Pennsylvania Public Utility Commissioners voted 5-0 to hike the state USF contribution factor to 1.96 percent from 1.83 percent, an increase of 7.17 percent. The contribution factor for 2018 increased due to shrinking carrier revenue and is based on an estimated year-end 2017 cash balance of $1.25 million, said Thursday's order in docket M-00001337.
A congressional infrastructure package isn't expected to contain broadband funding, said Grace Koh, National Economic Council technology, telecom and cybersecurity assistant to President Donald Trump. "I don't think broadband is going to be a set-aside" in legislation, though high-speed deployment could be encouraged in other ways, she said at a Practicing Law Institute conference Thursday morning. Other PLI news: 1712070063 and 1712070047.
Hughes Network Systems urged the FCC to go easy on performance-measurement duties in a planned Connect America Fund Phase II reverse auction of USF support for fixed broadband services in traditional ILEC areas where incumbents declined CAF II offers. Such obligations would impose burdens that fall hardest on smaller winning bidders, said the Hughes response Wednesday to a public notice in docket 10-90 (see 1711060055). The FCC should leverage existing programs, including Measuring Broadband America, but if it does impose a new requirement, it should select a "software approach where the software resides on the operators' modems," said Hughes, which earlier made broader CAF II auction arguments. Several parties lobbied FCC rural broadband auctions task force members in filings this week. The Wireless ISP Association pressed the staffers not to require potential bidders using spectrum to submit propagation maps for the census block groups they're eying. Such applicants should demonstrate due diligence in applications, but the mapping requirement "would be impractical, unfair and inefficient," said WISPA, which also criticized a proposed financial screen and backed census block groups (CBGs) as the geographic bidding unit. A rural coalition of power companies and NTCA urged the FCC to simplify the auction, arguing that procedural complexity, particularly package bidding, could deter small provider participation. But officials from USTelecom, AT&T, CenturyLink, Consolidated Communications, Frontier Communications, Verizon and Windstream defended package bidding, which they said allows participants "to plan efficient network deployment" across CBGs. They said their analysis suggests packages of up to 25 CBGs are "likely to provide sufficient opportunity to reap network build and operating efficiencies to yield bids" consistent with the FCC's goal of ensuring competitive prices and broad coverage. They also said the ability of bidders "to change performance tiers between rounds appeared to contribute more to views that the auction is unnecessarily complex than to the needs of existing broadband providers."
An Alaska tribal group asked the FCC to "fully fund" the USF Rural Health Care Program for funding year 2016 in the draft order and NPRM targeted for a vote at the Dec. 14 commissioners' meeting (see 1711220026). The commission draft proposed to "carry forward for use in FY 2017 any available RHC Program funds from prior funding years and, on a one-time-basis, commit those funds" to RHC participants for FY 2017, said a Tanana Chiefs Conference filing in docket 17-310. While applauding that proposal, the TCC said the draft doesn't "address the existing RHC Program funding shortfall" for FY 2016, which "caused a great deal of hardship" for rural healthcare providers and the people who depend on them. The group said the FCC should ensure that those providers "get all the funds to which they were entitled before" the agency implemented "pro rata funding."
Telecom officials raised no major objections at a Maine Public Utilities Commission hearing Tuesday on a proposal to revamp contributions to the Maine Telecom Education Access Fund, Maine's E-rate fund. The PUC is deciding how to implement this year's state law changing MTEAF contributions to a voice connections-based mechanism from one based on intrastate revenue. Contributions were capped at 0.7 percent of intrastate retail voice revenue, but declining revenue over the past five years necessitated changes, said a notice last month in docket 2017-00283. Under the law, the PUC now will assess 21 cents maximum per line or number, with the actual amount determined by the commission. The PUC proposed that voice providers report quarterly a count of active phone lines, customers or numbers -- up to 25 lines or numbers per customer billing account -- and multiply that by the contribution factor to get the amount they must remit. At Tuesday's hearing, a Telecommunications Association of Maine official asked that the rule not be implemented until July at earliest, and a FairPoint Communications official suggested a minor edit clarifying application to VoIP providers. Written comments are due Dec. 15. A later proceeding will decide the exact amount of the contribution factor, said Maine PUC telecom staffer Rich Kania. Some other state commissions may soon adopt connections-based contribution for their state USFs, amid objections from CTIA (see 1712010055).
