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 Industry News

USF Faces New Threats Under New Administration?

Recent meetings at the FCC with representatives from the offices of at least one Commissioner, the Wireline Competition Bureau, and the Office of Strategic Planning have included exchanges that raise serious questions regarding the continued availability of existing levels of Universal Service Fund (USF) support for rural carriers.

A common outlook at the FCC is that the traditional circuit-switched voice network is rapidly evolving into a national packet-switched broadband network, and that the current USF will need to morph likewise into a broadband program. Whereas the presentations at the FCC’s September 29, 2009, broadband meeting recognized that broadband deployment and operating costs will be high in rural areas, this does not necessarily translate into a revised broadband high-cost program that will provide rural carriers with USF support in comparable or greater amounts than they are receiving today.

Rather, various FCC personnel have indicated in recent meetings that that the "best approach" might be to terminate or "blow up" the existing USF program rather than tweaking it, and to start over with a new broadband high cost program that may or may not encompass substantial numbers of current USF recipients. To be very specific,

there have been several very clear warnings that there is no guarantee that rural carriers will continue to receive their existing levels of support from a modified or re-placement USF. Some FCC staffers appear to believe that rural telephone companies, in particular, have done a good job in deploying broadband to substantial percentages of their customers, and that most or all future broadband high-cost support should be directed to geo-graphic areas and low-income groups that do not presently have significant broadband access or take rates.

Since the USF program was implemented in the mid-1980s, some of FCC staffers have been hostile to it. But just because certain FCC staffers may not like certain USF programs has not previously meant that the FCC would significantly curtail or eliminate them. However, given the major focus of the current FCC upon the National Broadband Plan that it will present to Congress by February 17, 2010, statements by staffers associated with the development of that Plan regarding potential changes in the distribution of future USF support should be taken seriously.

At a very minimum, rural carriers should be prepared to demonstrate to the FCC and Congress that they still need to make substantial investments to continue providing their customers with broadband facilities and services "reasonably comparable" in quality and price to those available in urban areas, and that they will need substantial continuing USF support to furnish such facilities and services at affordable rates. It appears from the tenor of FCC meetings and FCC reports on the progress of its Broadband Plan that these demonstrations will need to be much more detailed and more thoroughly substantiated by data than in the past. For instance, the FCC appears to be much more focused upon the nature and amount of the costs necessary to deploy and operate broadband facilities and services in various types of geo-graphic areas, the extent to which certain costs can be reduced or eliminated, and the possibility that increased customer revenues for broadband services can replace or reduce USF revenue streams.

We note also that Congressmen Rick Boucher (D-Va.) and Lee Terry (R-Neb.) are preparing another version of the Terry-Boucher and Boucher-Terry bills that have been offered but not enacted during the last two Congresses. The current version of the bill has not yet been completed and proffered. However, early discussions indicate that it is likely to contemplate the provision of approximately the current level of capped USF support to rural telephone companies. It is unclear at this time whether a new Boucher-Terry bill will make it by Chair-man Henry Waxman (D-Calif.) and Ranking Member Joe Barton (R-Texas) of the House Commerce Committee and be passed by the House, whether there will be an appropriate companion bill offered and enacted in the Senate, and whether an ultimate Senate-House USF  reform or telecommunications bill will be signed into law by President Obama. The rural telecom industry must determine whether (1) a USF capped at current support levels, while not an ideal solution, is preferable to a possible significant curtailment or elimination of USF support to rural carriers under some potential versions of the National Broadband Plan; and (2) what can be done to best protect the industry’s ability to provide needed rural ser-vices.

Whereas USF and access revenue streams have been under attack since 1995, the remainder of 2009 and 2010 are likely to be a critical and trying period for the rural telephone industry. We are monitoring FCC and Congressional developments and working to develop options and solutions. We welcome your comments.  (Source:  BloostonLaw )

RUS Celebrates 60 Years of Telecommunications Loan and Grant Programs
   

October 28 marked the 60th anniversary of the Rural Utilities Service (RUS) telecommunication loan and grant programs.  The Telephone Loan Program, established with the support of President Harry S. Truman, provided communications connectivity and access to emergency services to millions of rural families and businesses. 

RUS kicked off a year-long anniversary celebration with an event October 27 held in conjunction with the Rural Development North East State Directors conference in Cooperstown, N.Y.  Additional 60th anniversary activities are planned, with the next scheduled for November 9 in Des Moines, Iowa at the Iowa Telecommunications Association’s annual convention.

