Congress should continue to back the Rural Utilities Service’s “Broadband Loan program that is subjected to the Farm Bill reauthorization process at or above current funding levels as you formulate recommendations,” testified Craig Cook, chief operations officer of Hill Country Telephone Cooperative in Texas, Thursday on behalf of NTCA before a House Agriculture subcommittee. The committee also should “continue its long history of support for the Telecommunications Infrastructure and Community Connect programs,” Cook said in written testimony. The RUS nonduplication policies should be enshrined in law, he recommended: “Congress should codify a prohibition on USDA financing new fiber or other broadband-capable infrastructure through any RUS or other USDA program where an existing network deployed by a different carrier was also financed through a RUS or other USDA program. This non-duplication provision should apply to all USDA programs, and should also extend to preclude overbuilding of other carriers’ networks that receive USF High-Cost support as administered by the FCC.” He also called permitting regulations “significant obstacles” worth addressing: “While permits serve an important public purpose, we’d encourage streamlining federal approval processes to the extent possible, and to the extent that RUS can help in standardizing processes with land-managing and property-managing agencies and in improving timelines for historical preservation coordination, that would be a significant help in speeding and reducing the costs of deployment.”
Sorenson Communications said an FCC draft Further NPRM "missed an opportunity" to explore "less regulatory" proposals for new video relay service compensation rates, though it praised agency transparency in releasing text and its effort to provide "certainty and stability." The largest VRS provider urged the FCC to seek comment on a "market-based" auction proposal for setting price caps that the company outlined this week. GlobalVRS, a smaller provider, rejected Sorenson's plan. Commissioners tentatively plan to vote March 23 on a draft VRS order, FNPRM and notice of inquiry that prominently sought comment on the proposals of smaller providers to increase rates except for the highest traffic tier covering Sorenson, which would be cut further (see 1703020070 and 1703030053).
FCC Chairman Ajit Pai sought to stick to bipartisan ground during his first appearance as chief before Congress Wednesday. He emphasized broadband deployment and other areas of potential cooperation. Senate Commerce Committee Democrats pressed Pai on President Donald Trump and tried to box him in on a possible FCC role overseeing AT&T buying Time Warner. Pai avoided giving details on how he may address the 2015 open internet order. He did say the FCC is likely to stick with the new plan, now in test mode, of releasing some draft items when they've been given to commissioners.
WTA lobbied the FCC for "full funding" of both rural telco USF subsidy mechanisms, the new Alternative Connect America Cost Model (ACAM) and the updated rate-of-return path. The rural telco group also urged the FCC to scrap or suspend a "rate floor in Section 54.328(b)" of the rules, and noted its agreement with then-Commissioner (now Chairman) Ajit Pai's rate-floor criticism in an April 23, 2014, dissent. "If nothing is done, many RLECs are going to have to raise their voice rates again -- this time, to $20 per month -- as of July 1," said a WTA filing Monday in docket 10-90 on a meeting with a Pai aide. Noting its petition for reconsideration, the group cited concerns about certain Lifeline USF rules, including minimum service standards that "render consumers who are otherwise eligible for Lifeline unable to receive support for the broadband services available to them." It also criticized a Lifeline voice support phaseout and a 12-month broadband "port-freeze" that "is confusing for consumers, complex to administer for small carriers, and encourages carries to 'lock-in' customers." Separately, WTA filed comments backing an Adak Eagle Enterprises recon petition of a Dec. 20 FCC decision not to extend to Adak a second ACAM offer.
A universal service bill moving through the Utah State Legislature could add revenue to the state USF, said a fiscal note issued Monday on SB-130. The Utah bill says telecom companies providing access lines, connections or wholesale broadband internet access service qualify for state USF distributions. It requires each provider to contribute to the USF and requires the Utah Public Service Commission to develop a method for calculating the amount of each contribution. And it makes wireless companies eligible for state Lifeline support. Enactment could “increase revenues to the Universal Public Telecommunications Service Support Fund, assuming the Public Service Commission adjusts surcharge rates to match fund disbursements,” said the fiscal note. “One aspect of the legislation, expansion of the state Lifeline Program to wireless customers, could require increased surcharge revenue to the fund of at least $1.1 million.” The bill means broadband and internet providers will face additional regulation and contribution requirements, while customers could pay increased surcharges, it said. Expanding the state Lifeline program could give $42 annually to at least 26,200 individuals, it said. The Utah Senate passed SB-130 on Feb. 27 and the bill awaits a House vote. The Utah PSC, which is considering contribution changes amid projections its fund could run out early this year, tentatively decided last July to increase its revenue-based surcharge as an interim step while the state legislature considers broader changes (see 1607150017).
