The FCC revised rules for rural telco consumer broadband-only loop (CBOL) services adopted in a 2016 rate-of-return USF overhaul order. The commission replaced a "surrogate cost method for determining the cost of CBOLs with rules employing existing separations and cost allocation procedures," said a reconsideration order in docket 10-90 in Tuesday's Daily Digest responding to an NTCA petition. It modified a "rule requiring rate-of-return carriers to impute on CBOLs an amount equal to the Access Recovery Charge (ARC) that could have been assessed on a voice or voice/broadband line to better implement our intent to maintain the balance between end user charges and universal service adopted" in a 2011 USF and intercarrier-compensation transformation order. The commission clarified "two matters pertaining to reductions in Connect America Fund Broadband Loop Support (CAF BLS) due to competitive overlap": affecting reduction amounts associated with a "second disaggregation method" and declaring a transition "schedule applies where the CAF BLS subject to competitive overlap is 25 percent or more of total CAF BLS." The various adjustments provide "more certainty and stability for carriers investing for the future, thereby ensuring that all consumers have access to advanced telecommunications and information services," the order said. Senior Vice President Mike Romano said Tuesday NTCA is pleased the FCC acted on the ARC and surrogate-cost issues raised in its petition. "The order represents a few more important steps in addressing the ‘punchlist’ of items flagged in our petition, and we are eager to keep working with the FCC to address the outstanding items on that list to put the high cost mechanisms in a better position to truly deliver on the mission of universal service."

FCC Commissioner Mignon Clyburn said USF contributions should assess broadband because subsidies target broadband and the current long-distance voice revenue base is unsustainable. The current approach is much like a game of Jenga, she said at NARUC Wednesday, tracking written remarks: "We keep removing pieces from the base, and keep adding more to the top. Eventually, that tower will come tumbling down." She hopes a federal-state joint board will propose changes, but if not, it could invite new, outside experts to analyze the situation and provide fresh ideas.

FCC Commissioner Mignon Clyburn said USF contributions should assess broadband because subsidies target broadband and the current long-distance voice revenue base is unsustainable. The current approach is much like a game of Jenga, she said at NARUC Wednesday, tracking written remarks: "We keep removing pieces from the base, and keep adding more to the top. Eventually, that tower will come tumbling down." She hopes a federal-state joint board will propose changes, but if not, it could invite new, outside experts to analyze the situation and provide fresh ideas.

President Donald Trump’s administration again proposed to cut federal funding to CPB in its FY 2019 budget proposal, placing it among the 22 entities it’s aiming to zero out for federal funding in a bid to “bring Federal spending under control, and reduce deficits by $3.6 trillion over the budget window.” The administration also proposed Monday expanding FCC authority to do spectrum auctions and eliminating accrued interest on future deposits in the Rural Utilities Service borrowers’ cushion of credit accounts. The budget largely maintains the funding levels the FCC, FTC and NTIA proposed in the Trump administration’s FY 2018 request, all of which are down from the year’s funding levels under continuing appropriations (see 1705230041). The White House also released its infrastructure legislative proposal, which would streamline the permit review process for small cells and Wi-Fi deployments (see 1802120001).

State regulators face competing Lifeline draft resolutions at NARUC's winter meeting on an FCC proposal to target low-income USF subsidies to facilities-based providers (see 1801300023 and 1801300023). A draft resolution to urge the FCC to continue allowing resellers to receive Lifeline funding appears to have more support than a draft that welcomed the proposed shift, some told us Friday, though compromise or postponement of consideration is always possible. Competing Lifeline draft resolutions were pulled from the last meeting (see 1711130035). At the winter meeting, which was to begin Sunday and run through Wednesday, NARUC is also to consider draft telecom resolutions on nationwide number portability and pole-attachment overlashing.

State regulators face competing Lifeline draft resolutions at NARUC's winter meeting on an FCC proposal to target low-income USF subsidies to facilities-based providers (see 1801300023 and 1801300023). A draft resolution to urge the FCC to continue allowing resellers to receive Lifeline funding appears to have more support than a draft that welcomed the proposed shift, some told us Friday, though compromise or postponement of consideration is always possible. Competing Lifeline draft resolutions were pulled from the last meeting (see 1711130035). At the winter meeting, which was to begin Sunday and run through Wednesday, NARUC is also to consider draft telecom resolutions on nationwide number portability and pole-attachment overlashing.

