FCC & Congress

Rural Broadband & Rate-of-Return Carriers

Wireless & Privacy & Cybersecurity

2017

U.S Attributes WannaCry Ransomware Attack To North Korea

December 19, 2017 – The U.S. government has attributed the WannaCry ransomware cyber attacks to North Korea. The assertion was officially made by White House homeland security adviser Tom Bossert, and was based on a claim that the U.S. government has clear evidence linking the attacks to the regime in Pyongyang. The WannaCry ransomware cryptoworm attacks, launched in May of 2017, infected hundreds of thousands of computers and networks in hospitals, banks, businesses, schools, and homes in over 150 countries worldwide. WannaCry ransomware locked users out of their data and computers, forcing many to pay a ransom in Bitcoin to bring their systems back online. WannaCry exploited a Microsoft Windows flaw that was first discovered by the U.S. National Security Agency. However, following an NSA security breach, the exploit was leaked online by the Shadow Brokers, a secretive hacker group, and ultimately used to launch the WannaCry attacks.

FCC Releases Final List of Census Blocks Eligible For CAF II Auction

December 19, 2017 – The FCC’s Wireline Competition Bureau has released the final list of census blocks eligible for the Connect America Fund Phase II auction (Auction 903). In general, the census blocks eligible for the auction include those in price cap study areas where the price cap carriers declined the statewide offers of model-based support. However, also included are certain census blocks in price cap study areas where price cap carriers accepted statewide offers of model-based support that were identified as areas that will not be served. The final list of eligible census blocks is based on FCC Form 477 data as of December 31, 2016.

The Bureau has also released a list of census block groups and associated reserve prices. The FCC has proposed using census block groups containing one or more eligible census blocks as the minimum geographic area for bidding in the CAF Phase II auction. The Bureau’s list identifies the census block groups eligible for bidding in the auction under the proposal. For each group, the list shows the census block group identification number (a 12-digit FIPS code), the state, the county name, the number of locations that are eligible for CAF Phase II support, and the reserve price rounded to the nearest dollar. The reserve price is the sum of the support amounts calculated for all locations within each eligible census block in the census block group, subject to the cap on extremely high-cost locations.

Additionally, the Bureau has released a map showing the eligible blocks within the census block groups. In general, the final list of eligible census blocks does not include census blocks where price cap carriers accepted statewide offers of support; census blocks where any provider provides service with voice and broadband at speeds of 10/1 Mbps or higher; and census blocks located in rate-of-return areas.

600 MHz License Applications Accepted

December 19, 2017 – The Federal Communications Commission has announced that 600 MHz license long-form applications filed by Iowa RSA 2 Limited Partnership and NewLevel, LLC have been accepted for review. A list of the long-form applications that have been accepted is available by licensee, as is a list organized by market area. The FCC may return or dismiss any application if it is found, upon further examination, to be defective or not in conformance with the FCC’s rules. Petitions to deny the applications must be filed no later than December 29, 2017, ten days after the date of the FCC’s Public Notice. Oppositions to a petition to deny must be filed no later than January 8, 2018, five business days after the filing date for petitions to deny. Replies to oppositions must be filed no later than January 16, 2018, five business days after the filing date for oppositions. The FCC’s review of applications of other winning bidders remains ongoing.

UnityComm Receives $100K Penalty For Failing to Report Revenues to USAC

December 19, 2017 – The FCC’s Enforcement Bureau has imposed a penalty of $100,000 against UnityComm, LLC for failing to timely file Telecommunications Reporting Worksheets with the Universal Service Administrative Company (USAC). UnityComm, an Indiana LLC, provides local reseller, toll reseller, interconnected VoIP, and interexchange carrier services in Indiana, Kentucky, Missouri, North Carolina, Ohio, Tennessee, and Texas. UnityComm, like other telecommunications carriers, is required to report revenue by filing Telecommunications Reporting Worksheets quarterly (FCC Form 499-Q) and annually (FCC Form 499-A) with USAC. The reported revenue information is used to calculate contributions to the universal service fund, interstate telecommunications relay services, the administration of the North American Numbering Plan, and the shared costs of local number portability administration. Following an investigation, the FCC’s Enforcement Bureau determined UnityComm failed to file two Quarterly Worksheets, which allowed it to avoid contributing to the telecommunications support programs mentioned above. Consequently, the Bureau imposed a forfeiture of $50,000 for each failure to timely file a Quarterly Worksheet.

Colorado and Illinois Choose FirstNet

December 18, 2017 – The Governors of Colorado and Illinois have announced that their states have opted in to the FirstNet public-safety broadband network. Under the FirstNet deployment plan, AT&T will construct a radio access network (RAN) within each state. If either state had decided to opt out of FirstNet, it would have been required to construct and maintain its own RAN that is interoperable with FirstNet. The decisions by Colorado and Illinois bring the total number of states that have opted in to FirstNet to 38. Two U.S. territories have also picked FirstNet. States and territories must make their opt-in or opt-out decisions by December 28, 2017. The U.S. territories of Guam, American Samoa, and the Northern Mariana Island have until March 12, 2017 to make a decision.

FCC Closes Wireline Bureau Post Office Box, Moves Toward E-Filing

December 18, 2017 – The FCC has closed the Post Office Box used for manual filings with the Wireline Competition Bureau (P.O. Box 979091, St. Louis, MO 63197-9000). Accordingly, the FCC has amended Section 1.1105 of its rules to reflect the closure, require the use of an electronic payment system and, wherever possible, require electronic filing. Additionally, the FCC has revised Sections 0.401, 1.49, 1.51, 1.52, 1.742, 1.1105, 1.1111-1.1113, 1.1119, 51.329(c)(2), 61.13, 61.14, 61.17(d), and 61.20(b) of its rules to account for electronic filing of fees, tariffs, petitions, and applications with the Wireline Competition Bureau. The changes have been made without notice and comment because rules of agency organization, procedure, or practice are exempt from the general notice-and-comment requirements of the Administrative Procedure Act. Following publication of the FCC’s order in the Federal Register, payments and paper filings to P.O. Box 979091 will continue to be processed during a 90 day transition period. At the end of the transition period, payments for Wireline Competition Bureau-related fees or services must be made in accordance with the procedures set forth at https://www.fcc.gov/licensing-databases/fees.

New Record: USF Contribution Factor Set at 19.5 Percent For Q1 2018

December 14, 2017 – The FCC’s Office of Managing Director (OMD) has announced that the proposed universal service fund (USF) contribution factor for the first quarter of 2018 will be 19.5 percent. This is a new record high, breaking the previous all-time high of 18.8 percent set in the fourth quarter of 2017. OMD also announced that for the first quarter of 2018, the Universal Service Administrative Company (USAC) projects that it will collect $12.87 billion in total interstate and international end-user telecommunications revenues. USAC estimates that $2.081 billion will be needed to cover the total demand and expenses for all Federal universal service support mechanisms in the first quarter of 2018. If the FCC takes no action on the proposed USF contribution factor within 14 days, it will be declared approved. Historical information on quarterly universal service fund contribution factors is available online from the FCC.

Disney to Buy 21st Century Fox Film and Television Businesses

December 14, 2017 – The Walt Disney Company has announced a deal to purchase most of 21st Century Fox’s film and television businesses for roughly $52 billion. The deal will allow Disney, the media powerhouse that already owns ESPN and ABC, to expand its content portfolio to include 21st Century Fox’s movies (X-Men), hit television shows (The Simpsons and Modern Family), and television networks (YES Network and Fox Sports Regional Networks), and it will give Disney a controlling interest in streaming service Hulu. However, Fox News, Fox Broadcast Network, and FS1-Fox Sports One cable channel are not included in the deal. The transaction is subject to regulatory approval by the U.S. Department of Justice.

FCC and FTC Agree to Memorandum of Understanding to Monitor Net Neutrality

December 11, 2017 – The Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) have entered into a Memorandum of Understanding (MOU) to outline their respective “their joint and common goals, obligations, and responsibilities” with respect to net neutrality following the adoption of the FCC’s Restoring Internet Freedom Order that will repeal the FCC’s existing net neutrality regulations. According to the MOU, the FCC will monitor the broadband Internet access market and will investigate and take appropriate enforcement action when it determines an Internet service provider (ISP) has failed to comply with the Internet Freedom Order’s transparency requirements. The FTC will investigate and take appropriate enforcement  action against ISPs for unfair, deceptive, or otherwise unlawful acts or practices in connection with their broadband services. The MOU further explains that the two agencies will regularly meet and correspond with each other regarding investigations of potential net neutrality violations. The MOU will take effect upon the effective date of the FCC’s Internet Freedom Order.

FCC Orders Blanca Telephone to Repay $6 Million in USF Support

December 8, 2017 – The Federal Communications Commission has ordered Blanca Telephone Company to return $6,748,280 in high-cost universal service fund support it improperly received from 2005 to 2010. Blanca is a rate-of-return incumbent local exchange carrier that provides service to predominately rural areas in south central Colorado. As explained in the FCC’s order, Blanca received an inflated amount of USF support over the five year period because it included costs of nonregulated service in its regulated cost for its incumbent rate-of-return study area. In 2012, the National Exchange Carriers Association discovered Blanca incorrectly included costs related to commercial mobile radio service (CMRS), a non-regulated service, in its rate base and directed Blanca to correct the error for its 2011 cost accounting and all subsequent years. An investigation into the matter by the FCC’s Office of Inspector General and the Universal Service Administrative Company determined that Blanca had “misallocated costs between its CMRS and its wireline service.” In June 2016, the FCC informed Blanca that it had violated the FCC’s rules and demanded immediate repayment of USF support it had improperly received. Blanca challenged the FCC’s determination, citing numerous legal and policy arguments, all of which were rejected. Consequently, the FCC has directed its Office of Managing Director to pursue collection of the overpayment from Blanca, whether by offset, recoupment, referral of the debt to the U.S. Department of Treasury or by any other means authorized by law.

New Hampshire Will Opt Out of FirstNet

December 7, 2017 – New Hampshire has announced that it will opt out of AT&T’s FirstNet plan, and will instead work with Rivada Networks, LLC to build high-speed wireless broadband network for New Hampshire first responders. New Hampshire’s Governor Chris Sununu explained that the decision was based on a determination from New Hampshire’s Statewide Interoperability Executive Committee that, from a technical standpoint, an opt-out of FirstNet is far and away the state’s best option. U.S. states and territories have until December 28, 2017 to decide whether to opt-in to FirstNet or initiate the process to take on the responsibility for deploying its own network that is interoperable with the FirstNet network.

NIST Releases Draft Update to Cybersecurity Framework

December 5, 2017 – The National Institute of Standards and Technology (NIST) has publicly released the second draft of the proposed update to the Framework for Improving Critical Infrastructure Cybersecurity (referred to as draft 2 of Cybersecurity Framework version 1.1). Similar to the original Cybersecurity Framework issued in February 2014, the draft update is intended to “provide a flexible, voluntary, and effective tool to help organizations better manage their cybersecurity risks,” but with updates that make it easier to use. The new draft reflects comments NIST received in response to its December 2015 request for information on improving the Framework, as well as comments from a public review process launched in January 2017 and a workshop in May 2017. Additionally, NIST has released a draft Roadmap that describes plans for advancing the Framework development process, discusses NIST’s next steps with the Framework, and identifies key areas of development, alignment, and collaboration. Public comments on draft 2 of Cybersecurity Framework version 1.1 and the draft Roadmap are due to NIST on January 19, 2018 via email to cyberframework@nist.gov. NIST anticipates finalizing the Cybersecurity Framework version 1.1 in the Spring of 2018.

Copyright Office Proposes New Definition of Cable System

December 1, 2017 – The U.S. Copyright Office is seeking comment on proposed revisions to rules governing the royalty reporting practices of cable operators under Section 111 of the Copyright Act. By issuing the Notice of Proposed Rulemaking, the Copyright Office intends to resolve issues raised in a 2006 Notice of Inquiry (NOI) on cable reporting practices, as well as address other Section 111 issues raised in response to the NOI. Section 111 of the Copyright Act provides cable operators with a statutory license to retransmit a performance or display of a work embodied in a “primary transmission” made by a television station licensed by the Federal Communications Commission. Among other things, the Copyright Office proposes to amend the regulatory definition of “cable system” to reflect both the Copyright Office’s longstanding position that such systems are limited to systems providing only localized retransmissions of limited availability, and the uniform case law holding that Internet based retransmission services are excluded from the Section 111 compulsory license. Comments are due January 16, 2018, and must be submitted electronically through regulations.gov. Further instructions are available online at https://copyright.gov/rulemaking/section111.

National Lifeline Verifier Delays Launch

December 1, 2017 – The FCC has announced that the launch of the National Lifeline Eligibility Verifier has been postponed until early 2018, reportedly due to “ongoing work by the Universal Service Administrative Company (USAC) to ensure Federal Information Security Management Act (FISMA) compliance.” The National Verifier was originally scheduled to have a soft launch date of December 5, 2017, in six states – Colorado, Mississippi, Montana, New Mexico, Utah, and Wyoming. When the National Verifier is ultimately deployed, the obligation of determining whether an individual is eligible for Lifeline benefits – for initial certification and annual recertification – will shift from Lifeline service providers to the National Verifier. Additional information on the National Verifier is available on USAC’s website.

Comments on FCC Plan to Downsize Lifeline Program Due January 24, 2018

December 1, 2017 – The FCC has released the Notice of Proposed Rulemaking for the Lifeline program that it adopted at its November 2017 open meeting. While the FCC frames the proposals in the NPRM as measures intended to ensure the Lifeline program is on sound legal footing and further curb fraud, waste, and abuse, most of the proposed changes, if adopted, would fundamentally alter the program. For example, the FCC proposes to discontinue Lifeline support for service provided over non-facilities-based networks; adopt a self-enforcing budget mechanism to cap annual Lifeline disbursements in a given year; and prohibit agent commissions related to enrolling subscribers in the Lifeline program. Comments are due on or before January 24, 2018, and reply comments are due February 23, 2018.

Nationwide Number Porting Comments Due December 27th

November 29, 2017 – In October, the Federal Communications Commission issued a Notice of Proposed Rulemaking and Notice of Inquiry covering issues related to nationwide number portability, including “how best to move toward complete nationwide number portability to promote competition among all service providers, regardless of size or type of service.” A summary of the NPRM and NOI has been published in the Federal Register, setting the following comment deadlines: Comments are due on or before December 27, 2017, and reply comments are due January 26, 2018.

