Most state commissions and organizations representing state interests believe it's a bad idea to streamline the eligible telecommunications carrier (ETC) designation process for the Lifeline program. The filings in docket 11-42, among others, were in response to the FCC’s NPRM, for which comments were due Monday. Many of the state commissions believe the best way to curb waste, fraud and abuse within the program is to let the states continue to use their own designation process. Others believe this process will have to be revisited once the program is updated, because the FCC will need to see if things are working and be open to changing the things that aren’t. None of the states said it was a bad choice to include broadband in the coverage, but some of the state organizations recognized the need for a cap of some sort to keep the program from swelling too much.

Most state commissions and organizations representing state interests believe it's a bad idea to streamline the eligible telecommunications carrier (ETC) designation process for the Lifeline program. The filings in docket 11-42, among others, were in response to the FCC’s NPRM, for which comments were due Monday. Many of the state commissions believe the best way to curb waste, fraud and abuse within the program is to let the states continue to use their own designation process. Others believe this process will have to be revisited once the program is updated, because the FCC will need to see if things are working and be open to changing the things that aren’t. None of the states said it was a bad choice to include broadband in the coverage, but some of the state organizations recognized the need for a cap of some sort to keep the program from swelling too much.

Commenters voiced substantial support for FCC proposals to extend Lifeline USF subsidies to broadband and restructure oversight, with differences over some priorities and many implementation details, including among the Bells. Expanding Lifeline support would boost broadband adoption and shifting administrative responsibility away from telecom providers would increase efficiency, many said in comments in docket 11-42 responding to a Further NPRM (see 1506180029). Some said the FCC should proceed carefully and focus on enforcing budget discipline and streamlining program administration. Monday was the filing deadline for initial comments, but some comments hadn't been posted on the commission’s website Tuesday, while some parties filed comments early (see 1508180069).

Commenters voiced substantial support for FCC proposals to extend Lifeline USF subsidies to broadband and restructure oversight, with differences over some priorities and many implementation details, including among the Bells. Expanding Lifeline support would boost broadband adoption and shifting administrative responsibility away from telecom providers would increase efficiency, many said in comments in docket 11-42 responding to a Further NPRM (see 1506180029). Some said the FCC should proceed carefully and focus on enforcing budget discipline and streamlining program administration. Monday was the filing deadline for initial comments, but some comments hadn't been posted on the commission’s website Tuesday, while some parties filed comments early (see 1508180069).

The FCC will generally calculate price-cap telco transitional USF support using the same time period, regardless of when the carriers made their Connect America Fund Phase II decisions, the Wireline Bureau said Monday in a public notice in docket 10-90. The bureau said under commission rules carriers electing CAF Phase II support in states where that support is less than their CAF Phase I frozen support will transition to model-based support over several years. In addition to their Phase II support, carriers are to receive 75 percent of the difference between Phase I frozen support and model-based support in the first year, 50 percent of the difference in the second year and 25 percent of the difference in the third year, the bureau said. For administrative convenience, the bureau directed the Universal Service Administrative Co. to calculate the transition funding years, starting this year, as running from Aug. 1 through July 31 of the next year, whether the carriers made their Phase II acceptance decisions on the deadline date of Aug. 28 or before (see 1508270068) -- except USAC was directed to make adjustments if necessary for the two carriers that were authorized to being receiving Phase II support prior to its August processing deadline (Frontier Communications and Windstream were the first two).

The FCC authorized four telcos to receive almost $950 million in Connect America Fund support, the Wireline Bureau said Friday in a public notice in docket 10-90 after the companies Thursday announced the states for which they had decided to accept Phase II funding (see 1508270068). CenturyLink will receive $505.7 million, AT&T will receive $427.7 million, Consolidated Communications will receive $13.9 million and Cincinnati Bell will receive $2.2 million for 2015. The bureau also issued a public notice saying Verizon had accepted $48.6 million Phase II support in California and Texas, conditioned on regulatory approvals of its wireline system sales in those two states to Frontier Communications. Responding to a Verizon request to defer CAF support until the deal closes, the bureau directed Universal Service Administrative Co. to suspend support to Verizon in the two states until further notice. In total, 10 price-cap carriers have accepted up to $1.5 billion in CAF Phase II annual support through 2020 to provide 10/1 Mbps broadband to almost 7.3 million consumers in rural, high-cost areas of 45 states, said Wireline Bureau Deputy Chief Carol Mattey in a Friday blog post. “The funding that will flow to these areas will go a long way toward closing the digital divide isolating rural America.” Mattey said some companies didn’t accept support in some states, but the agency is preparing to “unleash the power of market competition to provide broadband” in those areas. “The FCC will open the door for other companies, including cable companies, neighboring rate-of-return carriers, electric companies, satellite companies and fixed-wireless providers, to compete for the first time with the price cap carrier incumbents to win these subsidies through a market-based auction,” she said, referring to a reverse auction the commission is developing in which the low bidder would win the subsidy in a high-cost area. “Our Rural Broadband Experiments program demonstrated that competitive auctions can draw interest from a variety of providers willing to provide faster broadband at lower cost, and we now are eager to implement competitive bidding on a larger scale across the country.”

