Rural telcos have asked the White House to help save them from newly passed Universal Service Fund reforms. NARUC, meanwhile, decided to join the court challenge against October’s FCC USF reforms (CD Oct 28 p1), a state official told us.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
Native Americans became the first parties to oppose petitions to reconsider last fall’s universal service reforms, the record on docket 10-90 showed. The National Congress of American Indians and Navajo telecom regulators filed separate, but similarly worded, briefs to oppose RLEC’s request for exemption of some of the new rules’ guidelines for deploying broadband in tribal areas (CD Oct 28 p1).
Civil rights and “digital divide” erasure advocates gave mixed reviews to FCC Chairman Julius Genachowski’s Lifeline reform proposals Monday. As expected (CD Jan 9 p7), Genachowski promised what he called “cost controls” and “a budget” for Lifeline and Link-Up, with most of his efforts focused on rooting out some 200,000 duplicate claims and building a database to prevent future “waste.” The draft order will circulate Tuesday, Genachowski said.
FCC Chairman Julius Genachowski plans to circulate an order on the Lifeline program as early as Tuesday, telecom and commission officials told us. As Genachowski did with the high-cost portion of the Universal Service Fund last fall (CD Oct 28 p1), the coming order is expected to put Lifeline on what the chairman will call “a budget.” It will not formally cap the Lifeline portion of USF, telecom and FCC officials said. It’s expected to address eligibility requirements and how to remove people from the Lifeline rolls if they're not eligible, telecom officials said.
The FCC understands that some companies may not be able to meet newly imposed deadlines for auditing their books under new Universal Service Fund rules, Wireline Bureau Deputy Chief Carol Mattey said Thursday. “We are well aware of the challenges of companies that have not been able to submit to a financial audit,” Mattey said in a webinar hosted by USTelecom. “I do very much appreciate the time-sensitivity of it and I think we will be able to give some guidance on the timing of that. We recognize that certain things may not be able to be implemented by the deadline of this year.”
T-Mobile USA might be ready to re-emerge as a competitor now that the deal with AT&T is over: The carrier is seeking low income-only eligible telecommunications carrier status in five states. Even as the deal with AT&T was moving forward, T-Mobile was quietly seeking certification as an ETC in four states. Meanwhile, it’s protesting the FCC’s 2011 Universal Service Fund order’s treatment of carriers designated as ETCs. Its petition for reconsideration or clarification (http://xrl.us/bmnmv4) of the FCC’s USF revamp order was the first major filing by T-Mobile since AT&T’s proposed buy of the company was officially terminated Dec. 19.
Petitions for reconsideration of the new Universal Service Fund rules came in from every corner of the telecom world. A review of docket 10-90 revealed no frontal challenges to the FCC’s October reforms (CD Oct 28 p1), but, as had occurred in the months-long runup to the reforms, each sector of industry gave a laundry lists of grievances to the FCC.
The FCC can expect to be flooded with petitions to reconsider its Universal Service Fund reforms (CD Oct 28 p1), telecom officials said and the public record showed. Petitions were expected from nearly every sector of the telecom industry, from state regulators to rate-of-return carriers, several telecom officials said. The commission is drafting a sua sponte -- of its own accord -- reconsideration in an effort to head off one of the thorniest issues in the docket -- whether local rates on local traffic exchanged between wireless and wireline companies should be subject to bill-and-keep immediately, FCC and telecom officials told us.
The 10th U.S. Circuit Court of Appeals will hear challenges to the FCC’s Universal Service Fund order, it was announced late Wednesday. At least 13 challenges have been filed in various circuits; the 10th in Denver was picked in the judicial lottery to take the case. But even as the case was winding its way through the system, FCC officials on Thursday warned lawyers and lobbyists for wireless companies that the commission was hoping to launch a further rulemaking on reverse auctions as early as next month, with a goal of having the first auctions by the end of Q3 2012.
NTCA held a flurry of last-minute meetings with FCC staff just days before the group filed an appeal of the commission’s Universal Service Fund order (CD Dec 12 p7), records on docket 10-90 showed. NTCA Vice President Michael Romano joined executives from Vantage Point Solutions and TDS in two meetings with Wireline Bureau staff on Wednesday, one meeting addressing the costs of meeting increased speed standards and the second meeting addressing traffic exchanges, according to an ex parte dated Friday and released Monday (http://xrl.us/bmks85). A day later, Romano joined executives from the National Exchange Carrier Association, OPASTCO and TDS Telecom to discuss caps on operating and capital expenses, a separate ex parte notice showed (http://xrl.us/bmktat).