NTIA Provides Guidance to States on FirstNet Opt-Out Process

November 28, 2017 – NTIA has released a State Alternative Plan Program (SAPP) Notice of Funding Opportunity (NOFO) to provide states with guidance on the FirstNet opt-out application process. The SAPP NOFO explains that if a state wants to assume responsibility for the construction, operation, maintenance, and improvement of its Radio Access Network (RAN) to interoperate with FirstNet, and the state has received approval of its alternative plan from the FCC, the state must apply to NTIA for the authority to enter into a spectrum manager lease from FirstNet. The SAPP NOFO further explains what a state must do to show it is prepared to provide Public Safety with interoperable and reliable service consistent with the rest of FirstNet, including ongoing interoperability, financial stability, technical ability, and comparable security, coverage, and quality of service. To date, 35 U.S. states and territories have elected to opt-in to FirstNet. Remaining states have until December 28, 2017 to decide whether to opt-in to FirstNet or initiate the process to take on the responsibility for deploying its own RAN that is interoperable with the FirstNet network.

Comments on Proposed Changes to CBRS Licenses Due December 28

November 28, 2017 – A summary of the FCC’s NRPM proposing changes to the rules governing Priority Access Licenses that will be issued in the 3.5 GHz Band, also referred to as the Citizens Broadband Radio Service band, has been published in the Federal Register. As a result, comments are due on or before December 28, 2017, and reply comments on or before January 29, 2018.

FCC Releases Tentative Agenda For December Meeting

November 22, 2017 – FCC Chairman Ajit Pai has released a tentative agenda for the FCC’s December 14, 2017 open meeting that includes the following items:

Net Neutrality – The FCC will consider a Declaratory Ruling, Report and Order, and Order that will restore Internet Freedom by returning broadband Internet access service to its prior classification as an information service, and reinstate the private mobile service classification of mobile broadband Internet access service.  The item also will eliminate the FCC’s Internet Conduct Standard, along with the bright-line rules.  Additionally, it will modify the transparency rule to promote additional transparency, while eliminating burdensome and unnecessary requirements.  (WC Docket No. 17-108)

New Emergency Alert System Event Code for Blue Alerts – The FCC will consider a Report and Order that would amend the FCC’s Emergency Alert System (EAS) rules to add a dedicated event code to facilitate the delivery of Blue Alerts over the EAS and Wireless Emergency Alert system.  Blue Alerts can deliver actionable information to the public when a law enforcement officer is killed, seriously injured, missing in connection with his or her official duties, or if there is an imminent and credible threat to a law enforcement officer.  (PS Docket No. 15-94)   

Rural Health Care Support Mechanism – The FCC will consider a Notice of Proposed Rulemaking and Order to strengthen the Rural Health Care Program and improve access to telehealth in rural America.  (WC Docket No. 17-310)

Twilight Towers Public Notice – The FCC will consider a Public Notice seeking input on a draft Program Comment addressing the historic preservation review requirements for collocating wireless communications facilities on certain communications towers.  (WT Docket No. 17-79)

CMRS Presumption Report & Order – The FCC will consider a Report and Order to harmonize the FCC’s rules by eliminating the commercial mobile radio service (CMRS) presumption, to be consistent with our flexible use approach to licensing. (WT Docket No. 16-240)

Electronic Delivery of Cable Communications – The FCC will consider a Notice of Proposed Rulemaking seeking comment on ways to modernize certain notice provisions in Part 76 of the FCC’s Rules governing multichannel video and cable television service. (MB Docket Nos. 17-317, 17-105)

National Television Multiple Ownership Rule – The FCC will consider a Notice of Proposed Rulemaking seeking comment on whether to modify, retain or eliminate the 39 percent national audience reach cap and/or the UHF discount used by broadcast television station groups to calculate compliance with the cap.  (MB Docket No. 17-318)

The FCC’s December 14th open meeting is scheduled to commence at 10:30 a.m. EDT at the FCC’s headquarters in Washington, D.C.  It is open to the public, but guests must check in with and be screened by FCC security before entering. The meeting will be streamed live at www.fcc.gov/live and can be followed on social media using the hashtag #OpenMtgFCC.

FCC Releases Broadband Deployment Data

November 16, 2017 – The FCC’s Wireline Competition Bureau has released updated Form 477 data on fixed broadband deployment as of December 31, 2016, which includes revisions made before November 7, 2017. The data shows census blocks where providers report offering fixed broadband, as well as the technology used and the maximum advertised download and upload speeds. It is publicly available on the FCC’s fixed broadband deployment data webpage. Coverage area shapefiles showing mobile voice and broadband deployment as of December 31, 2016 are also available.

FCC Announces Findings of 2018 Urban Rate Survey

November 8, 2017 – The FCC’s Wireline Competition Bureau has released the results of the 2018 urban rate survey. The Bureau’s Public Notice announces the 2018 reasonable comparability benchmarks for fixed voice and broadband services for incumbent eligible telecommunications carriers (ETCs) and the required minimum usage allowance for ETCs subject to fixed broadband public interest obligations. Data on fixed voice and broadband services collected in the urban rate survey, along with explanatory notes, are available online.

The 2018 urban average monthly rate (the rate floor) is $25.50, which puts the reasonable comparability benchmark for voice services at $45.38. The reasonable comparability benchmark for broadband services varies based on a service’s download and upload speeds and monthly usage allowance. For instance, the 2018 benchmark for a broadband service that provides speeds of 10 Mbps downstream and 1 Mbps upstream with a monthly usage allowance of 170 GB is $87.68. The 2018 benchmark for a broadband service that provides speeds of 10 Mbps downstream and 1 Mbps upstream with an unlimited monthly usage allowance is $88.13. Benchmarks for other broadband service tiers are set out in the Public Notice. Broadband providers can access an online tool that calculates the benchmark for specific service characteristics.

To determine the required minimum usage allowance for ETCs subject to fixed broadband public interest obligations, the Bureau used the Cisco Visual Networking Index (Cisco VNI) average Internet household usage in the U.S. The Cisco VNI is calculated using analyst projections, Cisco-generated estimates and forecasts, and direct data collection. In the past, the Bureau has used Measuring Broadband America (MBA) data, but switched to Cisco VNI because the MBA program is phasing out the collection of usage data. The Cisco VNI shows that the average Internet household generated 172.3 GB of Internet traffic per month in 2016. However, for administrative convenience, the Bureau has set the minimum monthly usage allowance at 170 GB for 2018.

FCC Reviewing Performance Measures For High-Cost Support Recipients

November 7, 2017 – The Federal Communications Commission’s Wireline Competition Bureau, Wireless Telecommunications Bureau, and Office of Engineering and Technology have jointly released a Public Notice requesting comment on the performance measures that apply to high-cost universal service fund support recipients. In 2011, the FCC required eligible telecommunications carriers that receive high-cost universal service fund support to offer broadband service in their supported areas that meets certain basic performance requirements. Initially, support recipients were generally required to “offer broadband at actual speeds of at least 4 Mbps downstream and 1 Mbps upstream, with latency suitable for real-time applications, such as VoIP, and with usage capacity reasonably comparable to that available in comparable offerings in urban areas.” The minimum speed standard was later increased to 10 Mbps down and 1 Mbps up, but some support recipients are obligated to provide higher speeds. The data usage allowance is calculated annually. The Bureaus’ Public Notice builds on a notice from three years ago that sought comment on how support recipients should be required to demonstrate compliance with the performance conditions. In general, the Bureaus are seeking comment on the following:

• Comment is sought on whether the same testing method options and parameters should apply to all high-cost support recipients that serve fixed locations.
• The Bureaus propose to require all high-cost support recipients subject to fixed broadband performance obligations to use testing parameters for speed similar to those adopted for latency for price cap carriers (95 percent or more of all peak period measurements of network round trip latency are at or below 100 milliseconds when measured during the peak period between the customer premises and the nearest designated Internet core peering interconnection point).
• Comment is sought on USTelecom’s proposed broadband speed and latency measurement reporting and compliance framework.
• Comment is sought on the use of software and equipment to conduct the testing: the use of software installed in CPE; equipment directly attached to CPE; and the use of Whiteboxes.

Comments are due on or before December 6, 2017, and may be filed using the FCC’s Electronic Comment Filing System (ECFS).

RUS Announces $207 Million For Rural Broadband Projects

November 6, 2017 – The U.S. Department of Agriculture’s Rural Utilities Service has announced it is awarding $207 million in loans and grants for broadband projects that will serve rural communities. The awards are being made through the USDA’s Rural Development Telecommunications Program which provides funding for the deployment of rural telecommunications infrastructure. Community Connect Grants are being made to companies in Minnesota, Oklahoma, Tennessee, Virginia, Washington, and West Virginia. Farm Bill Broadband Loans are being made to companies in Illinois, Iowa, Kansas, South Dakota, Tennessee, Utah, Virginia, and Wisconsin. Further details on each grant and loan are available online from USDA.

FCC Once Again Finds No Rate-of-Return Study Area Subject to 100% Competitive Overlap

November 2, 2017 – The FCC’s Wireline Competition Bureau has completed its biennial review of rate-of-return study areas that are potentially subject to 100 percent overlap by unsubsidized competitors. The Bureau initially published a list of 13 incumbent rate-of-return study areas potentially subject to the 100 percent competitive overlap rule. However, after reviewing comments and reply comments submitted by ILECs and competitive carriers, the Bureau was unable “to confirm that any of the 13 study areas preliminarily identified were in fact 100 percent served by unsubsidized broadband competitors.” The Bureau will conduct another 100 percent overlap process in 2019.

FCC Directs USAC To Save Excess Funds in High-Cost USF Account

November 1, 2017 – The FCC’s Wireline Competition Bureau has released a Public Notice that formally instructs the Universal Service Administrative Company (USAC) “to retain any excess cash in the high-cost account at the end of 2017, pending further Commission action, and not to take that amount into consideration when determining the contribution factor for the first quarter of 2018.” Absent such direction, Section 54.709(b) of the FCC’s rules requires excess funds to be carried forward to the next quarter and used in the calculation to determine that quarter’s universal service contribution factor. The Bureau’s instruction ensures USAC will continue to stockpile excess funding as it has done since the release of the USF/ICC Transformation Order when the FCC “directed USAC to forecast total high-cost universal service demand as no less than $1.125 billion per quarter for the years 2012 through 2017, regardless of the projected quarterly demand for the program, in order to avoid dramatic shifts in the contribution factor while the Connect America Fund was implemented.” According to the FCC’s Public Notice, “USAC currently projects that it will have approximately $129 million in excess of funds...in its high-cost cash account at the end of calendar year 2017.” Several decisions authorizing use of excess funds from the high-cost account have already been made by the FCC, including the net increase in support associated with A-CAM for 2018-2026; support for price cap carriers that elected Phase II model-based support in states where that support is less than their Phase I frozen support; rural broadband experiment support; and Mobility Fund Phase I and Tribal Mobility Fund support.

FCC Grants 600 MHz Licenses

November 1, 2017 – The Federal Communications Commission has granted spectrum licenses to eight entities that won the licenses during the 600 MHz Incentive Auction. After accepting and reviewing the entities’ long-form applications, the FCC determined that the applications for licenses were complete and in conformance with the FCC’s rules. None of the license applications were subject to a petition to deny or a similar challenge. A list of the newly-granted 600 MHz licenses sorted by licensee is available, as is a list sorted by market (Partial Economic Areas). The FCC’s initial review of long-form applications of other winning bidders is ongoing. 

Pai FCC To Consider Scaling Back Lifeline Program

October 26, 2017 – At its November open meeting, the Federal Communications Commission will consider a Notice of Proposed Rulemaking (NPRM) that proposes reforms to the universal service Lifeline program. As explained by the FCC, the purpose of the item is to take “a fresh look at the program to focus on how the program can more effectively and efficiently help close the digital divide by directing Lifeline funds to the areas where they are most needed.” The proposals in the NPRM also are intended to ensure the Lifeline program is on sound legal footing and further curb fraud, waste, and abuse.

First, the FCC proposes to eliminate its ability to make Lifeline Broadband Provider designations. In the NPRM, the FCC explains that it erred in preempting state commissions from their primary responsibility to designate eligible telecommunications carriers (ETCs) under section 214(e) of the Communications Act. Next, comment is sought on ways to ensure the FCC can partner with states to facilitate the successful implementation of the National Verifier that will make eligibility determinations and perform a variety of other functions necessary to enroll eligible subscribers in Lifeline.

In what is sure to be the most controversial section of the NPRM, the FCC seeks comment on a proposal to discontinue Lifeline support for service provided over non-facilities-based networks. If the proposal is ultimately adopted, Lifeline support would be limited to broadband service provided over facilities-based broadband networks that also support voice service. Lifeline providers that are partially facilities-based would be able to obtain designation as an ETC, but would only receive Lifeline support for service provided over the facilities they own.

Next, the FCC seeks comment on continuing the phase down of Lifeline support for voice-only services. Lifeline support for voice is set to end on December 1, 2021, with an exception permitting Lifeline voice support to continue in Census blocks where there is only one Lifeline provider. Comment is sought on TracFone Wireless’s proposal to allow Lifeline providers to meet the program’s minimum service standards through plans that provide subscribers with a particular number of “units” that can be used for either voice minutes or broadband service.

Next, the FCC seeks comment on eliminating the Lifeline program’s equipment requirement. That rule requires that any Lifeline provider that provides devices to its consumers must ensure that all such devices are Wi-Fi enabled, prohibits tethering charges, and requires mobile broadband providers to offer devices capable of being used as a hotspot.

The FCC seeks comment on revising the Lifeline program’s audit requirement. Lifeline providers drawing more than $5 million annually from the program must obtain independent biennial audits. The FCC proposes moving to a purely risk-based audit requirement in which various risk factors are used to identify providers that must undergo audits. To eliminate the “rogue agent” problem, the FCC’s proposes prohibiting agent commissions related to enrolling subscribers in the Lifeline program and, and also proposes codifying a requirement that ETC representatives who participate in customer enrollment register with USAC.

Next, the FCC seeks comment on directing USAC to periodically report suspicious activity or trends to the FCC Enforcement Bureau and any relevant state agencies. Suspicious activity would include trend analysis of data from the National Lifeline Accountability Database and information gained from analytics on the National Verifier data.

