Arizona could modify state USF into a rural-focused fund to expand broadband, said Smith Bagley in comments Monday at the Arizona Corporation Commission (ACC). "A narrowly tailored state universal service fund may be uniquely qualified to understand and address specific local needs in a manner that large temporary federal grant programs cannot.” The ACC could, through a rulemaking, amend Arizona USF rules “to create a rural universal service fund similar to the fund created by the New Mexico Public Utilities Commission,” it said in docket T-00000A-20-0336. Smith Bagley provides wireless and wireline service to tribes in remote parts of Arizona, but some areas in that territory remain unserved, and the company's voice, 3G and 4G networks "cannot be upgraded to 5G without substantial additional investment in wireless equipment and middle-mile fiber connections to its towers,” it said. "In areas with poor demographics and sparse population density (often less than ten people per square mile) there is no business plan supporting these additional investments without assistance from either a universal service mechanism or a grant program specifically designed to encourage investment.” Smith Bagley disagreed with Frontier Communications that the fund should be limited to voice. Tuscon Electric Power and UNS Electric on Friday supported using AUSF for “broadband development in rural and tribal communities, especially those that may be impacted by coal plant closures.” ACC Chairwoman Lea Marquez Peterson sought comments from tribes and cooperatives after only telecom companies commented initially on a possible AUSF update (see 2203280052).

Windstream agreed to pay $1.2 million and entered into a consent decree after an investigation into whether the provider violated FCC rural healthcare program rules on the determination of rural rates for services provided from FY 2017 through FY 2020, said an Enforcement Bureau order Tuesday. The settlement includes about $1 million in repayment to the Universal Service Fund and a $200,000 fine. Windstream "failed to use any of the three rate-setting methods available to service providers" and "has not been able to provide the commission with documents sufficient to demonstrate the processes used to set its rural rates," the order said. Windstream agreed to implement "enhanced compliance measures" as part of its participation in the program. “To facilitate the proper distribution of funds for these limited and invaluable resources, we vigorously pursue violations of the commission’s rural healthcare rules to ensure that funds designated for rural areas and health care providers are available to program participants with no entity receiving an improper or disproportionate share,” said acting Enforcement Bureau Chief Loyaan Egal. Windstream is "pleased that this matter has concluded," emailed a spokesperson.

Funds for Learning told FCC Wireline Bureau staff that the E-rate competitive bidding framework "is healthy and should not be changed," said an ex parte letter posted Monday in docket 21-455. The agency's NPRM proposing to establish a centralized online bidding portal "would conflict with state and local procurement regulations," the group said, citing the agency's "poor track record of creating effective online tools for applicants" (see 2112140062). The FCC should "continue to rely on local procurement officials to conduct local procurement," Funds for Learning said, saying the Universal Service Administrative Co. "has no experience managing procurement for school and library systems."

The Arizona Corporation Commission would like to hear from more than just telecom companies on possible sweeping changes to Arizona USF (AUSF), Chairwoman Lea Marquez Peterson wrote Monday in docket T-00000A-20-0336. Only Cox, Lumen, Frontier Communications and CTIA commented by the original March 18 deadline and nobody else has commented since, Peterson said. Four responses don’t provide “an adequate basis” for the commission to consider what AUSF changes could advance its connectivity and universal service goals, she said. The ACC “must also hear from the communities in Arizona that lack ‘broad connectivity’ as well as from non-traditional service providers,” said Peterson, specifying she wants comment from tribes, municipalities and electric cooperatives. They should comment by April 18, she said. The ACC didn’t get much support in March 18 comments for transitioning the fund to broadband; cable and wireless companies suggested canceling the fund (see 2203210031). The chairwoman's office "is conducting additional outreach," an ACC spokesperson said.

The FCC Wireline Bureau granted in part the Georgia Department of Public Health and ENA Healthcare Services' appeal of the Universal Service Administrative Co.'s decision to recover funding for FY 2015 and FY 2016 through the rural healthcare program, and its denial of funding for the state's Southeast Health District during FY 2017 and FY 2018, said an order in Wednesday's Daily Digest. The bureau remanded certain funding requests during FY 2017 to USAC and directed it to "calculate the funding commitment amounts" for these requests "using the documented urban rate" that the Southeast Health District had in its appeal. The bureau also granted a limited waiver of the program's competitive bidding rules. It disagreed that the Southeast Health District's failure to submit bid copies was a "minor clerical error" but granted the limited waiver because the health district took "careful steps" in "apparent good faith compliance" with competitive bidding requirements. It also cited USAC's recommendation that the health district file two forms "to circumvent USAC's internal application filing limitations in a manner to permit the timely rollout of service." The bureau remanded the appealed funding requests to USAC to determine whether the competitive bidding documentation complied with commission rules.

The FCC Wireline Bureau extended until May 13 the Connect America Fund Phase II eligible locations adjustment process (ELAP) registration deadline for prospective stakeholders, said a public notice Tuesday in docket 10-90 (see 2111290050). It also modified the challenge filing window to May 20 through Aug. 18. The bureau also made two changes to "simplify" the ELAP process, it said. Objections to an acknowledgement of confidentiality must file an objection "through an FCC-accredited account" that's managed by the Universal Service Administrative Co. The bureau will "share certified stakeholder information with participants ... directly through the ELAP module" instead of repopulating the ELAP map with stakeholder information.

The Schools, Health & Libraries Broadband Coalition asked the FCC to direct the Universal Service Administrative Co. to "make public certain non-confidential information" about the rural healthcare program's funding demand and extend the comment deadline by 30 days, replies by 60 days, after it does so, per a letter posted Tuesday in docket 17-130. The group sought information to provide "meaningful input" on a further NPRM seeking comment on program revisions (see 2203140052). Information requested included data on gross demand for rural healthcare funding for the past 10 years, annual data for "each of the last 10 years" of committed and disbursed funds for the telecom program and healthcare connect fund, and historical data for the healthcare connect fund internal cap.

Industry disagreed whether the FCC should pause some of its high-cost Universal Service Fund programs amid the recent $65 billion federal broadband support from the Infrastructure Investment and Jobs Act, in reply comments posted Friday in docket 21-476 (see 2202180046). Others debated whether to expand the fund's contribution base or turn to direct congressional appropriations. The FCC sought comments on USF's future as part of its report to Congress due by Aug. 12.

Few changes are likely to be made to the FCC’s draft Further NPRM on pole replacement disputes and notice of inquiry on digital discrimination in broadband access, aides told us. The items are expected to be unanimously approved during Wednesday’s commissioners' meeting.

Staff at state commissions pushed forward USF update efforts. The Oklahoma Corporation Commission is seeking comment and plans a meeting soon on draft legislation to update Oklahoma USF (OUSF) into a broadband-focused subsidy, the OCC emailed stakeholders Monday. The Regulatory Commission of Alaska (RCA) posted a staff proposal Friday to use Alaska USF (AUSF) to close the digital divide in places where voice remains the primary form of telecom access. The Oregon Public Utility Commission plans to post a state USF proposal within a week, it said Monday.