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Home / Blog

Blog Washington Watch 04/18/2014

Washington Watch 04/18/2014

April 23, 2014 By Lifeline Landing Washington Watch
April 18, 2014

Back Issues
Contents USF/ICC Transformation Order NARUC Discusses Petition for Freeze of Current Local Service Rate Floor Arctic Slope Telephone Urges Freeze of Local Service Rate Floor ATA Urges Freeze of Local Service Rate Floor, Re-examination of Policy Copper Valley Telephone Opposes Proposed Rate Floor Increase NTCA Discusses Reforms to USF High Cost Rules Price Cap LECs, USTelecom Discuss Potential Changes to CAF Phase II Broadband Speeds ITTA, TDS Express Concern With Proposed Changes to CAF Phase II Broadband Speeds CenturyLink Discusses Pending FNPRM on USF High Cost Support Charter Communications Discusses CAF Phase II Open Meeting Agenda Item Frontier Discusses Potential Changes to CAF Phase II Funding CTIA Discusses Proposed High-Cost USF Implementation Order NCTA Discusses Support for Partially Served Census Blocks Wireline Competition Bureau Announces Availability of CAF Phase II Cost Model ATA Urges FCC Not to Use Cost Model for Alaska High Cost Support GCI Discusses Proposal for Alaska Mobility Fund Copper Valley et al. Discuss Proposed CETC Support for Remote Alaska IP Transition Final Agenda for Technology Transitions and Public Safety Workshop Announced Granite Telecommunications Supports Confidentiality Challenge to AT&T IP Trials Separations Comments Filed on FNPRM Seeking to Extend the Separations Freeze Universal Service AT&T Discusses Reform of ETC Rules FCC Announces Final Lifeline Biennial Audit Plan is Effective April 18 FCC Webinar State and Local Government Webinar Scheduled for April 22