Finally, the FCC proposes to adopt a self-enforcing budget mechanism to cap annual Lifeline disbursements at a given year’s budget. Alternatively, the FCC seeks comment on implementing a budget mechanism that would allow Lifeline spending in a given period to exceed the cap, but would result in Lifeline disbursements being reduced in the next budget period to accommodate the excessive spending.

More 600 MHz License Applications Accepted

October 12, 2017 – The Federal Communications Commission has announced that more 600 MHz license long-form applications have been accepted for review. A list of the long-form applications that have been accepted is available by licensee, as is a list organized by market area. The CC may return or dismiss any application if it is found, upon further examination, to be defective or not in conformance with the FCC’s rules. Petitions to deny the applications must be filed no later than October 23, 2017, ten days after the date of the FCC’s Public Notice. Oppositions to a petition to deny must be filed no later than October 30, 2017, five business days after the filing date for petitions to deny. Replies to oppositions must be filed no later than November 6, 2017. The FCC’s initial review of long-form applications of other winning bidders is ongoing.

Another Big Agenda Scheduled for FCC October Meeting

October 3, 2017 – FCC Chairman Ajit Pai has announced the tentatively agenda for the FCC’s next open meeting scheduled for October 24, 2017. It includes the following items:

Support for Puerto Rico and U.S. Virgin Islands – The FCC will consider an Order to clarify the use of high-cost universal service support and permit forward funding of support to aid in reconstruction of telecommunications networks damaged by Hurricane Maria in Puerto Rico and the U.S. Virgin Islands.  (WC Docket No. 10-90)

Exemption to Calling Number Identification Service – The FCC will consider a Report and Order that would enable law enforcement and security personnel to obtain quick access to blocked Caller ID information needed to investigate threatening calls.  (CC Docket No. 91-281)

Nationwide Number Portability – The FCC will consider a Notice of Proposed Rulemaking and Notice of Inquiry that proposes to amend the FCC’s rules as well as seeks comment on industry models to move toward complete nationwide number portability.  (WC Docket No. 17-244; WC Docket No. 13-97)

Promoting Investment in the 3550-3700 MHz Band – The FCC will consider a Notice of Proposed Rulemaking that would seek comment and propose changes to the Priority Access License rules in the 3550-3700 MHz (3.5 GHz) band.  (GN Docket No. 17-258)

Hearing Aid Compatibility and Volume Control – The FCC will consider a Report and Order and Order on Reconsideration on hearing aid compatibility (HAC) that would update the volume control standard for wireline telephones, extend wireline HAC requirements to cover telephones used with advanced communications services, adopt a volume control rule for wireless handsets, and delete from the FCC’s rules an obsolete wireless HAC standard.  (CG Docket No. 13-46, WT Docket Nos. 07-250, 10-254)

Part 43 Reporting Requirements for U.S. Providers of International Services – The FCC will consider a Report and Order that would: (1) eliminate the Traffic and Revenue Reports and (2) streamline the Circuit Capacity Reports.  (IB Docket Nos. 17-55 and 16-131)

Elimination of Main Studio Rule – The FCC will consider a Report and Order eliminating the rule that requires each AM, FM, and television broadcast station to maintain a main studio located in or near its community of license.  (MB Docket No. 17-106)

Updates to Rules Governing Ancillary/Supplementary Services and Broadcast Public Notices – The FCC will consider a Notice of Proposed Rulemaking that seeks comment on updates to Section 73.624(g) of its rules, which imposes certain reporting obligations for broadcasters relating to the provision of ancillary or supplementary services, and Section 73.3580, which requires public notice of the filing of broadcast applications, including through newspapers.  (MB Docket Nos. 17-264, 17-105)

 The draft text of each item expected to be considered at the meeting is available on the FCC’s website. The open meeting is scheduled for 10:30 a.m. EDT on Tuesday, October 24, 2017. It will be streamed live at www.fcc.gov/live.

Minnesota Chooses FirstNet, Brings State Opt-In Total To 23

October 4, 2017 – Minnesota Governor Mark Dayton has announced that he has accepted the nationwide public-safety broadband network deployment plan for his state offered by FirstNet and AT&T. Minnesota is the 23rd U.S. state to opt-in to FirstNet. Governor Dayton made the decision after public safety working groups extensively vetted the FirstNet state plan for Minnesota “to ensure the dedicated wireless broadband network offered the tools needed for those on the front lines of an emergency.” Additionally, in his opt-in letter to FirstNet, Governor Dayton “stressed the importance of FirstNet consulting with the 11 Federally Recognized Minnesota tribes as sovereign nations, to determine whether building out the public safety communications network on their land would be beneficial to their citizens.”

The other U.S. states and territories that have already announced their decisions to opt-in to the FirstNet public safety network are Virginia, Wyoming, Arkansas, Kentucky, Iowa, New Jersey, West Virginia, New Mexico, Michigan, Maine, Montana, Arizona, Kansas, Nevada, Hawaii, Alaska, Tennessee, Nebraska, Maryland, Idaho, Texas, Louisiana, the U.S. Virgin Islands, and Puerto Rico. The remaining states and territories have until December 28, 2017 to either accept their network plans and opt-in to FirstNet, or opt-out of FirstNet and initiate the process for deploying their own Radio Access Networks that are interoperable with the FirstNet network.  

FCC Proposes $3.9 Million Slamming and Cramming Fine

October 3, 2017 – The Federal Communications Commission (FCC) has issued a Notice Of Apparent Liability For Forfeiture that proposes a penalty of $3,963,722 against Neon Phone Service, Inc. for violating the FCC’s rules prohibiting slamming and cramming. “Slamming” is the common name for the illegal practice of switching a consumer's wireline telephone company for long distance service without permission. Cramming occurs when a service provider places charges on a subscriber’s bill for products and services that the subscriber did not authorize. Neon is a non-facilities based interexchange carrier authorized to provide domestic and international long distance telecommunications service. After receiving numerous complaints against Neon, the FCC initiated an investigation, and sent the company a letter of inquiry (LOI). Neon, however, failed to provide a response to the FCC’s LOI, even after receiving an extension of time to submit an answer.

According to the FCC’s NAL, Neon allegedly submitted requests to switch consumers’ preferred long distance carriers without their authorization and placed unauthorized charges for its long distance service on consumers’ telephone bills. The FCC also alleges “Neon deceptively marketed its service as part of its apparent slamming and cramming scheme.” Also, the FCC alleges that in two of the instances of slamming and cramming on which the NAL is based, evidence shows that Neon fabricated third party verification recordings to make it appear that these consumers authorized the carrier change and then provided those fabricated recordings to the FCC as evidence of consumer authorization in apparent violation of Section 1.17 of the FCC’s rules.

FCC Declares Mobile Wireless Industry Competitive

September 27, 2017 – The FCC has released its 20th Mobile Wireless Competition Report, and for the first time since the 13th Report issued in 2009, has concluded “that there is effective competition in the marketplace for mobile wireless services.” To produce the 20th Report, the FCC relied on 2016 data for all mobile wireless services, including voice, messaging, and broadband, but also used certain data, where available, for early 2017. For the competition analysis, the FCC returned to the narrow scope of inquiry used in the 8th Report through the 12th Report. In the 20th Report, the FCC focuses only on competition in the provision of mobile wireless services, rather than attempting to examine the broader “mobile wireless ecosystem,” which the FCC previously found to be too complex to make a meaningful finding regarding effective competition. The 20th Report also uses several data sources to estimate the number of mobile wireless subscribers and connections. Based on one such source, the Numbering Resource Utilization Forecast, which tracks the quantity of phone numbers that have been assigned to mobile wireless devices, the 20th Report shows there were approximately 398 million mobile wireless connections at the end of 2016. Past reports are available from the FCC’s website.

Level 3 Complaint Alleges AT&T Tariff, Tandem-Switched Transports Rates Are Unlawful

September 13, 2017 – Level 3 Communications, LLC has filed a formal complaint with the FCC against AT&T Inc. and its price cap carrier subsidiaries alleging that AT&T’s tariffs for tandem-switched transport access services are unlawful, unjust, and unreasonable. Level 3 claims that AT&T is violating Section 51.907(g)(2) of the FCC’s rules, which requires price cap local exchange carriers to transition to bill-and-keep for tandem-switched transport access services for calls that traverse a tandem switch that is owned by the “terminating carrier” or its “affiliates.” According to Level 3, AT&T is interpreting the rule to apply only if a call traverses a tandem switch owned by a price cap carrier and the price cap carrier is also the “terminating carrier. Level 3 further claims that AT&T contends the term“affiliates” only “comes into play” when the price cap carrier that owns the end office has an affiliate that owns the tandem. Pursuant to the FCC Enforcement Bureau’s notice of formal complaint setting a procedural schedule, AT&T must file an answer to the complaint by October 9, 2017. Level 3 then has until October 24, 2017 to reply to AT&T’s answer, and AT&T will have until November 8, 2017 to file a surreply to Level 3’s reply.

USF Contribution Factor Reaches Record High of 18.8 Percent

September 12, 2017 – The FCC’s Office of Managing Director (OMD) has announced that the proposed universal service fund (USF) contribution factor for the fourth quarter of 2017 will be 18.8 percent. This is a new record high, breaking the previous all-time high of 18.2 percent set in the first quarter of 2016. OMD also announced that for the fourth quarter of 2017, the Universal Service Administrative Company (USAC) projects that it will collect $13.025 billion in total interstate and international end-user telecommunications revenues. USAC estimates that $2.043 billion will be needed to cover the total demand and expenses for all Federal universal service support mechanisms in the fourth quarter of 2017. If the FCC takes no action on the proposed USF contribution factor within 14 days, it will be declared approved. Below are historical USF contribution factors.

2017-Q1 – 16.7     2016-Q1 – 18.2     2015-Q1 – 16.8

2017-Q2 – 17.4     2016-Q2 – 17.9     2015-Q2 – 17.4

2017-Q3 – 17.1     2016-Q3 – 17.9     2015-Q3 – 17.1

2017-Q4 – 18.8     2016-Q4 – 17.4     2015-Q4 – 16.7

2014-Q1 – 16.4     2013-Q1 – 16.1     2012-Q1 – 17.9

2014-Q2 – 16.6     2013-Q2 – 15.5     2012-Q2 – 17.4

2014-Q3 – 15.7     2013-Q3 – 15.1     2012-Q3 – 15.7

2014-Q4 – 16.1     2013-Q4 – 15.6     2012-Q4 – 17.4

2011-Q1 – 15.5     2010-Q1 – 14.1     2009-Q1 – 9.5

2011-Q2 – 14.9     2010-Q2 – 15.3     2009-Q2 – 11.3

2011-Q3 – 14.4     2010-Q3 – 13.6     2009-Q3 – 12.9

2011-Q4 – 15.3     2010-Q4 – 12.9     2009-Q4 – 12.3

FCC To Refresh The Record On Intercarrier Compensation Reform Issues

September 8, 2017 – The FCC’s Wireline Competition Bureau has released a Public Notice asking interested parties to refresh the record on intercarrier compensation issues raised by the FCC in the 2011 regarding (1) defining the network edge for traffic that interconnects with the Public Switched Telephone Network, (2) tandem switching and transport, and (3) transit (non-access traffic functional equivalent of tandem switching and transport). The FCC is seeking new input on these intercarrier compensation issues in light of developments that have occurred since the 2011 USF/ICC Transformation Order and FNPRM, including the transition to bill-and-keep. Comments are due 30 days after the Public Notice is published in the Federal Register. Reply comments are due 45 days from publication.

FCC Removes Outmoded Rules from Code of Federal Regulations

September 8, 2017 – The FCC has released on Order that removes certain regulations from the Code of Federal Regulations (CFR). Specifically, two sets of rules have been removed: (1) certain rules from which the FCC has granted unconditional forbearance for all carriers, and (2) rules in certain sections that reference telegraph service. The first set of rules are being removed as a result of the 2013 USTelecom Forbearance Orders. They are:  (1) sections 42.4, 42.5, and 42.7, which required carriers to preserve certain records; (2) section 64.1, which governed traffic damage claims for carriers engaged in radio-telegraph, wire-telegraph, or ocean-cable service; (3) section 64.301, which required carriers to provide communications services to foreign governments for international communications; (4) section 64.501, which governed telephone companies’ obligations when recording telephone conversations; (5) section 64.804(c)-(g), which governed a carrier’s recordkeeping and other obligations when it extended unsecured credit for communications services to candidates for federal office; and (6) section 64.5001(a)-(c)(2), and (c)(4), which imposed certain reporting and certification requirements on prepaid calling card providers. The second set of rules are being removed “[i]n light of the evolution of technology over many decades away from the use of telegraphs.”

FCC Sets Tentative Agenda for September Open Meeting – FCC Modernization Month

September 7, 2017 – The Federal Communications Commission has announced a tentative agenda for its September 26, 2017 open meeting. The meeting is scheduled to being at 10:30 a.m. EDT, and will be streamed live at www.fcc.gov/live. The draft text of each item on the tentative agenda listed below is publicly available online.

Amendment of Parts 74, 76 and 78 of the Commission’s Rules Regarding Maintenance of Copies of FCC Rules – The Commission will consider a Notice of Proposed Rulemaking that proposes to eliminate rules requiring certain broadcast and cable entities to maintain paper copies of FCC rules.  (MB Docket Nos. 17-105; 17-231)

Cable Television Technical and Operational Standards – The Commission will consider a Report and Order that modernizes its cable television technical rules to reflect the cable industry’s use of digital transmission systems.  (MB Docket No. 12-217)

Revitalization of the AM Radio Service – The Commission will consider a Third Report and Order that will relax or eliminate certain rules pertaining to AM broadcasters employing and maintaining directional antenna arrays.  (MB Docket No. 13-249)

Updating Rules for Non-Geostationary Satellites in the Fixed-Satellite Service – The Commission will consider a Report and Order and Further Notice of Proposed Rulemaking that recommends updating and streamlining the Commission’s rules to facilitate the licensing of the next generation of non-geostationary, fixed-satellite service systems.  (IB Docket No. 16-408)

Revisions to Reporting Requirements Governing Hearing Aid-Compatible Mobile Handsets – The Commission will consider a Notice of Proposed Rulemaking that seeks comment on revisions to the wireless hearing aid compatibility annual reporting requirement to provide relief to non-nationwide service providers.  (WT Docket No. 17-228)

Toll Free Assignment Modernization – The Commission will consider a Notice of Proposed Rulemaking that proposes to amend the Commission’s rules to allow for use of auctions to assign certain toll free numbers and considers other means by which to modernize the administration and assignment of toll free numbers.  (WC Docket No. 17-192; CC Docket No 95-155)

911 Access, Routing, and Location in Enterprise Communications Systems – The Commission will consider a Notice of Inquiry that seeks comment on the provision of 911 by enterprise communications systems that serve businesses, hotels, educational institutions, and government entities.  The NOI seeks comment on the capabilities of these systems to support direct calling to 911, routing to the appropriate 911 call center, and transmission of the caller’s location information, as well as to ensure that the 911 capabilities of these systems keep pace with technological developments and public expectations.  (PS Docket No. 17-239)

20th Mobile Wireless Competition Report – The Commission will consider a Report analyzing the state of competition in the mobile wireless industry.  (WT Docket No. 17-69)

Enforcement Bureau Action - The Commission will consider an enforcement action.