FCC information collection adopted in a 2016 rural telco USF overhaul order was cleared by the Office of Management and Budget for three years effective immediately, said Monday's Federal Register. "The reforms adopted in this Order require rate-of-return LECs to make tariff filings with the necessary tariff materials outside of the normal tariff filing period."
Rural telcos from seven more states urged the FCC by year-end to approve increased USF Alternative Connect America Model (A-CAM) funding up to $200 per month per eligible customer location for broadband deployment. "We are ready, willing and able to meet" additional broadband deployment duties, said a letter posted Monday from six Alabama RLEC recipients of A-CAM support. They said the increased funding would allow them to guarantee 25/3 Mbps data speed to almost 6 percent more rural customers and 10/1 Mbps service to more than another 6 percent. Similar letters were posted in docket 10-90 in recent days from carriers in Arizona, Nebraska, Oklahoma, Oregon, Washington state and Wisconsin. Previously, RLECs from Georgia, Minnesota and Tennessee filed such letters (see 1711290027 and 1711240018).
The USF contribution rate is expected to rise in Q1 from 18.8 percent to 19.5 percent of carriers' U.S. interstate and international telecom end-user revenue, said industry consultant Billy Jack Gregg in a Friday email. The Universal Service Administrative Co. projected USF-applicable telecom revenue for Q1 to be $12.87 billion, a quarterly drop of about $154 million that continues the downward trend in the contribution base, he said. That, combined with USAC's previously projected Q1 USF demand of $2.08 billion, produced the expected increase in the contribution factor, he said. Amy Bender, aide to FCC Commissioner Mike O'Rielly, chairman of three federal-state joint boards, on Nov. 9 said her boss had discussions with state colleagues about USF contribution issues but was more focused on making recommendations by the end of March on possible jurisdictional separations changes (see 1711090043). The separations issues remain "where our focus is right now," an O'Rielly spokeswoman told us Monday. State joint board members are ready to recommend changes to the USF contribution mechanism, said State Chair Chris Nelson at a NARUC meeting in November (see 1711130035).
Sen. Claire McCaskill, D-Mo., asked FCC Chairman Ajit Pai to detail agency steps to recover $89.5 million in fines it proposed about four years ago against Lifeline USF providers "that profited from violating" rules for the low-income subsidy program. "It's critical that the FCC Enforcement Bureau acts swiftly and aggressively to hold companies accountable for violating Lifeline program rules and to protect taxpayers and low-income Americans who rely on Lifeline," the Homeland Security and Government Affairs Committee ranking member wrote Friday in a letter an aide sent us Monday. McCaskill said the FCC September 2013-February 2014 issued notices of apparent liability to 12 Lifeline providers proposing more than $94 million in fines for enrolling ineligible consumers, but only one led to a public fine, after it was referred to DOJ for criminal prosecution. Ten of the providers continued to receive Lifeline support, totaling more than $2.4 billion in 2014-16, "just over 50% of all Lifeline funds disbursed" then, she wrote, noting that includes $1.36 billion to TracFone. McCaskill asked Pai to respond by Dec. 22. The FCC is reviewing the letter, said a spokesman.
The Utah Public Service Commission said it won’t reconsider moving to a connections-based contribution mechanism for state USF on Jan. 1. In a Thursday notice in docket 17-R360-01, the PSC said it will deny CTIA’s application for rehearing. CTIA is weighing next steps in Utah, a spokeswoman said. CTIA also had asked the Nebraska PSC to reconsider its separate decision to adopt a connections-based contribution method (see 1711150049). The wireless association filed a motion for appeal Thursday that replaces the earlier motion for reconsideration, a Nebraska PSC spokesman said. The New Mexico Public Regulation Commission also is mulling a USF contribution revamp, in case 17-00202-UT (see 1711020044). New Mexico commissioners last week voted 3-1, with one member excused, to increase its revenue-based state USF surcharge to 6.06 percent for 2018, up from 5.03 percent in 2017.