USF/ICC Transformation Order

NARUC Discusses Petition for Freeze of Current Local Service Rate Floor NARUC members spoke by telephone with Carol Mattey, Deputy Chief of the Wireline Competition Bureau, on April 16, 2014, and discussed the NARUC Petition for a freeze of the current $14 local service rate floor, release of the inputs and detailed methodology that resulted in the new $20.46 rate floor, and for the Commission to seek comment on how the benchmark should be calculated. Several Commissioners also expressed strong support for elimination of the QRA, and they discussed closer collaboration on pending ETC designations involving carriers seeking state designations that are under investigation by the FCC for non-compliance with the FCC’s rules.   Arctic Slope Telephone Urges Freeze of Local Service Rate Floor Arctic Slope Telephone Association Cooperative filed ex parte comments on April 17, 2014, on the proposed local service rate floor hike to $20.46 for rural America. ASTAC said for companies charging the current floor of $14, this represents a 46 percent increase to the consumer. ASTAC said comparable rates are not the same as exactly the same rates and a broad brush policy that ignores the totality of disparity between urban and rural America and instead focuses on one aspect of disparity is poorly conceived. It said the FCC should freeze the rate floor at $14.00 indefinitely and reexamine this and other policies that further disadvantage rural Americans.   ATA Urges Freeze of Local Service Rate Floor, Re-examination of Policy The Alaska Telephone Association filed ex parte comments on April 16, 2014, on the proposed local service rate floor hike to $20.46 for rural America. It said for customers paying the current floor of $14, this represents a 46 percent increase, and this means rural consumers will pay more while there is no savings to the High Cost Fund. It said one of the core principles of Section 254 of the Act is that telephone service should be more affordable, not less, and the law calls for comparable rates between rural and urban folks, not identical. The ATA requested the FCC freeze the rate floor for rural areas at $14 indefinitely and re-examine a policy that further disadvantages rural Americans.   Copper Valley Telephone Opposes Proposed Rate Floor Increase Copper Valley Telephone Cooperative filed ex parte comments on April 16, 2014, opposing the Commission’s proposed local service rate floor increase for rural America, which would result in a 46 percent increase to the current $14.00 floor.  CVT questioned the Commission’s claim that the increase is mandated by law since the law calls for comparable rates between rural and urban areas, not identical, and Section 254 of the Communications Act states that telephone service should be more affordable, not less.  CVT urged the Commission to freeze the rate floor at $14.00 indefinitely, and re-examine this and other policies.   NTCA Discusses Reforms to USF High Cost Rules   NTCA met with Chairman Wheeler’s Legal Advisor on April 15, 2014, to encourage the Commission to implement as soon as possible updates to the existing USF high-cost rules for areas served by RLECs. NTCA urged the Commission to proceed with substantial caution with respect to any policies that might be based upon or affected by the purported presence of an unsubsidized competitor. NTCA also encouraged the Commission to ensure that, regardless of the type of consumer to be served, any request for service from a consumer would be deemed reasonable for purposes of giving rise to any performance obligation on the part of a carrier only to the extent that the carrier determines that predictable and sufficient cost recovery can be obtained with respect to that location.   Price Cap LECs, USTelecom Discuss Potential Changes to CAF Phase II Broadband Speeds   Frontier, Windstream, Verizon, AT&T, CenturyLink, Hawaiian, FairPoint and USTelecom met with Chairman Wheeler’s Legal Advisor and Wireline Competition Bureau staff on April 14-15, 2014, to discuss the FNPRM on USF high-cost issues scheduled to be considered at the Commission’s April 23 Open Meeting. They expressed concern that the Commission may propose an increase in the broadband speed requirement for CAF Phase II without proposing sufficient balancing changes in other program terms to ensure that the program functions effectively to bring and maintain modern broadband services and networks to high cost areas where other options do not exist. They discussed several options, including extending the term of support, providing options for building to unserved locations in addition to those identified by the cost model, and adjustments to the challenge process.   ITTA, TDS Express Concern With Proposed Changes to CAF Phase II Broadband Speeds   ITTA and TDS met with the Legal Advisors to Chairman Wheeler and Commissioners Rosenworcel, O’Rielly, Pai and Clyburn on April 14 and 15, 2014, to express concern regarding any proposal in the FNPRM on CAF issues to be considered at the Commission’s April 23 Open Meeting to increase speed obligations for recipients of CAF support without any change in the funding parameters of the CAF program. They said the Commission should not do so without modifying other critical parameters of the CAF program, and discussed increasing the term of support to 10 years, modifying the eligibility criteria so that areas are considered unserved based on lack of broadband at 10 Mbps, allowing partially-served census blocks are eligible for funding, and relaxing the requirement to build out to 100 percent of locations. ITTA also expressed concern about the schedule for phasing in the local service rate floor, and said if the Commission declines to freeze the local rate floor at its current amount of $14, it should provide for a more gradual increase of the local rate floor through a $2.00 cap to be implemented annually beginning on January 2, 2015.   CenturyLink Discusses Pending FNPRM on USF High Cost Support CenturyLink met with Commissioner Rosenworcel’s Legal Advisor on April 16, 2014, to discuss the FNPRM on USF high-cost issues scheduled to be considered at the Commission’s April 23 Open Meeting. CenturyLink cautioned against a potential increase in the broadband speed requirement without concurrent changes in other terms for CAF Phase II support, and discussed the need for consistency in the obligations of CAF II recipients and the definition of an unsubsidized broadband competitor that serves to preclude CAF II support in a high-cost area.  