Competitive eligible telecommunications carriers won’t be able to help themselves to money left over from the surrender of Verizon Wireless’s and Sprint Nextel’s high-cost universal service funds, the FCC said. In an order and rulemaking notice released late Friday, the commission said the money should be kept “as a potential down payment on proposed broadband universal service reforms … including to index the E-rate funding cap to inflation.” The commission sought comment on whether it should amend its rules permanently “to facilitate efficient use of reclaimed excess high-cost support” and on a proposed rule change that would “reclaim legacy support surrendered by a competitive ETC when it relinquishes ETC status in a particular state."
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.
About 66 percent of Iowans had broadband at home in April, said a report put together by a nonprofit state affiliate of Connected Nation with Iowa’s Utilities Board and its Broadband Deployment Governance Board. The report, the first in a series that Connect Iowa plans on the topic, is to be formally released Wednesday. The document is based on data collected for an interactive map at http://connectiowa.org/mapping/interactive_map.php.
Wireless has already faced deep cuts in universal support and the goal of the FCC now should be to encourage more deployment of mobile broadband, CTIA said in replies on an inquiry and rulemaking on changes to the high-cost universal service program. As a result of the 2008 cap on support for competitive eligible telecom carriers, wireless carriers and other CETCs have already lost $800 million in funding, the group said. The notices follow up on recommendations in the National Broadband Plan that the Universal Service Fund be restructured to pay for broadband.
The FCC shouldn’t subject VoIP to state universal service fees without first seeking comment, said House Commerce Committee Ranking Member Joe Barton, R-Texas, and Communications Subcommittee Ranking Member Cliff Stearns, R-Fla. In a letter Tuesday to Genachowski, the Republicans said the FCC should “afford this issue due consideration in a notice of proposed rulemaking, rather than just address it in a declaratory ruling.” Levying state fees “would alter settled expectations and could have a significant impact on investment, economic growth, and broader universal service reform,” they said. “Addressing this in a declaratory ruling would not only provide short shrift to a matter of consequence, it could also raise additional issues about retroactive applicability of such fees.” The FCC circulated an item July 22 responding to a petition by the Nebraska Public Service Commission and the Kansas Corporation Commission for declaratory ruling that states may assess Universal Service Fund (USF) fees on VoIP intrastate revenue (CD Aug 9 p9). States “disagree with any suggestion that a rulemaking is necessary,” said Brad Ramsay, general counsel of the National Association of Regulatory Utility Commissioners. Vonage has stated it doesn’t object to paying state USF fees, and the FCC previously agreed that the statute requires Vonage to pay, he said. “Blocking these assessments can only increase pressure on the already burdened federal USF programs."
The FCC concludes in its sixth broadband deployment report that 14-24 million Americans still can’t get high-speed access, and the immediate prospect for deployment to the unserved Americans is “bleak.” As expected (CD July 19 p1), commission Republicans Robert McDowell and Meredith Baker issued vigorous dissents from the report and its finding that the FCC can’t conclude that broadband is being deployed to all Americans in a “reasonable and timely” manner.
The House Communications Subcommittee approved Internet accessibility legislation in a voice vote Wednesday afternoon, with a manager’s amendment by Subcommittee Chairman Rick Boucher, D-Va. Boucher said he hoped to offer another manager’s amendment later to address “remaining points of difference,” including those related to video description rules. Meanwhile, disabilities rights advocates were upset after learning the amendment cut out a provision that would subsidize broadband services and equipment for people with disabilities.
The FCC plans to complete a USF overhaul next year, said Commissioner Meredith Baker at a Senate Commerce Committee hearing Thursday. Baker and her two FCC colleagues on the Federal-State Joint Board on Universal Service -- Commissioners Mignon Clyburn and Michael Copps -- agreed USF was broken. But they disagreed whether they could revamp USF without first reclassifying broadband transport under Title II of the Communications Act.
How universal service fits into Congress’ planned rewrite of the Telecom Act is expected to come up at a Senate Commerce Committee hearing Thursday on the Universal Service Fund, industry lobbyists said Monday. The Senate hearing opens a new avenue of Hill dialog on USF, an issue that lately has been mainly the domain of the House. House and Senate Commerce Committee staff meetings on the telecom law revamp start Friday (CD June 21 p8).
Nexus Communications’ Reachout Wireless isn’t entitled to federal universal service funds in Tennessee because its Eligible Telecommunications Carrier (ETC) designation there only applies to wireline, the Regulatory Authority ruled Monday. “Nexus has misled our legislators and consumers that the TRA has the power to prevent Nexus from providing wireless service,” authority chair Sara Kyle said. “The TRA does not have jurisdiction over wireless providers, and because Nexus never applied to the FCC for proper certification, Nexus does not qualify for reimbursement from federal universal service funds.” The ruling reaffirms that Nexus “is not and has never been” approved under Tennessee law for federal USF reimbursement on 68 free minutes per month it was offering wireless customers qualifying for the Lifeline program, the regulator said. “Nothing in the TRA’s decision interferes with the ability of Nexus to continue to provide wireless service to its customers,” the authority said. “It merely precludes federal reimbursement to the company for the phones and free minutes it gives to its wireless Lifeline customers.” Nexus still can ask the FCC for ETC status, the state agency said. That would qualify the company for federal USF reimbursement for its “free” offerings in Tennessee, the authority said. The regulator advised low-income Tennesseans wanting Lifeline or Link-up service that Tracfone and Virgin Mobile are designated as ETCs and operate in the state.
Cable operators large and small largely are unified on many issues that affect the industry, some of them high profile, that are pending before the FCC, our survey of executives found. Retransmission consent deals, where pay-TV operators contend broadcasters force them to pay unfair carriage fees, are the latest example of a unified message across operators of all sizes (CD May 20 p4) and the NCTA, representing big operators and programmers, and the small-operator lobbying group American Cable Association (ACA). Concern about FCC Chairman Julius Genachowski’s plan to reclassify broadband transport under parts of Title II and a desire to use cheap HD set-top boxes with integrated navigation and security features are shared by many cable system owners.