National Lifeline Verifier Set to Launch in Six States in December 2017

August 31, 2017 – The FCC has announced that the Universal Service Administrative Company (USAC) will deploy the National Lifeline Eligibility Verifier in the following six states in December 2017: Colorado, Mississippi, Montana, New Mexico, Utah, and Wyoming. The National Verifier will determine whether individuals are eligible for Lifeline benefits, conduct checks to prevent individuals from receiving duplicate benefits, recertify Lifeline subscriber eligibility, and calculate support payments to Lifeline service providers. The National Verifier will have a soft launch date of December 5, 2017, and a hard launch date of March 13, 2018. During the soft launch, Lifeline service providers may begin using the National Verifier for eligibility determinations but may also continue to use existing eligibility determination processes. On the date of the hard launch, all Lifeline eligibility determinations and recertifications in the initial six states must be conducted by the National Verifier, pursuant to the FCC’s rules. Additional information on the National Verifier is available on USAC’s website.

FCC Reviewing The State of Video Competition

August 24, 2017 – The FCC’s Media Bureau has released a Public Notice requesting the submission of data that will enable the Bureau to compile the 19th Report on the status of competition in the market for the delivery of video programming. For the 19th Report, the Media Bureau anticipates using an analytical framework that consists of three types of entities that deliver video programming: multichannel video programming distributors (MVPDs), online video distributors (OVDs), and broadcast television stations. The Bureau has requested information and comments on the state of competition within each type of entity, as well as data on how the different types of providers compete and interact with each other. The Media Bureau also is seeking comments on the relationship between the common ownership of video content and video delivery platforms. Comments are due on or before October 10, 2017. Reply comments are due November 9, 2017.

FCC Form 477 Comments Due September 25

August 24, 2017 – The comment deadlines for the FCC’s Further Notice of Proposed Rulemaking aimed at improving the FCC Form 477 data collection process have been announced. Comments are due on or before September 25, 2017 and reply comments are due on or before October 10, 2017.

The FCC uses Form 477 to collect data on communications services, including broadband services on a biannual basis. In recent years, FCC Form 477 data has played a much larger part in the FCC’s policymaking. For example, in addition to using Form 477 data to compile annual reports such as the broadband progress report, the FCC uses Form 477 information in its universal service proceedings to determine whether areas have access to broadband service and whether certain areas are eligible for universal service support. Form 477 data played an important role in the Business Data Services proceeding. By issuing the FNPRM and reforming the Form 477 process, the FCC hopes to achieve two goals: collect better and more accurate information on Form 477; and increase Form 477’s usefulness to the FCC, Congress, industry, and the public.

Order Eliminating ETC Reporting Rules Effective September 22

August 23, 2017 – In July 2017, the Federal Communications Commission adopted an Order that eliminated several annual reporting requirements for eligible telecommunications carriers (ETCs) that receive high-cost universal service support. A summary of the FCC’s action was recently published in the Federal Register, giving the Order an effective date of September 22, 2017. Accordingly, the FCC’s Order will streamline annual ETC Form 481 regulatory filings beginning in 2018.

Senators' B-CROP Act Would Authorize Grant Funding For Rural Broadband

August 21, 2017 – Senators Kirsten Gillibrand (D-NY) and Shelley Moore Capito (R-WV) have introduced the Broadband Connections for Rural Opportunities Program (B-CROP) Act (S. 1676). The bill would revise Section 601 of the Rural Electrification Act (7 U.S.C. § 950bb) by adding grants to the types of mechanisms authorized to fund access to broadband services in rural areas. Section 601 currently only allows loans and loan guarantees. The B-CROP Act also does the following:

• For grants, loans, or loan guarantees, gives priority to projects in rural areas that are currently unserved by high-speed broadband.
• Requires that any grant, loan, or loan guarantee be coordinated with and complement the FCC’s universal service high-cost support programs.
• Increases the authorized funding for RUS’s Broadband programs from $25 to $50 million per fiscal year.

The B-CROP Act has been referred to the Senate Committee on Agriculture, Nutrition, and Forestry. Senators Gillibrand and Capito introduced the B-CROP Act during the last congress, but it was unsuccessful.

T-Mobile Becomes First Wireless Carrier to Turn on 600 MHz Spectrum

August 16, 2017 – Nationwide mobile wireless provider T-Mobile has announced that “it has begun lighting up its new 600 MHz LTE network.” According to a press release, T-Mobile switched on 600 MHz LTE network sites in Cheyenne, Wyoming using Nokia equipment. The FCC granted T-Mobile’s 600 MHz spectrum licenses in June. T-Mobile also announced it will fire up 600 MHz LTE sites this year in the following areas: Wyoming, Northwest Oregon, West Texas, Southwest Kansas, the Oklahoma panhandle, Western North Dakota, Maine, Coastal North Carolina, Central Pennsylvania, Central Virginia and Eastern Washington. The first 600 MHz compatible wireless phones and devices, however, are not scheduled to hit the market until sometime in the fourth quarter of 2017.

Comments on NTCA / USTelecom USF Contribution Forbearance Petition Due September 13

August 14, 2017 – The FCC has invited comments on a petition filed by NTCA and USTelecom requesting temporary forbearance of the application of universal service fund contribution rules to broadband Internet access transmission services provided by rural local exchange carriers. The two broadband associations are seeking forbearance “pending the completion of comprehensive USF contributions reform.” Comments or oppositions to the petition are due on or before September 13, 2017. Reply comments are due September 28, 2017. The proceeding has been designated as WC Docket No. 17-206.

13 ILEC Study Areas Potentially Subject to 100% Competitive Overlap

August 11, 2017 – The FCC’s has published a list of 13 ILEC study areas potentially subject to the 100 percent competitive overlap rule. Interested parties may file comments on whether the unsubsidized competitors identified in those study areas are in fact offering voice and 10/1 Mbps broadband services to 100 percent of locations in the relevant census blocks meeting the requirements in Section 54.319(a) of the FCC’s rules. Comments are due on or before September 11, 2017. Reply comments are due October 10, 2017.

Prior to submitting comments, interested parties should review the parts of the Public Notice that provide examples of the types of information the FCC will find most persuasive and describe the FCC’s review process. Following the submission of comments, the FCC will publish a final determination of the ILEC study areas subject to 100 percent overlap. Those study areas will have their high-cost universal service support frozen at the amount disbursed in the prior calendar year, and they will then receive two-thirds and one-third of the frozen baseline amount in subsequent years.

Comments on Slamming & Cramming NPRM Due September 13

August 14, 2017 – Comment deadlines for the FCC’s Notice of Proposed Rulemaking that suggests strengthening existing slamming and cramming rules have been set. Comments are due on or before September 13, 2017. Reply comments are due October 13, 2017.

“Slamming” is an industry term for the illegal practice of switching a consumer's wireline telephone company for local, local toll, or long distance service without permission, while “cramming” occurs when a service provider places charges on a subscriber’s bill for products and services that the subscriber did not authorize. In the NPRM, the FCC seeks comment on a number of proposals, including the following:

• The FCC proposes to codify a rule banning misrepresentations on sales calls.
• The FCC seeks comment on requiring carriers that rely on third-party verification to record the entirety of sales calls that precede a consumer’s preferred carrier switch.
• The FCC seeks comment on making PIC freezes automatic, rather than requiring consumers to affirmatively opt-in to PIC freeze protection.
• The FCC proposes to codify a rule prohibiting cramming.
• The FCC seeks comment on requiring wireline carriers to block third-party charges for local and long-distance service by default, and only bill for such charges if a consumer opts in.
• The FCC seeks comment on requiring carriers to confirm or “double-check” whether a subscriber wants to switch its preferred provider before making a change, as an alternative to requiring carriers to block third-party charges by default.

FCC Accepts More 600 MHz Band License Applications

August 9, 2017 – The FCC has announced that 13 long-form applications of 600 MHz licensees have been found, upon initial review, to be acceptable for filing. Petitions to deny the applications must be filed no later than August 21, 2017, ten days after the date of the FCC’s Public Notice. Oppositions to a petition to deny must be filed no later than August 28, 2017, five business days after the filing date for petitions to deny. Replies to oppositions must be filed no later than September 5, 2017. A list of the applications sorted by licensee is available, along with a list of the applications sorted by market. The FCC’s initial review of long-form applications of other winning bidders is ongoing.  A subsequent notice will announce when they are accepted for filing.

USAC To Move All USF Funds to U.S. Treasury

August 8, 2017 – The Universal Service Administrative Company (USAC) has announced that it is coordinating with the FCC on plans to transfer the money that makes up the Universal Service Fund (USF) to the U.S. Department of Treasury. USAC currently maintains USF money in a private bank account. USAC has stated it will provide detailed transition information in November of 2017, and anticipates completing the transfer of USF funds to the U.S. Treasury during 2018.

The U.S. Government Accountability Office recently recommended that USF money be moved from a private bank account to the U.S. Treasury in its report on fraud in the Lifeline program. According to the GAO, moving the USF to the Treasury will increase federal oversight of the funds and add regulatory safeguards. One other “benefit” of the move suggested by the GAO is that USF money could be used to offset federal debts.

Pai FCC Opens Up Inquiry on U.S. Broadband Deployment

August 8, 2017 – The Federal Communications Commission has released a Notice of Inquiry requesting comment on “whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” The FCC will use the information to compile its 13th Section 706 Report. In past years, the FCC has concluded that U.S. broadband deployment is inadequate, which pursuant to Section 706, required the FCC to take immediate action to accelerate broadband deployment by removing barriers to infrastructure investment and promoting competition. However, with Chairman Ajit Pai now at the helm, the FCC is expected to determine that U.S. broadband deployment is adequate. Among other things, in the NOI, the FCC proposes to set the speed benchmark for mobile broadband services at 10 Mbps downstream and 1 Mbps upstream, and asks whether it should maintain the 25 Mbps download, 3 Mbps upload speed benchmark for fixed broadband, or whether it should be revised to take into account data on actual subscriptions to various speed tiers. Comments in response to the NOI are due on or before September 7, 2017. Reply comments are due September 22, 2017.

Brief of Petitioner Filed in Carpenter v. U.S.

August 7, 2017 – The Petitioner’s initial brief in Carpenter v. U.S. has been filed with the Supreme Court. The appeal involves law enforcement’s warrantless acquisition of historical cell site location information, and presents a single question for the Court: Whether the warrantless seizure and search of historical cell phone records revealing the location and movements of a cell phone user over the course of 127 days is permitted by the Fourth Amendment. The date for oral argument has not been set.

8th Circuit Upholds FCC’s 2015 Pole Attachment Order on Reconsideration

July 31, 2017 – The Eighth Circuit Court of Appeals has issued an opinion that upholds a November 2015 FCC Order on Reconsideration that revised the telecom rate formula for pole attachments. The FCC’s 2015 order, among other things, broadened the use of cost allocators in the telecom rate formula by adding cost allocators for poles with 2 and 4 attaching entities. The rate formula adopted in the 2015 order was meant to bring cable and telecom rates for pole attachments into parity at or near the cable rate formula level and encourage deployment broadband Internet access services. The court’s opinion – Ameren Corp. et al. v. FCC – denied a petition for review of the order brought by a group of electric companies. They argued that the FCC’s order “defies Congress’ intent to establish two different rates” in Section 224 – one rate for cable and one rate for telecom attachments. The court disagreed, giving wide latitude to the FCC’s interpretation of the term “cost” in Section 224(e). The court found that Section 224(d) requires that pole attachment rates for cable providers fall within a certain range, and 224(e) requires that rates for telecommunications providers be calculated pursuant to a certain formula, which allows the two rates “to diverge.” In deferring to and thus upholding the FCC’s order, the court concluded that the FCC’s decision represented “a reasonable policy choice.”

Senate AIRWAVES Act Would Put More Spectrum In The Pipeline

August 1, 2017 – Senators Cory Gardner (R-CO) and Maggie Hassan (D-NH) have introduced the Advancing Innovation and Reinvigorating Widespread Access to Viable Electromagnetic Spectrum (or AIRWAVES) Act. The bi-partisan spectrum bill would open up more spectrum for commercial use on a licensed basis, and it would free up more spectrum for unlicensed use. Also, the bill would require 10 percent of all proceeds from FCC spectrum auctions be placed in a fund to help support wireless broadband infrastructure deployments in unserved and underserved areas.

Congressional Representatives Urge FCC To Make White Spaces Available For Rural Broadband

July 31, 2017 – A bi-partisan group of 43 Congressional representatives have sent a letter to Federal Communications Commission (FCC) Chairman Ajit Pai and FCC Commissioners Mignon Clyburn and Michael O’Reilly urging the FCC “to preserve at least three, 6 MHz television white space channels in every media market across the United States in order to promote access to affordable broadband internet, particularly in rural and underserved areas.” The group is led by Representative Kevin Cramer (R-ND), and includes members of the House Rural Broadband Caucus and other Representatives interested in closing the digital divide. They believe that TV White Spaces “have strong potential to revolutionize broadband internet accessibility in rural areas.” The FCC has already adopted rules permitting White Space device use in the 600 MHz duplex gap and channel 37. In the letter, the Representatives ask the FCC to maintain these rules “as it reviews petitions for reconsideration,” and request that the FCC preserve a vacant 6 MH TV channel in the repacked broadcast TV band.

The Representatives’ appeal to reserve at least three channels (18 MHz) below 700 MHz available nationwide for unlicensed TV White Space use mirrors a recent request made by Microsoft as part of its Airband initiative. Airband is Microsoft’s ambitious plan to help bring broadband service to the approximately 23.4 million rural Americans that lack service with speeds of 25 Mbps downstream by partnering with rural telecommunications companies to deploy TV White Space broadband networks. Microsoft has set a goal of bringing broadband connectivity to 2 million people in rural America by July 4, 2022. It intends to have 12 projects up and running in 12 states in the next 12 months. White Space projects are planned for Arizona, Georgia, Kansas, Maine, Michigan, New York, North Dakota, South Dakota, Texas, Virginia, Washington, and Wisconsin. Further information on the Airband initiative is available in Microsoft’s rural broadband strategy white paper and on Microsoft’s website.

