The FCC approved 5-0 a rulemaking notice on a mobility fund to become part of the Universal Service Fund. The NPRM also seeks comments on reverse auctions to select carriers to build out 3G networks in unserved areas at a competitive cost. The program would not expand the size of the USF, and it would be paid for from funds that Verizon Wireless and Sprint Nextel voluntarily surrendered as merger commitments. The fund will be small, FCC officials acknowledged, offering as little as $100 million -- about 1/40th the amount already handed out by the federal government through Recovery Act programs.
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.
The Rural Cellular Association accused Verizon Wireless of attempting to “leverage mobility funding” despite the carrier’s commitment to give up Universal Service Fund support following its purchase of Alltel. RCA made the charge after Verizon Wireless, in an FCC filing, urged mobility fund support for rural carriers that enter into Verizon’s LTE licensing program. “Increasing the level of support used to expand Verizon’s reach, whether directly or through affiliate programs, is the opposite of their commitment,” said RCA President Steve Berry. “If Verizon is serious about expanding mobile broadband in rural areas, they should live up to the spirit of the open access provisions of the C block and focus on devices compatible with all 700 MHz spectrum.” “RCA is wrong to suggest that Verizon Wireless is not honoring its merger commitment,” said Tamara Preiss, vice president of federal regulation at Verizon Wireless. “Verizon Wireless’s voluntary commitment is limited to phasing out high-cost support from legacy USF mechanisms. That condition is expressly superseded if and when the FCC adopts new mechanisms.” Preiss said Verizon was one of several carriers represented at a recent meeting at the FCC on the mobility fund. The FCC is slated to vote on a notice of proposed rulemaking on the fund at its meeting Thursday.
Washington’s Utilities and Transportation Commission seeks comment on an update of a “concept paper” proposing how the state should restructure its universal service fund, the commission said Thursday. The extensive document, submitted Wednesday by the Washington Independent Telecommunications Association, reflects revisions to a July proposal and goes into significant detail in recommendations. The commission tentatively set Oct. 4 for a third workshop on the document and related matters. Comments are due Sept. 17.
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."
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.