Of the dozens of comments filed this week in response to the FCC’s rulemaking on USF contribution reform, there was little agreement about whether to stick with a revenue-based system for assessing contribution fees, to move to a system that uses connections or numbers, or even whether to assess fees on broadband service. The only universal sentiment that might be teased out of the plethora of comments filed is that, as AT&T put it, the current system is “dysfunctional.” Carriers differed, but generally supported a modified revenue-based system, while VoIP providers preferred a connections-based system.
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.
Special access reform and FCC Chairman Julius Genachowski’s initial push for a vote on an order rejecting AT&T and Windstream pricing flexibility petitions are expected to be key areas for questions July 10 when commissioners are scheduled to appear before the House Communications Subcommittee for an oversight hearing. Other likely topics include USF/intercarrier compensation reform, progress on a voluntary incentive auction of broadcast spectrum and other spectrum issues, the Verizon Wireless/cable AWS deals and privacy regulations, said government and industry officials.
NASUCA passed resolutions Monday addressing the need for telecom regulation at a time when many states throughout the last year have embraced the industry-backed trend of deregulation. At its mid-year meeting in Charleston, S.C. the organization adopted firm stances on such controversial topics as VoIP regulatory oversight.
House appropriators voted to cut FCC FY13 funding 5 percent to $323 million, during an Appropriations Committee markup Wednesday. The bill, which now awaits consideration on the House floor, gives the FCC $24 million less funding than the agency’s FY13 request of $347 million. The committee removed a provision that would have prevented the FCC from implementing its requirement for broadcasters to post political file information online.
The FCC fined a company $1.7 million for “willfully or repeatedly failing to contribute fully” to the universal service, North American Numbering Plan, and local number portability funds; failing to pay regulatory fees when due; and filing inaccurate form 499s (http://xrl.us/bnb54d). The Florida-based telecom provider, Telseven, sold a service allowing consumers to obtain information about recently disconnected or out-of-service toll free numbers. Telseven charged a “Federal Universal Service Fund charge” and an “administrative recovery fee” to consumers, but according to the Universal Service Administrative Co., Telseven hadn’t made any USF payments since November 2007, and owed over $1 million in “delinquent USF contributions.” Telseven filed for bankruptcy in April and its website indicates it is no longer providing telecom services. Our efforts to reach Telseven for comment were unsuccessful.
*June 18 American Consumer Institute panel on “looming spectrum crunch,” noon, 2103 Rayburn building -- steve@theamericanconsumer.org
Senate Indian Affairs Committee members urged FCC Commissioner Mignon Clyburn to consider how proposed reforms of the Universal Service Fund could negatively affect rural and native communities, during a hearing Thursday. In particular, lawmakers took issue with the hurdles and cost of the FCC’s waiver process for telecommunications companies that cannot adjust to the USF reforms.
The FCC Wireline Bureau Thursday granted four petitions seeking temporary waivers of a June 1 deadline to implement new Lifeline eligibility rules (http://xrl.us/bm9yxb). The bureau gave USTelecom a six-month extension for 13 of the states indicated in its petition, as well as the eligible telecom carriers in those states that rely on the state to sign someone up for Lifeline. It also granted extensions for California to transition to a new third-party vendor and enable collection of partial Social Security information and dates of birth; and to Oregon and Colorado, which need to change their state laws to reflect new federal rules.
Everything’s up in the air as the further notice of proposed rulemaking on contribution reform contains many more questions than answers. The notice, approved unanimously by the FCC Friday, poses questions about what types of communications providers should contribute to the Universal Service Fund, how contributions should be assessed, and how to reduce the overall cost of contribution. The text of the notice was not released by our deadline.
Several rate-of-return carriers said Monday they would file for requests for waivers of new rules in the USF/intercarrier compensation order limiting reimbursable capital and operating costs. The form letters, sent by five carriers, all blamed “a flaw” in the quantile regression analysis caps “that penalizes companies who have been diligent to bring advanced services to rural areas.” The five new waiver requests would more than double the existing number of waiver requests Wireline Bureau Deputy Chief Carol Mattey said the FCC had received as of last week (CD April 12 p1).