Some regulators and telcos want state and federal USF contribution revisions, while others representing wireless ISPs would rather see the entire system shut down and overhauled, said speakers during a National Regulatory Research Institute tele-seminar. Speaking Thursday, the deadline day for telcos to accept FCC Connect America Fund Phase II offers (see 1508270068), experts said the funds wouldn't cover building out all networks to FCC standards, so it’s up to states to try to supplement that spending to improve the networks' reach to rural areas. The companies are aware the investment needed will be more than the funding, so they're ready to work with each state on how far it will go and whether other assistance is available, telco representatives said.

The FCC authorized four telcos to receive almost $950 million in Connect America Fund support, the Wireline Bureau said Friday in a public notice in docket 10-90 after the companies Thursday announced the states for which they had decided to accept Phase II funding (see 1508270068). CenturyLink will receive $505.7 million, AT&T will receive $427.7 million, Consolidated Communications will receive $13.9 million and Cincinnati Bell will receive $2.2 million for 2015. The bureau also issued a public notice saying Verizon had accepted $48.6 million Phase II support in California and Texas, conditioned on regulatory approvals of its wireline system sales in those two states to Frontier Communications. Responding to a Verizon request to defer CAF support until the deal closes, the bureau directed Universal Service Administrative Co. to suspend support to Verizon in the two states until further notice. In total, 10 price-cap carriers have accepted up to $1.5 billion in CAF Phase II annual support through 2020 to provide 10/1 Mbps broadband to almost 7.3 million consumers in rural, high-cost areas of 45 states, said Wireline Bureau Deputy Chief Carol Mattey in a Friday blog post. “The funding that will flow to these areas will go a long way toward closing the digital divide isolating rural America.” Mattey said some companies didn’t accept support in some states, but the agency is preparing to “unleash the power of market competition to provide broadband” in those areas. “The FCC will open the door for other companies, including cable companies, neighboring rate-of-return carriers, electric companies, satellite companies and fixed-wireless providers, to compete for the first time with the price cap carrier incumbents to win these subsidies through a market-based auction,” she said, referring to a reverse auction the commission is developing in which the low bidder would win the subsidy in a high-cost area. “Our Rural Broadband Experiments program demonstrated that competitive auctions can draw interest from a variety of providers willing to provide faster broadband at lower cost, and we now are eager to implement competitive bidding on a larger scale across the country.”

Some regulators and telcos want state and federal USF contribution revisions, while others representing wireless ISPs would rather see the entire system shut down and overhauled, said speakers during a National Regulatory Research Institute tele-seminar. Speaking Thursday, the deadline day for telcos to accept FCC Connect America Fund Phase II offers (see 1508270068), experts said the funds wouldn't cover building out all networks to FCC standards, so it’s up to states to try to supplement that spending to improve the networks' reach to rural areas. The companies are aware the investment needed will be more than the funding, so they're ready to work with each state on how far it will go and whether other assistance is available, telco representatives said.

The FCC affirmed Wireline Bureau denial of petitions by three small companies seeking to participate in the agency’s rural broadband experiment program. In an order Thursday, the full commission denied applications for review filed by Last Mile Broadband, Lennon Telephone Co. and Rural Broadband Service Corp. (RBSC), which sought waivers of financial qualification requirements. The companies were among the provisionally selected bidders that the bureau removed from consideration after they didn't provide three years of audited financial statements and/or a credit commitment letter from an acceptable bank. The full commission said the bureau’s strict enforcement of the filing duties was appropriate to ensure the experiments didn't delay offers of model-based Connect America Fund Phase II USF support to price-cap carriers. “Contrary to the suggestion of the petitioners, it was not arbitrary and capricious for the Bureau to apply those requirements evenly to all applicants, particularly given that there were so many other applicants that were able to meet the financial and technical information requirements without waiver,” the order said. “We find that it was appropriate for the Bureau to act expeditiously in order to finalize the list of areas that would be included and excluded from the Phase II offer of support.” The deadline for price-cap carrier CAF Phase II decisions was Thursday (see 1508270068). Commissioner Mignon Clyburn partially dissented, criticizing the “unnecessarily unyielding” denial of the Lennon application. She said Lennon submitted reviewed financial statements consistent with those it uses to receive high-cost USF support. “So, reviewed financial statements are sufficient for rate-of-return carriers to receive approximately $2,000,000,000 in universal service annually, but not sufficient to provide $60,000 in support to the same carrier for a rural broadband experiment?” Clyburn asked. She said the FCC had the means to address any concerns through Lennon’s USF participation. She also said the regulatory "inflexibility" could discourage small entities from participating in USF Phase II competitive bidding and leave some consumers in hard-to-serve areas without broadband. “While I appreciate that strict adherence to the rules may be appropriate for entities that do not currently receive universal service support because the Commission may be unable to recoup funding, that is not the case here,” she said. But the commission said Lennon mistakenly believed the reviewed financial statements were sufficient and didn't even seek a timely waiver. "Applicants were expected to familiarize themselves fully with the Commission's rules and requirements," the order said.