A Tuesday Senate Appropriations Financial Services Subcommittee hearing on the FCC FY 2018 budget focused largely on the direction of the commission under Chairman Ajit Pai, with subcommittee Republicans highlighting policy issues Pai championed. Democrats raised concerns with the future of 2015 net neutrality rules and Congress' rollback of ISP privacy rules. President Donald Trump's administration proposed last month that the FCC budget be cut by $18 million, to $322 million, after years of the agency maintaining $340 million in annual funding. The FCC's budget justification document noted a planned reduction of more than 100 employees (see 1705230041).

The Small Company Coalition urged the FCC "to fully fund" USF support for rate-of-return carriers, and suggested tapping the sizable Connect America Fund reserves. "[A]rtificial constraints placed on the RoR high cost mechanisms are needlessly harming the ability of carriers to deploy broadband, especially considering the collection and maintenance of significant CAF reserves," said the filing Thursday in docket 10-90 by the group, which is an alliance of RLECs and associated vendors. It said the Universal Service Administrative Co. has a CAF reserve balance of $1.84 billion, which has hovered around $2 billion since 2014 and is intended to prevent dramatic quarterly fluctuations. "Such reserves could help reduce costs associated with maintaining integrity in the USF and the savings could be better used to help fund the RoR mechanisms," said the SCC. The group asked the FCC to scrutinize the audit and review processes of its Office of Inspector General and USAC, which appear to have "substantial inefficiencies" and pass "unnecessary costs" to carriers. Separately, rural telco representatives asked the FCC not only to fully fund its original model-based USF offers but also to make "offers of model funding to RLECs whose model eligibility of funding was affected by clerical oversights," which they said would be "particularly efficient." Such model funding for the affected companies "would increase the number of prescribed broadband locations by 32% but only increase new model funding by 9% (compared to fully funding the original model offers)," said a filing by Vantage Point Solutions on a meeting it and others had with an aide to Chairman Ajit Pai and Wireline Bureau staffers. A filing by rural electric groups and NTCA urged the FCC "to reject ViaSat's untimely proposal to modify" the agency's bidding weights for a planned CAF Phase II reverse auction of fixed broadband subsidies. A solo NTCA filing in docket 10-208 on a meeting with agency staffers discussed its proposal for the Mobility Fund Phase II challenge process. General Communication of Alaska discussed "hardship" under a USF rural healthcare spending cap and the need for a fix, said a filing in docket 02-60 on a meeting with aides to Pai and Commissioner Michael O'Rielly.

The Senate Communications Subcommittee's Tuesday hearing on the USF and its rural broadband deployment capabilities is likely to focus on whether problems affecting funding for broadband deployment in rural areas have been fixed, but it could also examine opportunities to expand use of USF for technologies like telehealth, said lawmakers and industry experts in interviews. The hearing is one of two on Capitol Hill this week on broadband deployment issues, with the House Communications Subcommittee planning a Wednesday hearing on the accuracy of the existing National Broadband Map data on unserved and underserved areas of the U.S., plus other mapping efforts (see 1706150058). The Senate Communications hearing will begin at 10 a.m. in 253 Russell.

The Senate Communications Subcommittee's Tuesday hearing on the USF and its rural broadband deployment capabilities is likely to focus on whether problems affecting funding for broadband deployment in rural areas have been fixed, but it could also examine opportunities to expand use of USF for technologies like telehealth, said lawmakers and industry experts in interviews. The hearing is one of two on Capitol Hill this week on broadband deployment issues, with the House Communications Subcommittee planning a Wednesday hearing on the accuracy of the existing National Broadband Map data on unserved and underserved areas of the U.S., plus other mapping efforts (see 1706150058). The Senate Communications hearing will begin at 10 a.m. in 253 Russell.

