A draft NPRM on the USF budget asks some questions that concern stakeholders inside and outside the FCC. Others welcomed a look at the program's spending, since it has been some time since this area was examined through such a proceeding. The NPRM circulated Tuesday to commissioners asks many questions, isn't overly long and doesn't draw tentative or other conclusions, agency officials told us Wednesday. Some saw signals of where an eventual order might go in the NPRM's questions. They fear the potential for eventual spending curbs via what could be the first-of-a-kind-cap.

A draft NPRM on the USF budget asks some questions that concern stakeholders inside and outside the FCC. Others welcomed a look at the program's spending, since it has been some time since this area was examined through such a proceeding. The NPRM circulated Tuesday to commissioners asks many questions, isn't overly long and doesn't draw tentative or other conclusions, agency officials told us Wednesday. Some saw signals of where an eventual order might go in the NPRM's questions. They fear the potential for eventual spending curbs via what could be the first-of-a-kind-cap.

GCI Communication asked the FCC to reconsider a public notice that "purports" to give providers rate guidance for the USF rural healthcare telecom program (see 1902190031). The Wireline Bureau's Feb. 15 PN "entirely disregards detailed, on-the-record objections to which the Commission is legally obligated to respond and which show the guidance to be irrational and counterproductive, ignoring relevant evidence of market-based prices," petitioned GCI, posted Tuesday in docket 17-130: "It will be vulnerable on judicial review." Alaska Communications last week said the PN guidance "appears to overlook ... pragmatic realities" (see 1903140062).

Alaska Communications said FCC rural healthcare program rate guidance in a Feb. 15 Wireline Bureau public notice "appears to overlook ... pragmatic realities" of the USF mechanism. "To the Bureau’s credit, it is attempting to improve predictability and transparency," filed the carrier Wednesday in docket 17-310. "But such efforts will not succeed until the Commission modernizes its rules and puts the program on solid footing, with clear rules and processes announced in advance, a predictable funding schedule, and accountability for all." Alaska Communications noted seemingly "elementary" guidance that service providers should determine the rural rate before responding to a healthcare provider's request for bids and ensure the rate is sufficiently documented. That "overlooks the challenges faced by service providers in determining the rural rate under the current rules, and fails to account for the role of [Universal Service Administrative Co.] and the Commission in making this determination," the carrier wrote. Because "rules provide a series of options for determining the rural rate that must be applied sequentially, the service provider often has no assurance when it places a bid ... whether or under which option the rural rate will satisfy USAC."

CenturyLink asked FCC staff to not enforce USF withholding penalties and reporting rules, pending resolution of its petition to reconsider a staff determination and Universal Service Administrative Co. broadband deployment findings. A Feb. 22 Wireline Bureau letter notified CenturyLink it's "subject to these penalties and enhanced reporting requirements based on the Bureau’s determination that CenturyLink missed its 40 percent interim deployment milestone for Connect America Fund ('CAF') Phase II in Arkansas, Kansas, Montana, and Wisconsin," said the telco's stay filing in docket 10-90 posted Wednesday. Saying the bureau has no timetable for acting on that petition and USAC will begin withholding $4.45 million monthly in CAF support later in March, the carrier sought expedited consideration of its stay request: "These losses could well be unrecoverable. If CenturyLink’s support is withheld as ordered in the Noncompliance Letter, this may interfere with the company’s ability to continue to deploy broadband to additional locations. Under the CAF-II rules, the company is subject to graduated deployment milestones with each passing year, and significant penalties if it does not complete at least 95 percent of its total required deployment by the end of 2020." USAC auditors declined to verify certain locations as served "because of purported mismatches between the geocoordinate and address information in CenturyLink’s records and the coordinates and address information CenturyLink reported to USAC," said the recon petition. It cited "industrywide discussions" with regulators on multi-dwelling unit locations and "shortcomings" in USAC's high cost universal broadband (HUBB) system, and additional locations it reported Feb. 27 in the HUBB. The additional locations combined "with the Mismatch Locations alone, are sufficient to bring CenturyLink’s total locations served above the 40 percent compliance milestone," it said, suggesting recognition of other served locations would further increase compliance.

CenturyLink asked FCC staff to not enforce USF withholding penalties and reporting rules, pending resolution of its petition to reconsider a staff determination and Universal Service Administrative Co. broadband deployment findings. A Feb. 22 Wireline Bureau letter notified CenturyLink it's "subject to these penalties and enhanced reporting requirements based on the Bureau’s determination that CenturyLink missed its 40 percent interim deployment milestone for Connect America Fund ('CAF') Phase II in Arkansas, Kansas, Montana, and Wisconsin," said the telco's stay filing in docket 10-90 posted Wednesday. Saying the bureau has no timetable for acting on that petition and USAC will begin withholding $4.45 million monthly in CAF support later in March, the carrier sought expedited consideration of its stay request: "These losses could well be unrecoverable. If CenturyLink’s support is withheld as ordered in the Noncompliance Letter, this may interfere with the company’s ability to continue to deploy broadband to additional locations. Under the CAF-II rules, the company is subject to graduated deployment milestones with each passing year, and significant penalties if it does not complete at least 95 percent of its total required deployment by the end of 2020." USAC auditors declined to verify certain locations as served "because of purported mismatches between the geocoordinate and address information in CenturyLink’s records and the coordinates and address information CenturyLink reported to USAC," said the recon petition. It cited "industrywide discussions" with regulators on multi-dwelling unit locations and "shortcomings" in USAC's high cost universal broadband (HUBB) system, and additional locations it reported Feb. 27 in the HUBB. The additional locations combined "with the Mismatch Locations alone, are sufficient to bring CenturyLink’s total locations served above the 40 percent compliance milestone," it said, suggesting recognition of other served locations would further increase compliance.

