USF dollars will serve the public interest because they use the funds to deploy broadband and voice in unserved rural areas. Losing the USF money "was a drastic adjustment" for each of the carriers, "and in some cases the results will directly and negatively impact the rural communities" they serve and could delay network upgrades or deployment of new broadband infrastructure.
The FCC seeks comment by July 15, replies Aug. 12 on an NPRM to set an overall cap for the USF, says a notice for Thursday's Federal Register. The agency announced the NPRM in May (see 1905310069). The proposal is opposed by advocates worried a cap could force USF programs to compete for resources (see 1906110071).
FCC Chairman Ajit Pai and other commissioners placed blame for recent hiccups in work to free up spectrum for commercial 5G use squarely on the Commerce Department and NOAA, during a Wednesday Senate Commerce Committee hearing. Pai used the panel to announce pending FCC action to improve the agency's broadband coverage data collection practices, which have come up repeatedly in Capitol Hill communications policy hearings (see 1905150061). Senators also used the panel to probe FCC actions on other communications policy items, including GOP commissioners' public support for T-Mobile's proposed buy of Sprint.
An FCC proposal to cap the USF was opposed by more than 60 advocacy groups. The FCC released an NPRM last month calling for Universal Service Administrative Co. to set an annual budget cap atop the overall USF program (see 1905310069). Among groups opposing the proposal Tuesday are the American Library Association, MediaJustice, NAACP, National Digital Inclusion Alliance, National Tribal Telecommunications Association, NTCA, Rural Wireless Association, Schools, Health & Libraries Broadband Coalition, Urban Libraries Council, and WTA. The groups said the FCC should "evaluate and size each program to suit its unique and essential universal service mission." Imposing an overarching cap on the program, they said, would "undermine efforts to ensure that funding for each program is and will remain 'sufficient' to satisfy Congress' mandates for universal service for all." The comments echo early opposition to the proposal (see 1906030059). The agency didn't comment.
The House Appropriations Committee was considering the FY 2020 Financial Services budget bill, which includes funding for the FCC and FTC, Tuesday afternoon (see 1906030040). The full House is to consider a “minibus” budget bill (HR-2740) later this week that would expand CPB's annual funding to $495 million (see 1904300209). House Appropriations' Financial Services budget measure would give the FTC $349.7 million for FY 2020, up more than $37 million from what President Donald Trump proposed in his March budget request and $40 million above what Congress allocated in the FY 2019 spending bill passed in February. The bill would give $339 million for the FCC. That’s on par with Congress' allocation in the FY 2019 spending bill but up from the $335.6 million the administration proposed for FY 2020. The bill includes language that would extend an exemption from the Antideficiency Act for the USF program and would continue language barring the FCC from changing rules governing the USF “regarding single connection or primary line restrictions.” House Appropriations' said “strongly encourages” the FCC to allocate USF funds “for broadband expansion in rural and economically disadvantaged areas.” The committee “believes the deployment of broadband in rural and economically disadvantaged areas is a driver of economic development, jobs, and new education opportunities and expects the FCC to prioritize efforts to ensure that rural areas and other unserved areas have service that is reasonably comparable to urban areas.” Appropriations said it's “concerned about the quality of broadband availability information used by the FCC to allocate USF funding” and “directs the FCC to improve the quality of its broadband maps to ensure that unserved areas are accurately identified and to report to the Committee within 180 days of enactment of this Act the steps the FCC has taken to improve mapping quality and the impact of those steps.” Its Financial Services Subcommittee advanced the budget bill last week (see 1906040064).
The FCC directed Universal Service Administrative Co. to carry forward the $83.22 million in unused funds from its 2018 USF Rural Health Care program funding year and redirect it for use in 2019, said a Wireline Bureau public notice on docket 02-60 Monday. Last summer, FCC Chairman Ajit Pai asked for a 43 percent increase in the RHC program to account for inflation since its inception (see 1806060057). The 2019 funding cap for funding year 2019 is $594 million. The FCC released an NPRM last month on whether to set an overall budget cap for all USF programs, and to impose a joint cap for E-rate and RHC (see 1905310069).
The FCC authorized $166.8 million in rural broadband funding to support expansion to more than 60,000 unserved homes and businesses in 22 states starting this month, it said Monday. The funds are part of a Connect America Fund Phase II auction to allocate nearly $1.5 billion over the next decade. Winning bidders must meet CAF service and deployment milestones. Payments will be made monthly over 10 years. Earlier this year, Chairman Ajit Pai expressed interest in a new $20 billion rural digital opportunity fund, which raised questions about what would happen to USF rural broadband programs (see 1904160057).
Despite recent pushback from advocacy groups against Friday's FCC NPRM to place an overall budget cap on USF programs (see 1906030059), arguments can be made in its defense, blogged American Enterprise Institute visiting scholar Mark Jamison Wednesday. Though caps exist on individual USF programs, "having an overall cap would force the agency to explicitly examine the tradeoffs." For example, if benefits to low-income students from having broadband access at school are unequal to those of having broadband at home, he suggested "there are good arguments for reallocating monies towards programs that give more bang for the buck."