It also discussed an attached document, which CenturyLink claims explains how the distribution of potentially funded locations changed substantially between CAM 3.2 and CAM 4.0, with more sparsely populated locations that had been reserved for the Remote Areas Fund replacing somewhat more populated high-cost areas in the universe of potentially-eligible CAF II locations. CenturyLink proposed modifications for the FCC to consider.   Charter Communications Discusses CAF Phase II Open Meeting Agenda Item Charter Communications spoke with Legal Advisors to Commissioners O’Rielly and Pai on April 16, 2014, to discuss issues raised by CenturyLink in connection with the Connect America Fund Phase II agenda item to be discussed at the Commission’s April 23 Open Meeting. Charter opposes CenturyLink’s proposal to make partially served census blocks eligible for CAF II funding, saying the additional evidentiary burdens on both unsubsidized competitors and Commission staff of conducting a challenge process on a sub-block basis would be significant.  Charter argues the Commission has already rejected this concept in its May 2013 Report and Order, concluding that “[a]ny partially served census block will be treated as served.”   Frontier Discusses Potential Changes to CAF Phase II Funding Frontier met with Commissioner Clyburn and her Legal Advisor on April 14, 2014, to discuss potential changes to CAF Phase II. Frontier said if the Commission is considering increasing the CAF Phase II obligations, then it must also consider adjusting other terms of support, such as increasing the length of the funding term and adjusting the level of broadband necessary for an area to be considered served by an unsubsidized competitor to match the CAF Phase II service obligations. Frontier also spoke by phone with Chairman Wheeler on April 15, 2014, and met with Commissioner Pai and his Legal Advisor, Commissioner Rosenworcel and her Legal Advisor, and Commissioner O’Rielly and his Legal Advisor to discuss the same issues.   CTIA Discusses Proposed High-Cost USF Implementation Order CTIA spoke by phone with Chairman Wheeler’s Legal Advisor on April 16, 2014, to discuss the upcoming Report and Order and Further Notice on high cost USF implementation the Commission will consider at its April 23, 2014 Open Meeting. CTIA reiterated the importance of USF programs that focus on consumers and the services they demand, namely mobility and broadband, and said with consumers rapidly migrating to mobile broadband, maintaining a sufficient mobility fund that ensures Americans have access to those services is consistent with the goals of Congress, the National Broadband Plan, and the Commission.   NCTA Discusses Support for Partially Served Census Blocks NCTA spoke with Legal Advisors to Chairman Wheeler and Commissioners O’Rielly and Pai on April 16, 2014, to express concerns with a proposal to allow price cap ILECs to receive CAF support to serve locations in census blocks that are partially served by unsubsidized providers.  It said the Commission already has determined that the public interest would not be served by providing CAF support to price cap LECs in these areas, and given the lack of data, allowing price cap LECs to seek funding for locations in census blocks served by unsubsidized providers would open up an incredibly burdensome and complex challenge process. NCTA argued not only does the burden of such a process outweigh any potential benefits, it also makes it more likely that CAF support would be wastefully provided to price cap LECs in areas where broadband service is available from unsubsidized providers.   Wireline Competition Bureau Announces Availability of CAF Phase II Cost Model The Wireline Competition Bureau issued a Public Notice on April 17, 2014, announcing the availability of Version 4.1.1 of the Connect America Fund Phase II Cost Model and a new solution set and updated model documentation. CAM v4.1.1 incorporates minor corrections to the model’s broadband coverage in addition to a number of technical changes. It said these minor adjustments do not have a material effect on the Bureau’s previously issued funding levels.   ATA Urges FCC Not to Use Cost Model for Alaska High Cost Support The Alaska Telephone Association filed a letter on April 16, 2014, urging the Bureau to recognize that its CAM version 4.1 substantially understates the costs of delivering the required voice and broadband services in Alaska. It said the middle mile cost estimates produced for Alaska are unreasonably low and other elements of the CAM, including the cost of deploying the necessary local plant, fail to reflect reality. The ATA urges the Bureau not to use the CAM version 4.1, as currently constructed, for determining CAF Phase II support amounts for deployment obligations for any carrier in Alaska.   GCI Discusses Proposal for Alaska Mobility Fund GCI met with Legal Advisors to Commissioners O’Rielly, Clyburn and Pai, and Wireline Competition Bureau and Wireless Telecommunications Bureau staff on April 14, 2014, and with Philip Verveer, Senior Counsel to the Chairman, on April 15, 2014, to discuss GCI’s proposal for a revised transition of CETC support to a successor Mobility Fund focused on remote Alaska. GCI noted it had previously outlined the basic idea of setting aside a specific amount of support for Remote Alaska, and requested that its proposal be included among the aspects of the Mobility Fund on which the Commission will seek comment.   Copper Valley et al. Discuss Proposed CETC Support for Remote Alaska Copper Valley Telephone, OTZ Telephone, and the Alaska Rural Coalition spoke with Commissioner Pai’s Legal Advisor on April 16, 2014, to discuss the proposed freeze in CETC support for Remote Alaska.  They also discussed the proposed increase in the local service floor rate, saying the ARC strongly believes that the local rate floor should be frozen at the existing $14.00 rate, as the Commission’s proposed increase places an unacceptable burden on those who can least afford it.