Alaska Communications Systems said USF management faces "an acute crisis" affecting the FCC Rural Health Care (RHC) Program. ACS said recent regulatory actions "demonstrate that a secondary goal, shrinking the contribution factor, may be taking precedence over the Communications Act’s mandate to increase access to universal service." Universal Service Administrative Co. and FCC decisions reducing funding by 7.5 percent for approved RHC projects "have put rural health care providers ('HCPs') in an untenable position, leaving them incapable of paying for services ordered, and leaving service providers uncertain of recovering their expenses," said a company filing in docket 02-60 Friday. "The FCC is now considering a proposal to further harm the RHC program by using RHC program reserves to temporarily reduce the contribution rate rather than support real needs for rural health care," said ACS, citing USAC as changing, "without explanation," its 3Q recommendation for funding RHC from contributions to the RHC reserve (see 1706050008). "It is troubling that the Commission might inadvertently cede a golden opportunity to improve broadband access for rural HCPs in exchange for a merely cosmetic change to the contribution line item." The telco asked the agency to hike RHC funding without increasing the contribution factor and without borrowing from the RHC reserve fund or a high-cost program account. The FCC and USAC didn't comment Monday.

Alaska Communications Systems said USF management faces "an acute crisis" affecting the FCC Rural Health Care (RHC) Program. ACS said recent regulatory actions "demonstrate that a secondary goal, shrinking the contribution factor, may be taking precedence over the Communications Act’s mandate to increase access to universal service." Universal Service Administrative Co. and FCC decisions reducing funding by 7.5 percent for approved RHC projects "have put rural health care providers ('HCPs') in an untenable position, leaving them incapable of paying for services ordered, and leaving service providers uncertain of recovering their expenses," said a company filing in docket 02-60 Friday. "The FCC is now considering a proposal to further harm the RHC program by using RHC program reserves to temporarily reduce the contribution rate rather than support real needs for rural health care," said ACS, citing USAC as changing, "without explanation," its 3Q recommendation for funding RHC from contributions to the RHC reserve (see 1706050008). "It is troubling that the Commission might inadvertently cede a golden opportunity to improve broadband access for rural HCPs in exchange for a merely cosmetic change to the contribution line item." The telco asked the agency to hike RHC funding without increasing the contribution factor and without borrowing from the RHC reserve fund or a high-cost program account. The FCC and USAC didn't comment Monday.

Representatives of device manufacturers will ask lawmakers on the House Digital Commerce and Consumer Protection Subcommittee for changes to curbs that they believe potentially harm small businesses and hinder spectrum allocation, and for more focus on cybersecurity and access to patient data, at a Tuesday hearing.

Representatives of device manufacturers will ask lawmakers on the House Digital Commerce and Consumer Protection Subcommittee for changes to curbs that they believe potentially harm small businesses and hinder spectrum allocation, and for more focus on cybersecurity and access to patient data, at a Tuesday hearing.

Representatives of device manufacturers will ask lawmakers on the House Digital Commerce and Consumer Protection Subcommittee for changes to curbs that they believe potentially harm small businesses and hinder spectrum allocation, and for more focus on cybersecurity and access to patient data, at a Tuesday hearing.

The FCC should be in no rush to push through changes to the separations regime for price-cap carriers, NTCA replied in docket 80-286. The FCC recently extended a freeze on jurisdictional separations rules for 18 months while a federal-state joint board attempts to develop new proposals (see 1705150064). The record doesn't "support comprehensive separations reform” now, NTCA said. “Current separations rules may ultimately need modification, if not complete overhaul, to reflect the evolution of the communications marketplace towards IP-enabled services that are interstate in nature. However, existing separations rules should be retained while reforms to Universal Service Fund and intercarrier compensation mechanisms that specifically sit atop the existing rules still take root.” The Moss Adams accounting and consulting firm agreed. In initial comments, associations representing carriers “each indicate in their own ways that now is not the time for the FCC to undertake significant reform of the Part 36 jurisdictional separations rules,” the firm said. “For the most part, Moss Adams concurs.” Moss Adams replied that NTCA is right, the FCC should allow USF and intercarrier compensation measures to play out for a while first, even if change ultimately is desirable. The two filed the only replies by our deadline Friday.