For more information about the anniversary activities and events, contact RUS Deputy Administrator Jessica Zofulo (202-720-0696) or RUS Outreach Assistant Kathie Klass (202-720-2284).

OPASTCO Meets with FCC to Discuss USF, Intercarrier Compensation Reform

On Tuesday, Oct. 27, OPASTCO met with the FCC's Wireline Competition Bureau to discuss Universal Service Fund (USF) and intercarrier compensation reform in the context of the FCC's National Broadband Plan.  OPASTCO presented a broad outline for a plan for rural ILEC service areas that would enable the ongoing achievement of affordable, ubiquitous, high-speed broadband services in these territories.
    

To read this outline in its entirety, please open OPASTCO's ex parte presentation on the OPASTCO Website.  For more information, please contact Stuart Polikoff, OPASTCO's vice president of regulatory policy, at sep@opastco.org or 202/659-5990.

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FCC News

Comments on Potential Creation of Broadband Clearinghouse Due Nov. 16

The FCC is now accepting comments regarding whether or not it should create a broadband clearinghouse in order to facilitate easy access to broadband best practices, as part of development of the National Broadband Plan.  The Commission says that such a clearinghouse could reduce information barriers for various entities that seek insight into better using broadband infrastructure, or into broadband deployment or adoption projects.  It also notes that a clearinghouse could provide information and a forum for policymakers and other interested parties to gather and contribute data.
     Please refer to the related Public Notice for specific questions that comments should address.  Comments are due Nov. 16.

FCC Now Accepting Comments on Draft Net Neutrality Rules

The FCC  issued a Notice of Proposed Rulemaking (NPRM) detailing draft rules pertaining to net neutrality.  The NPRM contains a considerable scope of related topics and questions, and the FCC notes that it seeks comments on both the proposed rules and their rationales as it seeks "to create a balanced framework that gives consumers and providers of Internet access, content, services, and applications the predictability and clarity they need going forward while retaining [the Commission's] ability to respond flexibly to new challenges."
     Comments are due Jan. 14, 2010.  Reply comments are due March 5, 2010.  Please visit the FCC's Website to view statements made by the Commission, as well as a news release featuring a summary of this NPRM.

Transcript of FCC Workshop on Economics in Broadband Competition Now Available

The FCC has released a transcript of its Oct. 9 broadband staff workshop on economic issues in broadband competition.
     To view transcripts and archived webcasts of other past broadband workshops, please visit the FCC's Broadband.gov Website.

FCC’s Broadband Task Force Submits NBP Status Report

The FCC’s Broadband Task Force has submitted a status report on the National Broadband Plan (NBP), which must be delivered to Congress by February 17, 2010. The presentation includes an initial report on the current state of broadband in the U.S., and describes the frame-work the team will use to both analyze gaps in broad-band’s reach and find solutions to close those gaps. Comprehensive in scope, the presentation is designed to give Commissioners the information they need to question staff, provide feedback, and recommend any mid-course corrections that may be needed. The public is also encouraged to comment on the findings.

To date, the broadband task force’s efforts have focused on gathering the facts and data needed to develop the plan. Its efforts have included 26 workshops and hearings on key topics, with another six scheduled. About 230 witnesses have testified during these sessions. At the same time, nearly 41,000 pages of written comments have been filed with the FCC in response to its National Broadband Plan Notice of Inquiry, with another 143 responses to Public Notices requesting more focused information. Nearly 40 blogs have been posted on the FCC’s new Blogband page, which have prompted over 300 comments to date, all of which will be included in the official record. Following are some of the key areas outlined in the presentation.  Enter here to see the entire article summarizing the report.  (Source:  BloostonLaw)

Comments on Public Safety and Broadband Deployment in Rural, Tribal Areas, Disabled Broadband Access Due Dec. 1

The FCC is now accepting comments regarding broadband deployment for public safety in rural and tribal communities, as well as public safety broadband communications to and from persons with disabilities.  These comments will help the Commission inform its National Broadband Plan, which is due to Congress next February.
     Comments are due Dec. 1.  Please refer to the related Public Notice for the specific questions which the Commission requests that comments address.