Bill Would Kick Wireless Providers Out of The Lifeline Program

July 28, 2017 – Representative Austin Scott (R-GA) has introduced the Stop Taxpayer Funded Cell Phones Act of 2017 (H.R. 3546). The bill, if passed, would prohibit all mobile wireless providers from receiving universal service fund support from the Lifeline program beginning in 2018. Representative Scott’s bill also contains a provision requiring 2018 universal service fund contributions to be collected as if wireless providers will receive the same amount of Lifeline support received in 2017. It then directs this excess funding to be deposited in the general fund of the U.S. Treasury for the sole purpose of deficit reduction. The bill has been referred to the House Energy and Commerce Committee. Representative Scott has introduced similar versions of the bill in the last two congresses.

ECPA Reform Bills Introduced In The Senate

July 27, 2017 – Senators Mike Lee (R-UT) and Patrick Leahy (D-VT) have introduced the Electronic Communications Privacy Act (ECPA) Modernization Act of 2017. Among other things, the bill would amend the ECPA by requiring law enforcement agents to obtain a warrant before acquiring the content of electronic messages. It would also require governmental agents to obtain a warrant when seeking stored or real-time location information from third-party service providers, or using IMSI-catchers or stingrays to obtain location data from cell phones. The ECPA was enacted in 1986 to update the Wiretap Act to account for advances in computer and communications technologies, and in its current form, is woefully out-of-date.

Additionally, Senators Lee and Leahy, along with six other co-sponsors have introduced the Email Privacy Act of 2017. The bill would amend Title II of ECPA, the Stored Communications Act, to require law enforcement agents to obtain “a search warrant based on probable cause whenever it seeks to obtain...emails, photos, or texts held by technology companies.” Similar legislation was passed unanimously by the House of Representatives on February 6, 2017.

Rural Call Completion Comments Due August 28th

July 27, 2017 – The comment cycle for the FCC’s rural call completion Second Further Notice of Proposed Rulemaking has been announced. Comments are due on or before August 28, 2017, and reply comments are due on or before September 25, 2017. In the FNPRM, the FCC seeks comment on eliminating the existing data recording and reporting rules, and replacing them with rules that require long-distance carriers to hold their intermediate providers accountable for call failures.

RUS Announces Second Application Window For Broadband Loan Program

July 25, 2017 – The U.S. Department of Agriculture’s Rural Utilities Service (RUS) has announced the opening of a second application window for fiscal year 2017 for the Rural Broadband Access Loan and Loan Guarantee Program. RUS’s Broadband Loan Program “furnishes loans and loan guarantees to provide funds for the costs of construction, improvement, or acquisition of facilities and equipment needed to provide service at the broadband lending speed in eligible rural areas.” RUS has $115.2 million available in FY 2017 appropriated and carryover funds, and estimates that at least $60 million of that amount will be available to fund applications received in the recently announced second application window. Applications will be accepted immediately through September 30, 2017. RUS will review, evaluate, and process loan applications as they are received.

For the second application window for FY 2017, loans will not be made for less than $100,000. The maximum loan amount that will be considered has been raised to $20 million. Unfunded applications from the first application window will not automatically be considered in the second application window. Unfunded applicants must reapply to receive consideration. Additionally, for the second application window, RUS has revised the definition of Broadband Service – the rate used to determine if an area is eligible for funding – to mean the minimum rate-of-data transmission of 25 Mbps downstream and 3 Mbps upstream for both mobile and fixed service. RUS has also raised the definition Broadband Lending Speed – the rate at which loan applicants must propose to offer new broadband service – to a minimum bandwidth of 25 Mbps downstream and 3 Mbps upstream for both mobile and fixed service to the customer. Applications must be submitted through the online application system located at https://www.rd.usda.gov/rograms-services/d-apply.

Pallone’s $1 Billion Viewer Protection Act Would Increase Funding For Broadcaster Relocation Expenses

July 20, 2017 – Representative Frank Pallone, Jr. (D-NJ) has introduced the Viewer Protection Act of 2017. The primary purpose of the bill is to authorize an appropriation of $1 billion to create a Viewer Protection Fund which would serve as a source of reserve funding in the event that the Incentive Auction’s Broadcaster Relocation Fund is insufficient. Congress sized the Broadcaster Relocation Fund at $1.75 billion in the Spectrum Act of 2012. The fund will reimburse television broadcasters for their expenses to move to new TV channels as part of the spectrum repack that will occur due to the recently completed Incentive Auction. Initial FCC estimates, however, indicate that $1.75 billion will not be enough to cover broadcaster moving costs. As of July 14, 2017, the reimbursable costs that have been reported by broadcasters totals an estimated $2.115 billion. The FCC expects that amount to increase somewhat after it receives cost estimates from multichannel video programming distributors and small number of other stations. The Viewer Protection Fund would also be available to reimburse “FM radio stations and multi-channel video distributors for reasonable costs incurred related to the [repack],” as well as “to assist low power TV stations that are displaced.” Additionally, Representative Pallone’s bill authorizes an appropriation of $90 million to the FCC “to conduct a consumer outreach campaign” to inform consumers of changes to broadcast television channels resulting from the Incentive Auction repack. Finally, the bill would require the FCC, by order, to delegate authority to the FCC Media Bureau to modify the 39-month period for reassigned stations to transition to their post-auction channel assignments.

FCC Announces Counties Where Conditional Forbearance From Lifeline Voice Obligation Applies

July 17, 2017 – The FCC’s Wireline Competition Bureau has announced the counties in certain states in which conditional forbearance from the obligation to offer Lifeline-supported voice service applies. The grant of conditional forbearance is effective starting on September 15, 2017.

In the 2016 Lifeline Modernization Order, the FCC streamlined certain eligible telecommunications carrier (“ETC”) service obligations using forbearance authority in hopes of encouraging broader participation and more robust competition in the Lifeline market. For ETCs with designations enabling receipt of both high-cost support and Lifeline support (not Lifeline-only ETCs), the FCC granted forbearance from the obligation to offer and advertise Lifeline voice service in counties where the following conditions are met:

1. 51 percent of Lifeline subscribers in a county are obtaining broadband service;
2. There are at least three other providers of Lifeline broadband service that each serve at least five percent of the Lifeline broadband subscribers in that county; and
3. The ETC does not actually receive federal high-cost universal service support.

Appendix A to the FCC’s Public Notice lists the counties where the first two forbearance conditions are met. For ETCs that are receiving high-cost support in any of the listed counties, the forbearance applies only in areas within the county where the ETC does not receive high-cost support. The conditional forbearance does not encompass an ETC’s existing Lifeline subscribers served as of July 17, 2017 – the date of the Public Notice.

FCC Grants 600 MHz Licenses

July 19, 2017 – The Federal Communications Commission has granted spectrum licenses to 15 winning bidders in the 600 MHz Incentive Auction. The FCC accepted their long-form applications on June 21, 2017, and upon further review, has determined that the applications are complete and in conformance with the FCC’s rules. Also, none of the license applications were subject to a petition to deny or a similar challenge. A list of the newly-granted 600 MHz licenses sorted by licensee is available, along with a list sorted by market (Partial Economic Areas). The FCC’s initial review of long-form applications of other winning bidders is ongoing.  A subsequent notice will announce when they are accepted for filing.

FCC Wants To Strengthen Slamming & Cramming Rules

July 14, 2016 – The Federal Communications Commission has released a Notice of Proposed Rulemaking that suggests ways to strengthen its existing slamming and cramming rules. “Slamming” is an industry term for the illegal practice of switching a consumer's wireline telephone company for local, local toll, or long distance service without permission, while “cramming” occurs when a service provider places charges on a subscriber’s bill for products and services that the subscriber did not authorize. In the NPRM, the FCC seeks comment on a number of proposals, including the following:

• The FCC proposes to codify a rule banning misrepresentations on sales calls.
• The FCC seeks comment on requiring carriers that rely on third-party verification to record the entirety of sales calls that precede a consumer’s preferred carrier switch.
• The FCC seeks comment on making PIC freezes automatic, rather than requiring consumers to affirmatively opt-in to PIC freeze protection.
• The FCC proposes to codify a rule prohibiting cramming.
• The FCC seeks comment on requiring wireline carriers to block third-party charges for local and long-distance service by default, and only bill for such charges if a consumer opts in.
• The FCC seeks comment on requiring carriers to confirm or “double-check” whether a subscriber wants to switch its preferred provider before making a change, as an alternative to requiring carriers to block third-party charges by default.

Comments are due 30 days after the date the NPRM is published in the Federal Register. Reply comments are due 60 days after Federal Register publication.

CAF II Auction, Mobility Fund Challenge Process Slated For FCC August Open Meeting

July 13, 2017 – The Federal Communications Commission has released a tentative agenda for its August 3rd open meeting, containing the following items:

• Connect America Fund Phase II Auction (Auction 903) – The FCC will consider a Public Notice to initiate the pre-auction process for the Connect America Fund Phase II auction which will award up to $198 million annually for 10 years to service providers that commit to offer voice and broadband services to fixed locations in unserved high-cost areas. (AU Docket No. 17-182)
• Mobility Fund Phase II Challenge Process – The FCC will consider an Order on Reconsideration and Second Report and Order that lays out a robust challenge process that will enable the Commission to direct Mobility Fund Phase II support to primarily rural areas that lack unsubsidized 4G Long Term Evolution (LTE) service. (WC Docket No. 10-90; WT Docket No.10-208)
• FCC Form 477 – The FCC will consider a Further Notice of Proposed Rulemaking that takes a focused look at FCC Form 477 to improve the value of the data it collects. (WC Docket No. 11-10)
• Expanding Flexible Use in Mid-Band Spectrum Between 3.7 GHz and 24 GHz – The FCC will consider a Notice of Inquiry that explores opportunities for next generation services – particularly for wireless broadband – in the 3.7 GHz to 24 GHz spectrum range and asks about how we can increase efficient and effective use of this spectrum for the benefit of all services and users. (GN Docket No. 17-183)
• Wireless License Renewal and Service Continuity Reform – The FCC will consider a Second Report and Order and Further Notice of Proposed Rulemaking that would adopt unified construction, renewal, and service continuity rules for the Wireless Radio Services, while seeking comment on a range of additional possible actions to increase the number of Americans with access to wireless communications services. (WTB Docket No. 10-112)
• Transmitter Identification Requirements for Satellite Digital Video Uplink Transmissions – The FCC will consider a Memorandum Opinion and Order that waives the requirement that satellite news trucks, and other temporary-fixed satellite earth stations transmitting digital video, comply with the Digital Video Broadcasting-Carrier Identification (DVB-CID) standard if the earth station uses a modulator that cannot meet the DVB-CID standard through a software upgrade. (IB Docket No. 12-267)
• Hearing Designation Order – The FCC will consider a Hearing Designation Order.
• Enforcement Bureau Action – The FCC will consider an enforcement action.

The open meeting is scheduled for 10:30 a.m. EDT on Thursday August 3, 2017 in the FCC meeting room at the FCC’s headquarters in Washington D.C. The meeting will be streamed live online at www.fcc.gov/live.

FCC Recommends Best Practices To Prevent Sunny Day Outages

July 12, 2017 – The FCC’s Public Safety and Homeland Security Bureau (“PSHSB”) has released a list of network reliability best practices that service providers are encouraged to implement to prevent major service disruptions. Information submitted to the FCC’s Network Outage Reporting System and publicly available data show that in recent years, a number of major service outages have been caused by minor changes in network management systems. The PSHSB explains that these so-called “sunny day” outages do not result from a natural weather-related disaster or other unforeseeable catastrophe, and can result in “silent failures,” which are outages that occur without providing explicit notification or alarm to the service provider. To help prevent these outages, the PSHSB suggests that service providers should attempt to implement the following seven best practices recommended by the FCC’s Communications Security Reliability and Interoperability Council II:

1. Awareness Training:  “Network Operators, Service Providers and Equipment Suppliers should provide awareness training that stresses the services impact of network failure, the risks of various levels of threatening conditions and the roles components play in the overall architecture. Training should be provided for personnel involved in the direct operation, maintenance, provisioning, security and support of network elements.”
2. Required Experience and Training:  “Network Operators, Service Providers, and Equipment Suppliers should establish a minimum set of work experience and training courses which must be completed before personnel may be assigned to perform maintenance activities on production network elements, especially when new technology is introduced in the network.”
3. Access Privileges:  “Service Providers, Network Operators, and Equipment Suppliers should have policies on changes to and removal of access privileges upon staff member status changes.”
4. Network Change Verification:  “Network Operators should establish policies and processes for adding and configuring network elements that include approval for additions and changes to configuration tables (e.g., screening tables, call tables, trusted hosts, and calling card tables.  Verification rules should minimize the possibility of receiving inappropriate messages.”
5. Network Reconfiguration 911 Assessment:  “Service Providers and Network Operators when reconfiguring their network (e.g., changes to Virtual Private Cloud (VPC), Mobile Position Center (MPC), Gateway Mobile Location Center (GMLC), or Emergency Services Gateway (ESGW)) should assess the impact on the routing of 911 calls.”
6. Diversity Audits:  “Network Operators and Public Safety should periodically audit the physical and logical diversity called for by network design of their network segment(s) and take appropriate measures as needed.”
7. Network Monitoring:  “Network Operators, Service Providers, and Public Safety should monitor their network to enable quick response to network issues.”

Additionally, the PSHSB has developed a set of “lessons learned” based on its analysis of several recent network outages, including the massive March 8, 2017 AT&T Mobility outage in which nearly all AT&T Voice over LTE customers across the nation lost 911 service for five hours. The PSHSB recommends taking the following action to help prevent future outages or mitigate their impact:

• Access Control: Limit direct access to operations support systems that control a large number of switches, soft switches, or routers.
• Validation and Authentication: Implement validation and authentication procedures for any changes that affect call routing.
• Software-based Alarming: Work with vendors to implement software that warns technicians when a change is being made that could potentially affect a large number of calls or customers.
• Enhanced Outage Detection: Implement traffic measurements or other mechanisms in major network elements to enable the detection of failures where calls are lost but associated equipment continues to operate.
• Automatic Re-routing: Examine whether automatic re-routing of calls would be an effective remediation strategy in the event of outages.