IP Transition

Final Agenda for Technology Transitions and Public Safety Workshop Announced The FCC issued a Public Notice on April 16, 2014, providing a final agenda and session participant information for the workshop on Public Safety Imperatives for All-IP Networks scheduled for April 17 and 18. The workshop will explore the impact of the technology transition on public safety, emergency response, and national security functions. It will also include an overview of the FCC’s Technology Transition Order; communications requirements for public safety incident response and the challenges disasters and emergencies bring to an all-IP based infrastructure; cyber risks to commercial, public and governmental networks during and after the transition; and the impact of the transition on national security and federal government systems.   Granite Telecommunications Supports Confidentiality Challenge to AT&T IP Trials Granite Telecommunications filed comments on April 17, 2014, in support of Public Knowledge and the National Consumer Law Center’s Confidentiality Challenge to the portions of AT&T’S proposed IP transition trials that AT&T designated as highly confidential. Granite said AT&T’s trial proposal is incomplete and will frustrate the open public policy debate intended by the Commission because AT&T seeks to withhold from public scrutiny basic information as to the timeline governing the trials. Granite said this is inconsistent with the market opening measures of the Act and the Technology Transitions Order, which requires that effective wholesale access be maintained during the trials.  It asked the Commission to require AT&T to provide the missing timeline information to the public.

Separations

Comments Filed on FNPRM Seeking to Extend the Separations Freeze In addition to comments listed in a previous edition of Washington Watch, comments were filed on April 16, 2014, on the FCC’s FNPRM proposing to extend, until June 30, 2017, the current freeze of Part 36 category relationships and jurisdictional cost allocation factors and open a window for rate-of-return ILECs to file petitions to unfreeze their cost category relationships. USTelecom said the Commission should extend the separations freeze for no less than the three years, but preferably for the indefinite future. USTelecom said it would be a tremendous misallocation of resources to revisit the separations rules just for the sake of making interim changes to a system that is arbitrary by nature and inapplicable to the providers that serve the vast majority of all access lines when the Commission’s attention should be focused on properly implementing the reforms that obviate the need for separations. NASUCA said that extending the freeze, without actual action to solve the underlying separations issues, is not in the public interest. It said the one part of the IP transition the FCC seems to have overlooked is the joint and common cost basis of the various services being offered over these new transitioned networks, and the current separations factors ignore the increasing variety of services offered over these interwoven, interconnected and interdependent networks. CenturyLink expressed support for the freeze, and said the Commission’s Part 36 rules are unnecessarily complex and the freeze holds in place the rules that were in effect prior to July 1, 2001. It said as competition continues to increase in telecommunications markets and more services are appropriately deregulated, jurisdictional separations should ultimately become wholly unnecessary.  FR   Other Comments filed by: Pioneer Telephone Small Company Coalition   List of all comments filed

Universal Service

AT&T Discusses Reform of ETC Rules AT&T met with Wireline Competition Bureau staff on April 11, 2014, to discuss reform of the FCC’s ETC rules. AT&T said ETC rules that applied in the legacy USF environment must be transformed at the same time that CAF II is implemented. It suggested, among other things, ETC designations and obligations must be limited only to areas eligible for support and to those providers who willingly accept and receive that support. AT&T noted the Commission already has a full record on these issues, and it urged the Commission to act on these issues as soon as possible.   FCC Announces Final Lifeline Biennial Audit Plan is Effective April 18 The FCC published a Notice in the Federal Register on April 18, 2014, announcing its Final Lifeline Biennial Audit Plan is effective April 18, 2014. Under the plan, ETCs receiving $5 million or more from the low-income program, as determined on a holding company basis taking into account all operating companies and affiliates, for calendar year 2013, will be subject to the first round of biennial audits. Changes were also made to the plan, including the audit period, submission of attestation reports, confidentiality of ETCs’ information, and subscriber data for testing.

FCC Webinar

State and Local Government Webinar Scheduled for April 22 The FCC announced its Office of Intergovernmental Affairs will be hosting its next Webinar for State and Local Governments on April 22, 2014. The agenda includes modernizing the E-rate program, an IP transition update, the Open Internet rules, wireless infrastructure issues, the FCC broadband speed test app, Next Generation 911, and closed captioning.  

Editor: Teresa Evert  |  Assistant Editor: Shawn O'Brien

 

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