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Federal Legislation

House Subcommittee Approves Caller ID, Emergency Communications Grant Program Bills

The House Subcommittee on Communications, Technology, and the Internet approved legislation including the Truth in Caller ID Act of 2009 and funding for the interoperable emergency communications grant program:

The Truth in Caller ID Act of 2009 (H.R. 1258), introduced by Reps. Eliot Engel (D-N.Y.) and Joe Barton (R-Texas), would direct the FCC to prohibit caller ID "spoofing," where a caller falsifies the original caller ID information during the transmission of a phone call.

H.R. 366, introduced by Rep. Jane Harman (D-Calif.), would extend for two years the Public Safety Interoperable Communications grant program administered by the National Telecommunications and Information Administration (NTIA) and the Department of Homeland Security.

Rural House Members Ask FCC to Investigate Google Voice

On Oct. 7, several members of the House of Representatives who represent predominantly rural districts sent a letter to the FCC requesting that the Commission investigate "the nature and function" of Google Inc.'s voice service, Google Voice.
    

In particular, the House members wrote that they were concerned that Google may block calls from Google Voice users to some rural telephone exchanges for reasons to reduce expenses related to access charges.  "We understand that Google has asserted Google Voice is not a 'traditional' telephone service-- despite its use of 10-digit telephone numbers and its ability to connect calls between telephones through a local exchange carrier-- and, therefore, should not be treated as a common carrier service," said the members.  "Instead, Google maintains it ought to be allowed to block calls to rural telephone exchanges-- a position we find ill conceived and unfair to our rural constituents."
    

The letter's signatories include Reps. Steve Buyer (R-Ind.); Charlie Melancon (D-La.); John Shimkus (R-Ill.); John Barrow (D-Ga.); Leonard Boswell (D-Iowa); Bobby Bright (D-Ala.); Lincoln Davis (D-Tenn.); Parker Griffith (D-Ala.); Stephanie Herseth-Sandlin (D-S.D.); John Kline (R-Minn.); Nick Rahall (D-W. Va.); Michele Bachmann (R-Minn.); Heath Shuler (D-N.C.); Bennie Thompson (D-Miss.); Lee Terry (R-Neb.); John Boozman (R-Ark.); Dean Heller (R-Nev.); Blaine Luetkemeyer (R-Mo.); Marsha Blackburn (R-Tenn.); and Jo Bonner (R-Ala.).

McCain Introduces "Internet Freedom Act of 2009"

U.S. Senator John McCain (R-Ariz.) has introduced the Internet Freedom Act of 2009 that would prohibit the FCC from enacting rules that would regulate the Internet. The Commission has adopted a Notice of Proposed Rulemaking (NPRM) to propose "net neutrality" rules (see separate story above).

Specifically, Sen. McCain said in a statement, the Commission will seek to impose "net neutrality" rules that would reign in the network management practices of all Internet service providers, including wireless phone companies. "This government takeover of the Internet will stifle innovation, in turn slowing our economic turnaround and further depressing an already anemic job market. Outside of health care, the technology industry is the nation's fastest growing job market. Innovation and job growth in this sector of our economy is the key to America's future prosperity. In 2008, while most industries were slashing jobs in the worst economy in nearly 30 years, high tech industries actually added over 77,000 good high-paying jobs. Just this month, Google and Yahoo both released positive earnings reports." McCain said "the wireless industry exploded over the past twenty years due to limited government regulation. Wireless carriers invested $100 billion in infrastructure and development over the past three years which has led to faster networks, more competitors in the marketplace and lower prices compared to any other country. Meanwhile, wired telephones and networks have become a slow dying breed as they are mired in state and Federal regulations, universal service contribution requirements and limitations on use. Today I'm pleased to introduce the Internet Freedom Act of 2009 that will keep the Internet free from government control and regulation. It will allow for continued innovation that will in turn create more high-paying jobs for the millions of Americans who are out of work or seeking new employment. Keeping businesses free from oppressive regulations is the best stimulus for the current economy."

Meanwhile, Sen. Jay Rockefeller (D-W.V.) and Rep. Henry Waxman (D-Calif.), the chair-men of Congress' commerce committees, sent a letter to FCC Chairman Julius Genachowski signaling their sup-port for the draft rules. The two, who have expressed support for net neutrality in the past, said that they con-tinued to support "policies that protect consumers and promote an open Internet," and expected to commission to "make every effort to consider all voices prior to voting on final rules."  (Source: BloostonLaw )

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Broadband Stimulus

At the Oct. 27 Senate Commerce Committee oversight hearing, NTIA and RUS announced that first round broadband stimulus grant and loan awards will be made from mid-December through mid-February.