Microsoft Launches Ambitious “Airband” Rural Broadband Initiative Using TV White Space Technology

July 11, 2017 – Microsoft has announced plans to help bring broadband to the approximately 23.4 million rural Americans that lack service with speeds of 25 Mbps downstream. Brad Smith, Microsoft President and Chief Legal Officer, publicly announced the new “Airband” initiative at a Media Institute event held at the Willard Hotel in Washington D.C. Through its Airband initiative, Microsoft will invest in partnerships with telecommunications companies that serve rural areas by covering certain capital costs of deploying TV White Space wireless broadband networks. Microsoft has stated that it has set a goal of bringing broadband connectivity to 2 million people in rural America by July 4, 2022. Microsoft intends to have 12 projects up and running in 12 states in the next 12 months. White Space projects are planned for Arizona, Georgia, Kansas, Maine, Michigan, New York, North Dakota, South Dakota, Texas, Virginia, Washington, and Wisconsin. Further information on the Airband initiative is available in Microsoft’s rural broadband strategy white paper and on Microsoft’s website.

FCC Announces Data Set for CAF BLS Competitive Overlap Challenge Process

July 10, 2017 – The FCC’s Wireline Competition Bureau (“WCB”) has announced that the updated June 30, 2016 FCC Form 477 data will be used for the competitive overlap challenge process for Connect America Fund Broadband Loop Support (“CAF BLS”). The announcement of the data set does not initiate a challenge process. Rather, it is provided to aid incumbent carriers in their planning of broadband network buildouts. Using the data, carriers may be able to determine whether parts of their service areas are potentially served by unsubsidized competitors, and as a result, may lose CAF BLS funding. The WCB has released a list showing the census blocks where competitors report broadband service, as well as a list of “competitors” aggregated to the study area level. When the WCB formally initiates the CAF BLS challenge process, competitors that seek to participate will be required to certify and provide supporting documentation demonstrating that they offer voice and broadband services meeting requisite requirements to at least 85 percent of the locations in overlapped census blocks. Incumbent carriers and interested parties will be able to respond to competitors claims. The WCB will make a final decision after “weighing all of the evidence in the record.”

FCC Eliminates Certain Unnecessary ETC Reporting Requirements

July 7, 2017 – The Federal Communications Commission (“FCC”) has eliminated several annual reporting requirements for eligible telecommunications carriers (“ETCs”) that receive high-cost universal service support. Because the FCC Form 481 deadline for 2017 has passed, the FCC’s action will streamline annual ETC regulatory filings beginning in 2018.

In the 2016 Rate-of-Return Reform Order’s further notice of proposed rulemaking, the FCC sought comment on streamlining ETC annual reporting obligations as a way to lessen regulatory reporting burdens on ETCs, particularly those that are small businesses. Specifically, the FCC requested comment on modifying or eliminating rules requiring ETCs to report (1) network outage information; (2) unfulfilled service requests; (3) the number of complaints received by an ETC per 1,000 subscribers for both voice and broadband services; and (4) pricing for voice and broadband services. The FCC also asked whether it should eliminate requirements that ETCs certify compliance with applicable service quality standards and that ETCs file duplicate copies of FCC Form 481 with the FCC, states, and Tribal governments.

In its July 7 Report and Order, the FCC has adopted all of the proposals set forth in the FNPRM. Elimination of the requirement to file duplicate copies of Form 481, however, is contingent upon the Universal Service Administrative Company’s (“USAC”) completion of an online portal for information related to high-cost universal service support. In other words, if USAC completes its online portal after the 2018 Form 481 filing date, ETCs will no longer be required to file duplicate copies of Form 481 beginning in 2019. Additionally, noting the importance of providing the public with access to non-confidential information filed by ETCs, the FCC has directed USAC “to work closely with state and Tribal governments and other stakeholders to improve public access to the information that ETCs will continue to file.”

USF Contributors Can View Invoice Summaries Online, Receive Email Notifications

July 5, 2017 – The Universal Service Administrative Company has announced that telecommunications carriers that contribute to the Universal Service Fund can now their invoice information online and receive email notifications when they become available. Prior to the announcement, USF contributors could only receive paper copies of their invoices. Contributors can now view the summary page, which is the first page of their invoices, online. USF contributors must opt-in to receive an email notification when the information is available to view online. USAC has posted instructions on its website explaining how to access online invoicing summaries and opt-in to email notifications. 

FCC Reminds Lifeline Providers Of Their Duty To Ensure Eligibility of Subscribers

June 29, 2017 – Following the release of a report by the GAO that details potential fraud in the Lifeline program, the FCC’s Wireline Competition Bureau has issued a “reminder” to eligible telecommunications carriers (“ETCs”) that they have a duty to ensure the eligibility of subscribers that seek Lifeline service. The FCC’s reminder provides the following stiff warning to all Lifeline providers: “ETCs are, and will remain, responsible for any fraud that forms the basis of their claims for Lifeline reimbursement.”

The FCC’s Public Notice also clarifies that Lifeline providers should not rely on recent FCC reforms to absolve them of liability. In 2012, the FCC created the National Lifeline Accountability Database (“NLAD”) to prevent duplicative Lifeline support, and in 2016, the FCC created the National Verifier to make Lifeline subscriber eligibility determinations, though the latter has not yet been implemented. Neither of these reforms, the FCC explains, relieve ETCs of their obligation to only provide Lifeline service to individuals that qualify for the program. As a further reminder, neither the NLAD nor the National Verifier provide a safe harbor for ETCs that improperly claim or obtain reimbursement from the universal service fund. As a final warning, the FCC reminds ETCs that in the case of fraud, they may be subject to civil and criminal penalties.

GAO Report Finds Massive Fraud In Lifeline Program

June 29, 2017 – The U.S. Government Accountability Office (“GAO”) has released a report on the FCC’s universal service Lifeline program which details many weaknesses in the administration of the program. The report, titled Additional Action Needed to Address Significant Risks in FCC’s Lifeline Program, is the product of a multi-year performance audit in which the GAO examined various Lifeline documents, interviewed officials from the FCC and USAC, analyzed subscriber data, and performed undercover tests to identify potential improper payment vulnerabilities. One noteworthy finding in the report concerns the existence of potential fraud on a large scale. As part of its audit, the GAO reviewed the eligibility of 3.5 million subscriber applications. Based on its matching of subscribers to benefit data, the GAO was unable to confirm whether roughly 1.2 million individuals of the 3.5 million reviewed, or 36 percent, participated in a qualifying benefit program as stated on their Lifeline enrollment applications. The GAO concludes the report by making seven recommendations to the FCC to improve the overall integrity of the Lifeline program.

September 1st Filing Deadline for FCC Form 477 Broadband Data

June 30, 2017 – The FCC has announced that it is now accepting FCC Form 477 data as of June 30, 2017, and the deadline for submitting that data is September 1, 2017. Data may be submitted using the FCC’s Form 477 filing interface at https://apps2.fcc.gov/form477/login.xhtml. All facilities-based broadband providers are required to file data using FCC Form 477 twice a year detailing where they offer Internet access service. Further information on how to file FCC Form 477 is available at https://www.fcc.gov/general/form-477-resources-filers.

Legislation Would Require Comptroller to Examine USF Filing Requirements

June 29, 2017 – Senator Dan Sullivan (R-AK) has introduced legislation (S. 875) that would require the U.S. Comptroller General to conduct a study and submit a report on filing requirements under the federal Universal Service Fund programs. Specifically, the bill would require the Comptroller to: (1) conduct an analysis of the filing requirements for carriers participating in a USF program, including any filings required by the Universal Service Administrative Company; (2) conduct an analysis of the financial impact of USF filing requirements on carriers; and (3) make recommendations, if any, on how to consolidate redundant filing requirements for carriers participating in a USF program. Senator Sullivan’s legislation would apply to the four traditional USF funding mechanisms – Lifeline, E-Rate, Rural Health Care, and the High-Cost fund – as well as the Connect America Fund, the Remote Areas Fund, the Connect America Fund Broadband Loop Support program, and the Mobility Fund. The bill has been referred to the Senate Committee on Commerce, Science, and Transportation.

Old FCC CPNI / Privacy Rules Brought Back To Life

June 29, 2017 – The Federal Communications Commission (“FCC”) has released an Order which clarifies that the FCC’s customer proprietary network information (“CPNI”) rules that were in existence prior to the 2016 Broadband Privacy Order are once again in effect. The FCC’s action addresses questions concerning which rules, if any, apply following Congress’ rescission of privacy rules that applied to providers of broadband Internet access service. Because the 2016 Broadband Privacy Order and the rules adopted therein have been annulled, the FCC also has dismissed as moot 11 petitions for reconsideration of that order.

In the 2016 Broadband Privacy Order, the FCC adopted rules pursuant to Section 222 of the Communications Act requiring Internet service providers to obtain a subscriber’s opt-in consent prior to using and sharing the subscriber’s sensitive information, including information about the subscriber’s web browsing history and app usage. The FCC also revised other existing Section 222 rules to harmonize them for all telecommunications carriers. Thereafter, Congress used the Congressional Review Act (“CRA”) to rescind the FCC’s new privacy rules, citing a need to ensure a level economic playing field between ISPs on one hand, and Internet edge service providers on the other. The CRA measure was signed by the President on April 3, 2017.

As a result of the Congressional action, the FCC’s rules implementing Section 222 (Part 64, Subpart U) that were in effect prior to the Broadband Privacy Order are again in effect, including the annual compliance certification requirements and recordkeeping requirements set out in Sections 64.2009(e) and (c). Unless the FCC takes further action, carriers subject to the annual compliance certification requirement must file that certification next year no later than March 1, 2018. ISPs remain subject to the duty in Section 222  to protect the confidentiality of proprietary information, but as a result of the forbearance granted in the 2015 Open Internet Order, ISPs are not subject to the FCC’s implementing rules. Appendix A of the FCC’s Order contains the rules that are once again in effect.

FCC Releases Updated Minimum Lifeline Service Standards

June 26, 2017 – the FCC’s Wireline Competition Bureau has announced updated minimum speed and usage allowance standards for Lifeline-supported services. The new minimum service standards apply to fixed broadband, mobile broadband, and mobile voice service, and will take effect on December 1, 2017.

• Fixed Broadband Service – Beginning December 1, 2017, the Lifeline minimum service standard for fixed broadband speed will be 15 Mbps downstream and 2 Mbps upstream, with a minimum usage standard of 250 GB per month.
• Mobile Broadband Service – Beginning December 1, 2017, the Lifeline minimum service standard for mobile broadband data usage will increase to 1 GB per month, while the minimum speed remains at 3G mobile technology.
• Mobile Voice Service – Beginning December 1, 2017, the Lifeline minimum service standard for mobile voice service will increase to 750 minutes per month.

Additionally, the Bureau has announced that the budget for the federal Lifeline program for calendar year 2018 will be $2.279 billion. In the 2016 Lifeline Modernization Order, the FCC adopted an initial annual budget of $2.25 billion for the Lifeline program beginning January 1, 2017. But, the FCC also indexed the Lifeline budget to inflation, which allows it to grow incrementally every year.

FCC Issues Rural Call Completion Report

June 22, 2017 – The Federal Communications Commission’s Wireline Competition Bureau (“FCC”) has released a report on the data collection conducted over the first two years that the FCC’s rural call completion rules have been in effect. Due to a number of issues with the way service providers that are subject to the rules collected and reported the data, the FCC concludes that the information “provides a less than clear understanding of the overall state of rural call completion performance.” In the report, the FCC recommends that the existing recording, retention, and reporting rules be eliminated and replaced with new rules “that could more directly address rural call completion problems.” Comments on the FCC’s report are due on or before August 3, 2017.

NTCA and US Telecom Seek Forbearance From USF Contributions for RLEC Broadband Internet Access Transmission Services

June 14, 2017 – NTCA—The Rural Broadband Association and US Telecom have filed a joint petition requesting temporary forbearance from the application of universal service fund (“USF”) contribution rules to broadband Internet access transmission services provided by rural local exchange carriers (“RLECs”).[1] The two broadband associations are seeking forbearance “pending the completion of comprehensive USF contributions reform.”

USF Contributions Background

Pursuant to Section 254(d) of the Communications Act, every telecommunications carrier that provides interstate telecommunications services must contribute to the USF.[2] Section 254(d) provides the Federal Communications Commission (“FCC”) discretionary authority to exempt carriers whose contributions would be de minimis, as well as permissive authority to require “[a]ny other provider of interstate telecommunications…to contribute to the preservation and advancement of universal service if the public interest so requires.” In 2006, using this permissive authority, the FCC required interconnected VoIP providers to contribute to the USF.[3]

Under the FCC’s rules, carriers contribute to the USF based on a percentage of their interstate and international end-user telecommunications revenues and revenue from certain provisions of interstate telecommunications (whether offered on a common carrier or private carrier basis).[4] In comparison, revenues derived from the provision of information services, including broadband Internet access services, have never been included in the USF contribution base.

When the FCC first adopted its USF contribution rules, fixed voice service carried over copper lines accounted for a majority of telecommunications carrier revenue. Since then, there have been swift and significant changes to the telecommunications marketplace. Providers and consumers continue to migrate to new technologies and advanced services. In general, these changes have given rise to uncertainty, inefficiency, and market distortions – problems which result in the inability to identify USF-assessable revenues, a continuous decline in the contribution base, and universal service contribution factors that hover around record high numbers. Recognizing this, the FCC has made piecemeal changes to the USF contribution system over the years, but unfortunately, it has not been able to adopt fundamental reform.

History of USF Contributions and RLEC Broadband Service

The history of USF contribution requirements for RLECs that act as Internet service providers (“ISPs”), either directly or through wholly-owned affiliates, is vastly different from other ISPs. In 2005, the FCC classified wireline broadband Internet access service as an information service. At the time, wireline broadband provided by RLECs was more commonly known as Digital Subscriber Line (DSL) service, which was provided over telephone lines. The FCC concluded that “facilities-based providers of wireline broadband Internet access services must continue to contribute to existing universal service support mechanisms based on the current level of reported revenue for the transmission component of their wireline broadband Internet access services.”[5] Revenues associated with the Internet access portion were exempt from contributions. The FCC’s decision was also based on policy goals – to preserve existing levels of universal service funding, and to ensure that there continue to be specific, predictable, and sufficient mechanisms to preserve and advance universal service.

