FCC Adopts Additional Requirements for ETC Proceedings
The FCC said it adopted additional mandatory requirements for eligible telecom carrier (ETC) designation proceedings pursuant to Sec. 214(e)(6) of the Communications Act, consistent with the recommendations of the Federal-State Joint Board on Universal Service submitted a year ago. ETC status allows a carrier to get high-cost universal support funding. The agency also encouraged, but didn’t require, states that exercise jurisdiction over ETC designations to adopt the requirements when deciding whether a common carriers should be designated an ETC. The rules are mandatory only in cases where the FCC makes the ETC designation. While the order applies to both wireline and wireless companies entering the high-cost, mostly rural markets, the majority of incoming ETCs have been wireless carriers.
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The order codifies the decisions made by the FCC in Va. Cellular and Highland Cellular cases in Dec. 2003, and establishes other criteria for ETC designations, sources said. “The order takes pieces of Virginia Cellular [decision] and incorporates and expands them, including the recommendations of the Joint Board,” an FCC spokesman said. He said “the order requires some things that weren’t required” in the Va. Cellular case. For example, he said, the order for the first time requires that ETC applicants demonstrate their ability to remain functional in emergency situations, it expands annual reporting requirements and network improvement plan.
The Va. Cellular decision set a precedent for how the FCC designates ETC carriers, and a number of states have used that approach as a model. In the Fri. order, the FCC for the first time encouraged states to follow the guidelines, developed based on the Va. Cellular decision and the Joint Board recommendations. “That is good because it will provide more predictability for carriers applying for ETC status and more accountability for both wireline and wireless companies in terms of complying with the ETC designation criteria,” said CTIA Vp-Regulatory Policy Diane Cornell.
The FCC said in the order to obtain ETC designation, an ETC applicant must: (1) Provide a 5- year plan demonstrating how high-cost universal service support will be used to improve its coverage, service quality or capacity throughout the service area for which it seeks designation. (2) Demonstrate its ability to remain functional in emergency situations. (3) Demonstrate that it will satisfy consumer protection and service quality standards. (4) Offer local usage plans comparable to those offered by the ILECs in the area for which it seeks designation. (5) Acknowledge that it may be required to provide equal access if all other ETCs in the designated service area relinquish their designations. The FCC said such requirements were made applicable on a prospective basis to all ETCs previously designated by the Commission and such ETCs were required to submit evidence demonstrating how they comply with that new ETC designation framework by Oct. 1, 2006.
The FCC also clarified that its public interest examination for ETC designations would review many of the same factors for ETC designations in areas served by non-rural and rural ILECs, including the benefits of increased consumer choice and the unique advantages and disadvantages of the competitor’s service offering. As part of its public interest analysis, the Commission will also examine the potential for cream-skimming effects in instances where an ETC applicant seeks designation below the study area level of a rural ILEC.
On the annual certification and reporting requirements, the FCC said each ETC designated by the FCC must submit on an annual basis: (1) Progress updates on its 5-year service quality improvement plan. (2) Detailed information on outages in the ETC’s network. (3) How many requests for service from potential customers were unfulfilled for the past year and the number of complaints per 1,000 handsets or lines. (4) Certifications that the ETC is complying with applicable service quality standards and consumer protection rules, is able to function in emergency situations, is offering a local usage plan comparable to that offered by the ILEC in the relevant service areas, and acknowledge that the FCC may require it to provide equal access to long distance carriers.
The FCC also: (1) Agreed with the Joint Board’s recommendation that the Commission’s procedures for redefinition proceedings didn’t warrant a change at this time. (2) Granted certain pending petitions for redefinition of rural ILEC study areas. (3) Modified the Commission’s annual high-cost certification and line count filing deadlines so that newly designated ETCs were permitted to file that data within 60 days of their ETC designation date, and modified the quarterly interstate access support certification filing schedule. (4) Delegated authority to the Universal Service Administrative Co. to develop standards for the submission of any maps that ETCs are required to submit under Commission rules.
The FCC didn’t adopt one Joint Board recommendation which was a requirement that an ETC applicant demonstrate that it has financial resources and ability to provide quality services throughout its designated service area. “We thought that was not necessary because the existing requirement along with the new one we just adopted show that they have significant financial resources,” an FCC spokesman said: “Also because the largest number of ETC designees are wireless carriers that have purchased their licenses in auctions that shows that they have sufficient resources to provide service.”
“It is a very positive decision,” Cornell said: “There were a number of proposals made by some entities in the record of this proceeding that would have been very discriminatory against wireless carriers. And we are very pleased that the FCC is taking an approach that is not discriminatory and doesn’t favor one type of carriers against another, which is good for consumers.” One wireless attorney said: “It [the decision] looks like very positive for wireless but it’s hard to tell till the text [of the order] is released. It looks like it’s a positive decision because it codifies Virginia Cellular and Highland Cellular [cases] and does not include any new requirements that would make it impossible for competitive carriers to become ETCs.” He also said granting certain pending petitions for redefinition of rural ILEC study area was a positive moment: “Some of them [petitions] were old and it would be positive for wireless [carriers] if they were clarified and granted.”
The FCC adopted the order on Fri., meeting its statutory deadline of Feb. 27 (Sun.). FCC Chmn. Powell and Comrs. Abernathy, Copps and Adelstein voted to approve the order, with Comr. Martin approving in part and dissenting in part. The order is expected to be released in a few days, after some “minor” edits are made to the commissioner statements, an FCC spokesman said.
Missing from the FCC order was the controversial “primary line” proposal that had been included in last year’s joint board recommendation. The plan would have limited universal service to one line per customer. However, Congress inserted a provision in the omnibus appropriations bill in Nov. that prevented the FCC from imposing the primary line restriction on universal service support.
An OPASTCO spokeswoman said members of the rural telephony association see the order as “as moving in the right direction” because telecom companies want “requirements that are enforceable.”