Cable, Wireless ISPs Question FairPoint’s Petition for CAF Phase I Waiver

The FCC intentionally had a limited purpose in mind when it created the Phase I program, the American Cable Association said: jumpstarting broadband deployment to unserved locations (http://xrl.us/bntuu4). Phase I was “not designed as a long-term support mechanism and should not be fundamentally altered to achieve that aim”; that’s what Phase II is for, ACA said. The $775 per location cap was only chosen after the commission looked at cost estimates from specific price cap carriers, the cost model used in developing the National Broadband Plan, and the cost model developed by the ABC Coalition -- of which FairPoint is a member, ACA said. The commission has “twice rejected the pleas of price cap carriers” to alter the $775 per location requirement, and FairPoint provides “no new rational [sic] for the Commission to change course."

FairPoint’s petition is “yet another attempt to expand limited [CAF] Phase I incremental support beyond its intended purposes,” NCTA said (http://xrl.us/bntuv5). FairPoint’s argument that a waiver is in the public interest “because it would enable FairPoint to bring broadband service to locations that otherwise would not have service” does not constitute the type of special circumstances that would warrant a waiver, because the commission “specifically anticipated that this result would occur,” NCTA said. In its CAF order, the commission listed several examples of other uses for “foregone CAF Phase I support,” such as minimizing high-cost support budget fluctuations, reallocating funds to support broadband adoption efforts, and reducing the contribution burden on consumers, NCTA said. “Any one of these options would be a better use for ‘leftover’ CAF Phase I money than giving FairPoint $4000 per household to provide broadband service in areas where it may already have a state regulatory obligation to provide such service."

The Wireless Internet Service Providers Association focused its opposition on what it called the “untimely conditional election” that, at more than $4,000 per location, would “far exceed” the $775 subsidy set by the commission for the Phase I program (http://xrl.us/bntusm). FairPoint waited more than 45 days after the “long-established deadline” to ask for the $2.8 million it previously declined, while offering “no reason” why it failed to accept the money by the deadline, WISPA wrote. “These circumstances are not ’special’ and thus do not warrant consideration.” The request to “dramatically increase” the per-location support level similarly fails to demonstrate special circumstances, WISPA said. If the commission does not deny the waiver requests, it should defer action on the petition until the Maine litigation is resolved, WISPA said. Getting additional Phase I funding to serve Maine locations would give FairPoint “negotiating leverage” with the PUC, WISPA said.

The Independent Telephone & Telecommunications Alliance supported the petition, and asked that the commission grant the same relief to other price cap carriers that were allocated Phase I funding (http://xrl.us/bntuy2). Special circumstances exist for a waiver because “rigid observance” of the $775 per location rule would prevent the commission from attaining its “purported objective” of expanding voice and broadband availability “as much and as quickly as possible” and to help close the “rural-rural divide.” Strict adherence to the rule would let FairPoint utilize less than 42 percent of the funding it was allocated, and it “defies logic” to deny rural Americans in FairPoint’s territory the benefits of broadband “for the foreseeable future” while the commission figures out Phase II details, ITTA said.