In contrast, RLEC contribution requirements are strikingly different from the obligations of ISPs that began as cable television providers. Cable providers started using their facilities to provide Internet access services in the mid-1990s. Unlike local exchange carriers, cable providers were never regulated as telecommunications carriers and were never forced to “unbundle” the transmission component of their broadband Internet access service and offer it to unaffiliated entities. In 2002, the FCC declared that cable modem broadband service was an information service – a single, integrated service that enables the subscriber to utilize Internet access service through a cable provider’s facilities. Because cable modem ISPs themselves provided information services to end users, not telecommunications, they were never required to contribute to the USF based on end-user revenues from the provision of broadband services. Nor did they have any USF-assessable transmission component revenue. Even when the FCC classified all retail broadband Internet access services as telecommunications services in the 2015 Open Internet Order, cable ISPs were excused from USF contribution obligations because the FCC decided to “forbear in part from the first sentence of section 254(d) and [its] associated rules insofar as they would immediately require new universal service contributions associated with broadband Internet access service.”[6]

Additionally, for purposes of assessing the arguments in the NTCA and US Telecom joint petition, it’s important to note that USF contribution obligations within the RLEC industry were segmented as a result of the 2016 Rate-of-Return Reform Order. Those RLECs that were able to opt in to the ACAM cost model no longer have a USF contribution obligation for their broadband transmission service. Under the cost model, universal service support flows “without reference to the actual incurrence of underlying regulated costs.”

NTCA and US Telecom Forbearance Petition

NTCA and US Telecom are seeking temporary forbearance from USF contribution requirements for RLEC-provided broadband Internet access transmission services whether tariffed or offered on a de-tariffed basis. Forbearance is requested “until such time as the [FCC] reaches a decision on whether any and all broadband services (and not just RLEC-provided broadband Internet access transmission services) should be required to contribute to support of federal USF programs or completes some other form of contributions reform.”

First, NTCA and US Telecom explain that in the 2015 Open Internet Order, the FCC “found ‘limited forbearance’ from USF contributions obligations for broadband Internet access services pending comprehensive reform to be in the public interest.” They argue that the FCC should now extend forbearance to the one group of broadband providers that was left out of that decision – RLECs that did not elect model-based support. These RLECs were excluded at the time in an effort to maintain the status quo, pending a future opportunity for broader reform in the contributions docket. But, as pointed out in the petition, “no visible progress has been made toward...completing a process for comprehensive contributions reform,” and “actual resolution...seems to keep becoming ever more distant.”

Next, NTCA and US Telecom argue that subjecting a certain class of RLEC broadband providers and their subscribers to contributions while all other broadband providers are given a pass is anti-competitive. The requirements impose pricing pressure that makes it difficult for RLECs “to provide services at rates that are ‘reasonably comparable’ to those in urban areas where providers do not contribute to the viability and sustainability of USF programs.” NTCA and US Telecom estimate that “many RLEC consumers could see an immediate reduction of $7.18 – or much greater – on their monthly bills to the extent RLEC-provided broadband Internet access transmission services are no longer uniquely subject to a USF contributions obligation.”

NTCA and US Telecom also address the impracticality of the optional relief from contribution obligations provided by the FCC in the Rate-of-Return Reform Order. There, the FCC determined that if a “rate-of-return carrier chooses to detariff its wholesale consumer broadband-only loop offering, it no longer will be voluntarily offering the transmission as a service that is assessable for contributions purposes.”[7] However, as NTCA and US Telecom explain, the “mechanical operation” of the FCC’s current cost recovery rules prevent RLECs from taking advantage of this option. If an RLEC ceases to offer broadband transmission service on a common carrier basis, the RLEC would be electing to cease contributing on the associated revenues. But, “it would also be electing in effect to cease recovering those costs through regulated rates or pool settlements or to receive HCLS, ICLS, or CAF-BLS for the underlying costs of that transmission.”[8] Loss of support is not an option for RLECs.

What are the Practical Effects of the Petition?

First, some opposition to NTCA’s and US Telecom’s petition should be expected. If it is granted, there will be less USF-assessable revenue, which will cause the quarterly USF contribution factor to rise. By removing the revenues associated with broadband Internet access transmission services of RLECs that did not elect model support from the contribution base, NTCA and US Telecom estimate that the USF contribution factor for the third quarter of 2017 would increase from 17.1 to 17.3 percent. They further estimate that for a consumer purchasing $50 per month in telecommunications services, the requested forbearance would result in a universal service fee increase of roughly $0.10 per month, or $1.20 per year. Though NTCA and US Telecom explain that there would be cost savings for some. Because the USF assessment is a charge that gets passed through to consumers, the effect of removing the obligation would be a decrease in USF fees for certain rural consumers. Considering both outcomes, USF critics, of course, will focus on the increase to the USF contribution factor, and certainly will not be supportive of a request that will result in an increase in fees for some consumers.

Second, NTCA’s and US Telecom’s petition, even though it concerns only a discreet issue, renews the call for comprehensive USF contribution reform. The discriminatory treatment of RLEC broadband transmission services described in the petition is an uncomplicated example of why the USF contribution system is broken and needs to be fixed. It raises the question once again of why USF contribution obligations should apply unequally to similar services that utilize different technologies. Such arbitrary distinctions harm consumers and broadband providers, and negatively affect broadband deployment and adoption.

On a related note, rural broadband deployment is the subject of two separate congressional hearings on June 20 and June 22, both of which have scheduled representatives from NTCA as witnesses. The NTCA and US Telecom joint petition, as well as broader USF contribution reform issues will surely be discussed during both hearings.

[1] WC Docket No. 06-122 and WC Docket No.______, Petition of NTCA–The Rural Broadband Association and the United States Telecom Association for Targeted, Temporary Forbearance Pursuant to 47 U.S.C. § 160(c) from Application of Contributions Obligations on Broadband Internet Access Transmission Services Pending Universal Service Fund Comprehensive Contributions Reform (filed June 14, 2017) (Petition).

[2] 47 U.S.C. § 254(d).  The first sentence of 254(d) is the mandatory contribution obligation.

[3] See In re Universal Service Contribution Methodology, WC Docket No. 06-122, 21 FCC Rcd 7518 (2006), aff'd in part, vacated in part sub nom., Vonage Holdings Corp. v. FCC, 489 F.3d 1232 (D.C. Cir. 2007).

[4] 47 C.F.R. § 54.706. In 2012, the FCC determined that about 2,900 telecommunications providers contributed to the USF, roughly 3,100 providers that would otherwise be required to contribute qualified for the de minimis exemption, and nearly three-quarters of USF contributions came from the following five companies: AT&T Inc., CenturyLink, Inc., Sprint Nextel Corporation, T-Mobile USA, Inc., and Verizon Communications, Inc. Universal Service Contributions Methodology, WC Docket No. 06-122, A National Broadband Plan for our Future, GN Docket No. 09-51, Further Notice of Proposed Rulemaking, FCC 12-46, ¶9 (2012).

[5] Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, et al., CC Docket No. 02-33, et al., Report and Order and Notice of Proposed Rulemaking, FCC 05-150, 20 FCC Rcd 14853, ¶113 (2005).

[6] Protecting and Promoting the Open Internet, GN Docket No. 14-28, Report and Order on Remand, Declaratory Ruling, and Order, FCC 15-24, 30 FCC Rcd 5601, ¶488 (2015) (2015 Open Internet Order).

[7] Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order, Order and Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 16-33, 31 FCC Rcd 3087, ¶193, n. 428 (2016) (Rate-of-Return Reform Order).

[8] Petition at 10-11.

FCC Accepts 600 MHz Band License Applications

June 21, 2017 – The FCC has announced that the long-form applications of 15 winning bidders in the 600 MHz Incentive Auction have been found, upon initial review, to be acceptable for filing. Petitions to deny the applications must be filed no later than July 3, 2017, ten days after the date of the FCC’s Public Notice.  Oppositions to a petition to deny must be filed no later than July 11, 2017, five business days after the filing date for petitions to deny. A list of the applications sorted by licensee is available, along with a list of the applications sorted by market. The FCC’s initial review of long-form applications of other winning bidders is ongoing.  A subsequent notice will announce when they are accepted for filing.

FCC Grants 600 MHz Licenses to T-Mobile, AT&T, DISH, and Others

June 14, 2017 – The FCC has announced that it has granted 600 MHz licenses for 11 winning bidders in the Incentive Auction. The FCC initially accepted the winning bidders’ long-form applications on May 18, 2017. After completing further review, the FCC has determined the applications are “complete and in conformance with” the FCC’s rules, and there are no petitions to deny or other requests that prevent grant of the licenses. Additionally, the FCC has received full payment for the licenses, as required by Section 1.2109(a) of its rules. A list of the granted licenses is available sorted by licensee, along with a list sorted by market.

USF Contribution Factor for Third Quarter 2017: 17.1 Percent

June 13, 2017 – The FCC has announced that the proposed universal service fund contribution factor for the third quarter of 2017 is 17.1 percent. This is a slight decrease from the 17.4 percent contribution factor that was used in the second quarter of 2017. The contribution factor changes four times a year and is increased or decreased depending on the needs of the four universal service fund programs. The FCC has also announced that for the third quarter of 2017 the Universal Service Administrative Company (USAC) projects that it will collect $13.11 billion in total interstate and international end-user telecommunications revenues. USAC estimates that $1.896 billion will be needed to cover the total demand and expenses for all Federal universal service support mechanisms in the third quarter of 2017. If the FCC takes no action on the proposed USF contribution factor within 14 days, it will be declared approved. Historical information on quarterly universal service fund contribution factors is available online from the FCC.

Comments on Rate Floor NPRM Due July 10

June 8, 2017 – The FCC has published a Notice in the Federal Register, setting the deadlines for comments on the rate floor NPRM. Comments are due on or before July 10, 2017. Reply comments are due on or before July 24, 2017. In the rate floor NPRM, the FCC seeks comment on whether it should change the current rate floor methodology or eliminate the rate floor and its accompanying reporting obligation.

RUS Announces Broadband Loans to Deploy Fiber in Rural Areas

June 8, 2017 – The Department of Agriculture’s Rural Utilities Service has announced that is has extended four loans totaling $43.6 million to rural service providers. The funding will be used to add nearly 1,000 miles of fiber optic cable to broadband networks in rural America. Loans were made to the following four entities:

• Central Texas Telephone Cooperative, Inc. will receive a $24.8 million loan to deploy 568 miles of fiber optic cable and install equipment upgrades in seven of its 17 exchanges in rural Texas.
• Ducor Telephone Co. of California will receive a $9 million loan to construct 67 miles of fiber and update equipment to improve quality, functionality, and network reliability.
• Coon Valley Cooperative Telephone Association of Iowa will receive a $6.5 million loan to deploy 216 miles of fiber within its service area.
• Viola Home Telephone Co. of Illinois will receive a $3.3 million loan to deploy 104 miles of fiber and provide supporting equipment to deliver enhanced telecommunications services to its rural subscribers.

RUS uses its Telecommunications Infrastructure Loan Program to make long-term direct and guaranteed loans for the construction, improvement, and expansion of broadband capable facilities in rural areas.

Carrier Penalized for Failing to Contribute to USF/TRS/LNP, But Successfully Negotiates Reduced Forfeiture

June 8, 2017 – The FCC has imposed a penalty of $975,000 against Advanced Tel, Inc. (ATI) for failing to make contributions to the Universal Service Fund (USF), the Telecommunications Relay Service (TRS) Fund, and the cost recovery mechanism for local number portability (LNP). ATI is a California-based non-dominant interexchange carrier that provides interstate, international, and intrastate long-distance telecommunications services as a switchless reseller in 25 states. The FCC’s Enforcement Bureau began investigating ATI in 2008 after receiving a tip from USAC. After a lengthy investigation, the Bureau found that ATI failed to make contributions over a period of several years, and at one point, owed nearly $1.5 million in overdue contributions. ATI was originally assessed a forfeiture penalty of $1,588,988 in a 2015 Notice of Apparent Liability. In response, ATI asserted a number of statute of limitations arguments, and requested a downward adjustment of the penalty pursuant to Section 1.08 of the FCC’s rules based on its inability to pay the proposed forfeiture. The FCC reduced the forfeiture amount after considering the gross revenues of ATI and ATI’s parent company InterMetro Communications, Inc. The FCC did not address ATI’s statute of limitations arguments. It concluded they were mooted by the downward adjustment for ATI’s inability to pay, and further, the forfeiture calculation based on those arguments would have resulted in a greater forfeiture amount than the downward adjustment.

FCC Asks ILECs to Identify Census Blocks Where They Do Not Anticipate Being Able to Deploy Broadband Service Under the Existing Reasonable Request Standard

June 8, 2017 – The FCC has released a Public Notice requesting ILECs identify areas where they are not able to deploy broadband. In the 2016 Rate-of-Return Reform Order, the FCC encouraged carriers electing the voluntary path to the A-CAM cost model to identify any census blocks subject to the reasonable request standard where they expect not to extend broadband, so that such census blocks may be included in the CAF II auction. Similarly, rate-of-return carriers remaining on the reformed legacy support mechanisms are invited to identify those census blocks where they do not anticipate being able to deploy service under the existing reasonable request standard for inclusion in the auction. Carriers should submit a list of “unservable” census blocks including the state, carrier, and study area code to USAC via email to hcinfo@usac.org by July 7, 2017, and those census blocks will not be subject to the reasonable request standard.

NTCA Warns Against Use of Retrans to Force Carriage of ATSC 3.0 Signals

June 8, 2017 – In a February 2017 NPRM, the FCC proposed authorizing television broadcasters to begin voluntarily using the Advanced Television Systems Committee (ATSC) 3.0 transmission standard, while also continuing to deliver current-generation digital television broadcast service using the ATSC 1.0 standard. In reply comments filed in that proceeding, NTCA—The Rural Broadband Association cautioned that “ATSC 3.0 carriage must not be incorporated into the current retransmission consent process for small MVPDs.” NTCA warns that “[t]he retransmission consent process in its current form could be leveraged to compel...smaller firms to bear unknown costs and suffer other harms to accommodate carriage of ATSC 3.0 signals prematurely, notwithstanding the NPRM’s goal of voluntary experimentation on the part of broadcasters.” In addition to forced carriage, NTCA urged the FCC to consider the costs that small MVPDs, and ultimately their subscribers, may incur from accommodating new ATSC 3.0 signals while also maintaining existing ATSC 1.0 signals. Because a single station cannot transmit both an ATSC 1.0 signal and 3.0 signal simultaneously, NTCA contends that any station adopting ATSC 3.0 will need to either (1) find a host station to transmit their ATSC 3.0 signal and use their original station to continue to transmit the ATSC 1.0 signal, or (2) find an alternate host for their ATSC 1.0 simulcast stream while converting their original signal to ATSC 3.0. NTCA argues that moving an ATSC 1.0 host transmitter a significant distance – outside the existing community of license and DTV coverage area – could force an operator to purchase new equipment and would cause consumer disruption and confusion. Other comments can be accessed in GN Docket No. 16-142.