The rollout of a Lifeline national verifier (NV) continues to spark concerns that many eligible low-income consumers will be thwarted from signing up for the program or de-enrolled if already subscribing, though there are signs of progress. The Universal Service Administrative Co., charged by the FCC with implementing the NV, lacks application programming interfaces (APIs) for providers and electronic access to many key government databases. That undermines automated verification of consumer eligibility, and manual processes are cumbersome, stakeholders told us.

FCC Commissioner Mike O'Rielly again objected to E-rate overbuilding of networks and asked Universal Service Administrative Co. to clarify its understanding of the rules and detail its treatment of applications. He's "very concerned" E-rate subsidies are reportedly being used to overbuild USF-backed fiber networks in some Texas school districts. "At least three regional-based consortia (representing 'Educational Service Centers') have sought proposals, via the Form 470, for the construction of Wide Area Networks (WANs) to provide Internet access to entire school regions, each covering well over ten thousand square miles, even though multiple fiber-based providers are already capable of serving the individual schools," he wrote Thursday to USAC CEO Radha Sekar, citing a Nov. 19 filing by telco cooperatives. The consortiums have filed Form 471 and "largely been approved" for "over $100 million to lay new fiber to schools already served by fiber networks. ... partially paid for with federal funds," O'Rielly said. "This number does not even include the subsidies requested for connecting individual schools within the WAN that were already connected to existing fiber networks." In one case, "a winning bidder was approved to receive over $40 million in special construction costs for a fiber build, even though most of the district already has fiber connectivity," he added. It's "likely that support for these fiber builds will also subsidize warehousing of fiber capacity not needed for E-Rate purposes." He asked Sekar to respond by April 1 to questions, including if E-rate rules let USAC fund: (1) special construction projects, whether through self-provisioned or commercial networks, that "duplicate, in whole or in part, fiber networks" built with federal funds; and (2) consortium "construction of a WAN to provide Internet access to the entire consortium, even where fiber-based providers are already capable of serving individual consortium members." He sought answers on the number of WAN-related applications, approvals and denials, and on any USAC warnings to the FCC about "overbuilding risk" or "an apparent gap" in rules permitting overbuilding approvals. USAC and FCC spokespersons didn't comment.

FCC Commissioner Mike O'Rielly again objected to E-rate overbuilding of networks and asked Universal Service Administrative Co. to clarify its understanding of the rules and detail its treatment of applications. He's "very concerned" E-rate subsidies are reportedly being used to overbuild USF-backed fiber networks in some Texas school districts. "At least three regional-based consortia (representing 'Educational Service Centers') have sought proposals, via the Form 470, for the construction of Wide Area Networks (WANs) to provide Internet access to entire school regions, each covering well over ten thousand square miles, even though multiple fiber-based providers are already capable of serving the individual schools," he wrote Thursday to USAC CEO Radha Sekar, citing a Nov. 19 filing by telco cooperatives. The consortiums have filed Form 471 and "largely been approved" for "over $100 million to lay new fiber to schools already served by fiber networks. ... partially paid for with federal funds," O'Rielly said. "This number does not even include the subsidies requested for connecting individual schools within the WAN that were already connected to existing fiber networks." In one case, "a winning bidder was approved to receive over $40 million in special construction costs for a fiber build, even though most of the district already has fiber connectivity," he added. It's "likely that support for these fiber builds will also subsidize warehousing of fiber capacity not needed for E-Rate purposes." He asked Sekar to respond by April 1 to questions, including if E-rate rules let USAC fund: (1) special construction projects, whether through self-provisioned or commercial networks, that "duplicate, in whole or in part, fiber networks" built with federal funds; and (2) consortium "construction of a WAN to provide Internet access to the entire consortium, even where fiber-based providers are already capable of serving individual consortium members." He sought answers on the number of WAN-related applications, approvals and denials, and on any USAC warnings to the FCC about "overbuilding risk" or "an apparent gap" in rules permitting overbuilding approvals. USAC and FCC spokespersons didn't comment.

Alaska Communications Systems asked the FCC and Universal Service Administrative Co. to fix problems with updating broadband deployment data in USAC's high cost universal broadband (HUBB) system. Noting it discovered inaccurate data it previously certified, ACS said it's now able to more precisely identify the locations to which it has deployed services through Connect America Fund Phase II support. "ACS is unable to modify the location identification coordinates or remove locations in the HUBB -- the system does not permit these updates," filed ACS, posted Monday in docket 10-90, attaching updated location data as part of a certification requirement. "The HUBB system allows manual edits to address locations but not deleting or updating the geo-coding information," the telco said, noting USAC personnel must handle certain edits and some corrections must be uploaded one location at a time. ACS understands other carriers had similar problems. "We are aware of the carrier’s complaints about the HUBB system, and are working to make certain modifications while maintaining the integrity of the data," an FCC spokesperson emailed. Friday, Frontier Communications told the FCC that further review showed the telco was in compliance with a 60 percent CAF II deployment milestone in Nebraska and New Mexico but fell just short in Arizona and Ohio. "Frontier reached more than 57% of its target in both states and thus does not trigger the Commission's non-compliance measures," the company said, noting a rule saying "a shortfall of less than 5% of locations for a given interim milestone should not be a concern warranting additional monitoring."