FCC Commissioner Mike O'Rielly said USF contributions won't target broadband while he's chairman of a federal-state joint board that advises the agency. Although open to other approaches to shoring up the eroding USF industry contribution base, O'Rielly said he's focused on bringing fiscal discipline to USF programs. The FCC "should set a topline budget and then ensure that spending increases are paired with offsets elsewhere," he said at a Hudson Institute event Tuesday. He also explained his libertarian-tinged conservativism, backed serious cost-benefit analysis in the new Office of Economics and Analytics, and voiced optimism Congress will remove a legal hurdle to new spectrum auctions.

FCC Commissioner Mike O'Rielly said USF contributions won't target broadband while he's chairman of a federal-state joint board that advises the agency. Although open to other approaches to shoring up the eroding USF industry contribution base, O'Rielly said he's focused on bringing fiscal discipline to USF programs. The FCC "should set a topline budget and then ensure that spending increases are paired with offsets elsewhere," he said at a Hudson Institute event Tuesday. He also explained his libertarian-tinged conservativism, backed serious cost-benefit analysis in the new Office of Economics and Analytics, and voiced optimism Congress will remove a legal hurdle to new spectrum auctions.

Many stakeholders backed hiking USF rural health care program funding support, while industry parties focused more on improving RHC efficiency and oversight. Dozens of comments were filed at the FCC Monday and last week in docket 17-310 on an NPRM on possibly increasing the program's $400 million annual cap and creating a prioritization mechanism if demand exceeds the cap, among other potential changes. The Schools, Health & Libraries Broadband Coalition urged increasing the cap to $800 million to reflect that potential participating providers more than doubled since 1997 when the current cap began. The American Hospital Association said the cap should be "significantly increased to keep pace with growing connectivity demand." Other healthcare interests and Alaskan entities, including tribal groups, backed an increase, citing the need to at least account for inflation. The NPRM "overlooks the significantly greater need for support on a per-location basis in Alaska's rural areas than in the rest of the nation," said Alaska Communications. USTelecom shared some FCC concerns with how the RHC program has operated in the lower 48 states, where "cases of waste, fraud, or abuse have come to light." The commission should focus on helping Universal Service Administrative Co. "detect and reject applications where federal universal service support is not needed" to meet statutory proposes, the telco group said. NCTA supported the promotion of telehealth in rural America "based on evidentiary data with a principal focus on defined needs and desired outcomes." NTCA said the FCC should provide better guidance to applicants, including on the specificity needed to describe requests for service support. "Ensure that satellite broadband services are eligible to equitably compete" for such money, said the Satellite Industry Association.

Many stakeholders backed hiking USF rural health care program funding support, while industry parties focused more on improving RHC efficiency and oversight. Dozens of comments were filed at the FCC Monday and last week in docket 17-310 on an NPRM on possibly increasing the program's $400 million annual cap and creating a prioritization mechanism if demand exceeds the cap, among other potential changes. The Schools, Health & Libraries Broadband Coalition urged increasing the cap to $800 million to reflect that potential participating providers more than doubled since 1997 when the current cap began. The American Hospital Association said the cap should be "significantly increased to keep pace with growing connectivity demand." Other healthcare interests and Alaskan entities, including tribal groups, backed an increase, citing the need to at least account for inflation. The NPRM "overlooks the significantly greater need for support on a per-location basis in Alaska's rural areas than in the rest of the nation," said Alaska Communications. USTelecom shared some FCC concerns with how the RHC program has operated in the lower 48 states, where "cases of waste, fraud, or abuse have come to light." The commission should focus on helping Universal Service Administrative Co. "detect and reject applications where federal universal service support is not needed" to meet statutory proposes, the telco group said. NCTA supported the promotion of telehealth in rural America "based on evidentiary data with a principal focus on defined needs and desired outcomes." NTCA said the FCC should provide better guidance to applicants, including on the specificity needed to describe requests for service support. "Ensure that satellite broadband services are eligible to equitably compete" for such money, said the Satellite Industry Association.