NTCA urged FCC Commissioner Mignon Clyburn to help remedy "the insufficiency" of high-cost USF budgets, which is "resulting in fewer locations being reached with better broadband," and rural broadband rates "that are materially higher" than urban rates. The rural telco group also sought urgent action on two targeted issues, "the need for a technical correction to or clarification of the Capital Investment Allowance adopted in last year’s reforms" and "the continuing adverse effects upon consumers arising out of application of the 'rate floor' policy," said an NTCA filing posted Monday in docket 10-90 on a meeting its CEO Shirley Bloomfield and Senior Vice President Michael Romano had with Clyburn and an aide.
The USF contribution factor for Q2 will jump from 16.7 percent to 17.4 percent of carrier interstate and international telecom end-user revenue, emailed industry consultant Billy Jack Gregg Thursday. He said Universal Service Administrative Co. projections for Q2 industry revenue were $13.6 billion, about $356 million less than the previous quarter, which, combined with projected USF demand of $1.99 billion, will cause the contribution factor to go up. The Q2 revenue decline "continues the downward trend in the USF contribution base, which places upward pressure on the USF assessment factor. USF revenues for the four quarters ending the second quarter of 2017 are $3.35 billion lower than revenues for the four quarters ending the second quarter 2016, a 5.6% decline," he wrote.
The Arizona Corporation Commission should narrow funding for broadband to rural areas and commercially provisioned, finished services, CenturyLink said in Tuesday comments on the ACC’s proposed broadband fund for rural schools (see 1702080022). But the ISP praised the commission’s other Feb. 15 revisions to draft amendments to the state’s USF rules, including capping the proposed fund at $8 million, limiting collection to 12 months and limiting the program to the 2017 and 2018 E-rate funding cycle. In other comments, AT&T urged the commission to clarify that it’s not asserting regulatory jurisdiction over broadband, prohibit overbuilding and limit funds to E-rate special construction projects. The Arizona commission plans an all-day workshop on the matter Thursday at 1 p.m. EST, the agency said in a Wednesday news release.
The Missouri Public Service Commission sought comment on the future of the state USF, in a notice released Tuesday in docket TW-2017-0078. The commission asked if it should revise its $6.50-per-subscriber support amount and what should be the USF assessment level. The PSC asked if the fund, which today supports only voice landline Lifeline service, should support a broadband-only service and if it should provide a high-cost service. It asked if it should use different assumptions to project state USF revenue and expenses. Killing the state USF is on the table, too, said the agency: “Should the Missouri USF be eliminated? If yes, how and when should it be done? What should be done with any unused funds?” In an accompanying memo, staff said changes in consumer behavior and federal developments necessitate a revamp of the state USF. "The number of participants in programs supported by the Missouri USF has declined, primarily due to a shift in consumer preferences to wireless service,” staff said. “Federal Lifeline program reforms are shifting federal support to only support a broadband service.” The Missouri USF fund balance is $2.45 million and has slowly declined since October 2014, staff said. The state requires companies to contribute 0.0010 times their net jurisdictional revenue, it said. Despite repeated reductions in contribution amounts to the state USF, the Missouri fund could be financially viable through 2023 even if the assessment was eliminated, staff said. Comments are due May 1. Revenue from contributions to state USFs has declined in multiple jurisdictions, our report last year found (see 1607010010).
Any grand infrastructure plan should go beyond public-private partnerships and tax credits and find ways to incorporate broadband, senators and witnesses said Wednesday during a Commerce Committee hearing. It followed another call Tuesday from President Donald Trump that Congress act on infrastructure. Senators repeatedly questioned what a broadband component should look like.