NTIA/RUS also announced that there will be only one additional application round (rather than two) before the statutory Sept. 30 deadline.

Comments sought on another batch of applications by Nov. 20.  On Thursday, October 22, RUS and NTIA reported that they have updated the BroadbandUSA Mapping Tool and Searchable Database to include approximately 40 additional broadband stimulus applications (and corresponding Public Notice Filings). Some of these applications are paper applications that were received by the August 14 deadline, while others are valid electronic applications which were simply not published in the original Searchable Database and Mapping Tool Public Notice Filing round. These applications were officially posted to the Searchable Database and the BroadbandUSA Mapping Tool on October 20, 2009, and there-fore Public Notice Responses can be submitted for these particular infrastructure applications through the Mapping Tool until November 20, 2009. The list of the applications by organization can be found at

 http://www.broadbandusa.gov/new_pnf.htm

The corresponding Public Notice Filings and maps are viewable by going to the mappingtool.broadbandusa.gov and using the normal search functions. As with the initial round of Public Notice Filings, we are able to provide assistance drafting summary and comment language for your Public Notice Responses.

It should also be noted that, if an incumbent carrier was unable to submit timely comments on the first batch of applications (due Oct. 28), it is possible to submit late comments. NTIA has stated that “if an existing service provider submits a response outside the timeframe speci-fied in this NOFA, it will not be considered an existing service provider for determining whether the applicant’s service area is eligible, but will still be considered with respect to the agencies’ other applicable eligibility re-quirements.” The NOFA does not make clear what other eligibility requirements apply, but to the extent that NTIA and RUS are supposed to make an informed decision in awarding funds, late comments may be useful.  (Source:  BloostonLaw )

State utility regulators unveiled a new Web portal that will serve as an interactive compilation of State and federal programs dealing with broadband expansion and other advanced telecommunications services projects.

The Website—www.BroadbandBestPractices.org is being developed by the State members of the Federal-State Joint Conference on Advanced Services. It is being maintained by the National Regulatory Research Institute, an independent research agency specializing in utility and regulatory practices. The National Association of Regulatory Utility Commissioners provided the site a financial grant to help in its development. BroadbandBestPractices.org will provide a searchable reference guide to broadband expansion programs across the country. With nearly $7 billion in broadband funding opportunities available in the American Recovery and Reinvestment Act of 2009, the Website will be a tool for State and federal policymakers, consumer advocates, industry officials, and the general public seeking to learn about different broadband pro-grams and related information. Users will be able to re-search different projects and add information about their own in a collaborative fashion. (Source:  BloostonLaw )

Allies Send Letter to NTIA, RUS with Suggestions to Improve Broadband Stimulus Application Process

OPASTCO, the United States Telecom Association (USTelecom), the National Cable and Telecommunications Association (NCTA), the American Cable Association (ACA), the Independent Telephone and Telecommunications Alliance (ITTA) and the Western Telecommunications Alliance (WTA) sent a letter on Oct. 19 to the National Telecommunications and Information Administration (NTIA) and the USDA Rural Utilities Service (RUS) discussing the review process for broadband stimulus funding applications.
     "Our member companies share and support the goal of achieving universal broadband availability while maintaining the highest level of integrity in the agency broadband initiatives established to achieve that goal," the associations wrote.  "Unfortunately, the application information made available by the agencies about pending applications for areas listed as 'unserved' and 'underserved' makes it difficult, and in some cases impossible, for our members to examine and respond fully and completely to those applications within the 30-day deadline."
     The associations provided its suggestions for how NTIA and RUS could improve this process for companies seeking to use the broadband mapping tool to check that applications submitted from their service areas are accurate (411, Oct. 14).  These include:

Providing a dataset of census block, group or tract information with application numbers to simplify and speed the response process.

Lift the database's current Census Block limit of 7,500.

The database currently does not link applications to all states covered by proposed funded service areas.  This should be corrected to permit complete responses from existing service providers.

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Websites/Articles Relating to Broadband Stimulus

Much is being published regarding the broadband-related funding portion of the American Recovery and Reinvestment Act.  A good source of timely articles and information can be found at Benton Foundation Website http://www.benton.org/node/20455; http://broadbandusa.sc.egov.usda.gov/