FCC Releases Updated Broadband Deployment Data

June 6, 2017 – The FCC’s Wireline Competition Bureau has released updated Form 477 data on fixed broadband deployment as of June 30, 2016. The data shows where providers offer fixed broadband services, including the type of technology used to offer the service and the maximum advertised download and upload speeds. Data is available at the census block level for individual states and nationwide. The updated data includes revisions made by FCC Form 477 filers before May 16, 2017. The FCC plans to release coverage area shapefiles showing mobile broadband network deployment as of June 30, 2016 at a later date.

Filing Deadline for ILEC Study Area Boundary Changes: June 30, 2017

June 5, 2017 – The FCC’s Wireline Competition Bureau has announced a June 30, 2017 filing deadline for the biennial recertification of study area boundary data. Incumbent local exchange carriers (ILECs) and state commissions that file study area boundary data on behalf ILECs operating within their jurisdictions must review and recertify study area boundary data every two years. The most recent previous recertification period ended on May 26, 2015. ILECs and state commissions that have uploaded and certified new boundaries between December 31, 2016 and March 15, 2017 are not required to recertify their data in 2017. All other ILECs and state commissions must recertify their information, following the process outlined in the June 5th Public Notice.

• Public Notice: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0605/DA-17-543A1.pdf
• Study Area Boundary Map Data: https://www.fcc.gov/maps/study-area-boundaries/

FCC June 22nd Open Meeting Focused on Public Safety Issues

June 1, 2017 – The FCC has announced the following tentative agenda for its June 22, 2017 open meeting:   

• Emergency Alert System Event Code for Blue Alerts – The FCC will consider a Notice of Proposed Rulemaking that would amend the Commission’s Emergency Alert System (EAS) rules to add a dedicated event code, “BLU,” for Blue Alerts, so that EAS alerts can deliver actionable information to the public when a law enforcement officer is killed, seriously injured, missing in connection with his or her official duties, or if there is an imminent and credible threat to a law enforcement officer.  (PS Docket No. 15-94)
• First Responder Network Authority – The FCC will consider a Report and Order that establishes the procedures and standards the Commission will use to review alternative plans submitted by states seeking to "opt-out" of the FirstNet network and to build their own Radio Access Networks that are interoperable with FirstNet.  (PS Docket No. 16-269)
• Exemption to Calling Number Identification Service – The FCC will consider a Notice of Proposed Rulemaking that would amend the Caller ID rules to allow disclosure of blocked Caller ID information to aid law enforcement in investigating threatening calls.  (CG Docket No. 91-281)
• OneWeb Market Access Request – The FCC will consider an Order and Declaratory Ruling that recommends granting OneWeb’s request to be permitted to access the U.S. market using its proposed global non-geostationary satellite constellation for the provision of broadband communications services in the U.S.  (IBFS SAT-LOI-20160428-0041)
• Improving Competitive Broadband Access to Multiple Tenant Environments – The FCC will consider a Notice of Inquiry that seeks comment on ways to facilitate greater consumer choice and enhance broadband deployment in multiple tenant environments such as apartment buildings, condominium buildings, shopping malls, or cooperatives. (GN Docket No. 17-142)
• Electronic Annual Notice Declaratory Ruling – The FCC will consider a Declaratory Ruling which would clarify that the “written information” that cable operators must provide to their subscribers via annual notices pursuant to Section 76.1602(b) of the FCC’s rules may be provided via e-mail.  (MB Docket No. 16-126)
• Modernization of Payphone Compensation Rules – The FCC will consider a Notice of Proposed Rulemaking and Order that (1) proposes to eliminate the requirement that carriers that complete payphone calls conduct an annual audit of their payphone call tracking systems and file an associated annual audit report with the Commission, and (2) waives the annual audit and associated reporting requirement for 2017.  (WC Docket Nos. 17- 141 and 16-132; CC Docket No. 96-128)
• Enforcement Bureau Action - The Commission will consider an enforcement action.

The June 22 open meeting is scheduled to commence at 10:30 a.m., and will be streamed live at www.fcc.gov/live.

LEC Coalition Presses FCC to Grant IntraMTA Petition

June 1, 2017 – A coalition of local exchange carriers met with representatives from the FCC to discuss its pending Petition for Declaratory Ruling. The LEC coalition urged the FCC to grant is petition, “including in particular the core proposition that interexchange carriers (“IXCs”) cannot avail themselves of tariffed access services and later seek refunds on the ground that they routed intraMTA wireless traffic using such services to LECs."

FCC Files Amicus Brief in Ninth Circuit Supporting FTC View of Common Carriers

May 31, 2017 – The FCC’s office of general counsel has filed an amicus curiae brief with the Ninth Circuit Court of Appeals, supporting the Federal Trade Commission (“FTC”) in FTC v. AT&T Mobility. In 2014, the FTC filed a suit against AT&T Mobility pursuant to Section 5 of the FTC Act alleging that AT&T failed to adequately inform customers with unlimited data plans of its data throttling program. In August of 2016, a three-judge panel of the Ninth Circuit ruled in favor of AT&T, finding that: (1) the common carrier exception in Section 5 of the FTC Act is a “status-based” exemption, and (2) that AT&T, as a common carrier, is not covered by Section 5. The FTC had argued that the exemption should be read as an activity-based exception. On May 9, 2017, the Ninth Circuit agreed to rehear the case en banc, vacating the three -judge panel’s decision. In its amicus brief, the FCC supports the FTC’s view that the common carrier exception is activity-based. The FCC argues that the FTC Act’s common carrier exception depends on and expressly cross-references the Communications Act. The FCC further explains that the Communications Act specifies that telecommunications providers may be treated as common carriers, and thereby subject to common carriage regulation by the FCC, only when they are engaged in common-carrier activities. Therefore, the FTC Act’s common carrier exception, which is expressly intertwined with the Communications Act, likewise is activity-based. En banc oral arguments are scheduled for September 2017.

FCC Commissioners Consider Means-Testing USF High-Cost Fund

May 31, 2017 – FCC Commissioners Michael O’Rielly and Mignon Clyburn have published an article on the FCC’s official blog that asks whether means-testing could bring efficiencies to the universal service high-cost fund. A means test is a determination of whether an individual is eligible for assistance, based upon whether the individual possesses the means (income and assets) to do without that assistance. In the U.S. for example, means testing is used to determine eligibility for Medicaid. Individuals with household incomes within a certain percentage of the poverty threshold qualify for the program. Similarly, the universal service Lifeline program employs means testing to determine whether an individual qualifies for a discount on monthly service.

In their blog post, O’Rielly and Clyburn state that they agree with existing views of some economists that the high-cost program is inefficient because “poor urban consumers pay significant telecommunications fees to subsidize affluent phone customers in Aspen, Colorado and Jackson Hole, Wyoming.” They further explain that:

[The USF] currently subsidize[s] access to communications for people who don’t need or deserve governmental assistance.  In other words, we should end the practice of spending scarce USF high-cost support to illogically subsidize the cost of communications services for very rich people who happen to live in the more rural portions of our nation.

Commissioners O’Rielly and Clyburn want to release a formal item “in the very near future” soliciting public comment on implementing means-testing for the high-cost fund. They have initially identified a number of issues:

• Would means-testing make the high-cost program more efficient (advantages and disadvantages)?  Given our limited budget, would it enable the Commission and/or providers to retarget USF funding to areas or consumers in greater need of support?
• Should the Commission require that consumers identified as having adjusted gross income (AGI) levels above a set threshold ($1 million or $500,000) to pay the full cost of providing service to their locations? How would consumers above the threshold be identified?
• Should the FCC utilize means-testing as a weighting factor in future reverse auctions or other distributions of USF support?
• Should the FCC exclude support for households in high-cost areas where the FCC determines that a service area has a substantially high percentage of households with income at or above the 95th percentile of national household income levels or an equivalent measurement?

Blog: Michael O’Rielly and Mignon Clyburn, Would Means-Testing Bring More Efficiencies to the High-Cost Program? (May 31, 2017), https://www.fcc.gov/news-events/blog/2017/05/31/would-means-testing-bring-more-efficiencies-high-cost-program.

FCC Grants Windstream Petition to Include Lost Halo Revenues

May 24, 2017 – The FCC’s Wireline Competition Bureau has granted, in part, Windstream Services, LLC’s petition seeking waiver of FCC intercarrier compensation recovery rules. The ruling will allow Windstream to include in its recovery calculations certain funds that it was unable to collect from Halo Wireless, Inc. Specifically, the waiver will allow Windstream to include in its calculations revenue associated with traffic eligible for compensation that was terminated during Fiscal Year 2011 and that otherwise meets the criteria spelled out in the FCC’s revenue recovery rules. The decision to grant Windstream’s waiver petition is consistent with prior FCC orders allowing other carriers to include unrecoverable Halo revenue in their ICC recovery calculations.

FCC Freezes Rate Floor Rule at $18, Asks Whether It Should Be Modified or Eliminated

May 19, 2017 – The Federal Communications Commission (“FCC”) has released an Order freezing the rate floor rule at $18.[1] An accompanying Notice of Proposed Rulemaking seeks comment on whether the FCC should make any changes to the current rate floor methodology or eliminate the rate floor rule and its accompanying reporting obligations entirely. The $18 freeze will remain in effect and prevent the increases that would otherwise take place on July 1, 2017, and July 1, 2018, unless or until the FCC takes further action on the rate floor rule. Comments in response to the NPRM are due on or before July 10, 2017. Reply comments are due on or before July 24, 2017.

The FCC’s Rate Floor Rule

The FCC adopted the rate floor rule in the 2011 USF/ICC Transformation Order. It penalizes incumbent local exchange carriers for offering residential local voice service at rates that are below a specified rate floor. To the extent a carrier’s end-user rates plus state regulated fees (state subscriber line charges, state universal service fees, and mandatory extended area service charges) are below the rate floor, the carrier will have its high-cost universal service support reduced. The reduction in support is calculated by multiplying the amount the local rate is below the floor by the number of the carrier’s supported lines.[2] For example, if a carrier receives support for 10,000 lines, and offers local service at a rate of $10, but the rate floor is $20, then the carrier will have its support reduced by $100,000. Support reductions are generally redistributed to other carriers. The rate floor rule applies to both rate-of-return carriers and price cap carriers.[3]

For the period July 1, 2012 through June 30, 2013 the rate floor was $10. It rose to $14 for the July 1, 2013 through June 30, 2014 timeframe. The rate floor was scheduled to increase to $20.46 on July 1, 2014 – an amount derived from an urban rates survey conducted by the Wireline Competition Bureau (the survey produced an average urban rate of $19.81, with state fees of $0.65, for a total of $20.46).[4] However, due to the extreme hike in the rate floor produced by the survey, the FCC adopted a new four-year transition for the rate floor rule in 2014.[5] Prior to the freeze adopted as part of the present Order and NPRM, the FCC’s rate floor rule was set to apply as follows:

• July 1, 2016 through June 30, 2017 – USF support reductions only for lines with rates that are below $18 or the rate floor established by the 2016 rate survey, whichever is lower.
• July 1, 2017 through June 30, 2018 – USF support reductions only for lines with rates that are below $20 or the rate floor established by the 2017 rate survey, whichever is lower.
• July 1, 2018 through June 30, 2019 – USF support reductions only for lines with rates that are below $22 or the rate floor established by the 2018 rate survey, whichever is lower.

Rate Floor Notice of Proposed Rulemaking

The FCC is seeking comment on whether it should change the current methodology used to set the annual rate floor or eliminate the rate floor and its accompanying reporting obligations. In other words, every possible course of action is on the table for debate. The main issues covered in the NPRM are summarized below.

• Should the FCC continue to use a single, national rate floor, or should the FCC adopt multiple rate floors (i.e., one for each state or region) based on data from more localized surveys? Should the FCC allow carriers to charge a rate that is one standard deviation below the average urban rate? Requiring carriers to meet a single national rate ignores the variability in incomes across the nation. Average incomes in rural areas are often much lower than income levels in large urban areas. What is considered affordable in one place may not be considered affordable in other places.
• How does the FCC’s rate floor rule affect state ratemaking and state universal service funds? For many carriers, state statutes determine the amount that must be charged for local voice service. Further, in order to raise rates, carriers often have to initiate a rate case before their state commissions. Even when state commissions open proceedings to raise the rates of all local carriers, the process is lengthy and burdensome.
• Is the rate floor rule meeting its intended purpose? The FCC adopted the rate floor rule after concluding it is inappropriate to provide high-cost support to subsidize service at local rates that are significantly lower than the national urban average. However, as many have argued, the FCC’s rate floor rule has resulted in a higher monthly rate for many rural Americans. The rule has made basic voice service in many rural areas less affordable.
• Has the rate floor redistribution of support been beneficial to other carriers? Funding reductions resulting from carriers’ inability to meet the rate floor are generally redistributed to other carriers to mitigate the impact of the FCC’s budget control mechanism. Based on recent rate-of-return data, the FCC estimates that the rate floor effectively reduced total high-cost loop support (“HCLS”) by 1.3 percent, and effectively increased Connect America Fund-Broadband Loop Support (“CAF-BLS”) by 0.9 percent.
• What steps can be taken to reduce the ongoing administrative and compliance costs associated with the rate floor rule? Would a biennial or triennial increase in the rate floor reduce burdens? Every year, FCC staff must collect data to calculate a new rate floor, and review data submitted by carriers to determine compliance with the rule. Carriers must submit data on their rates, and if necessary, must submit data to their state commission to raise local rates to meet the applicable rate floor. The rate floor rule also imposes burdens on National Exchange Carrier Association (“NECA”), the Universal Service Administrative Company (“USAC”), state commissions, and other entities.

[1] Connect America Fund, WC Docket No. 10-90, Notice of Proposed Rulemaking and Order, FCC 17-61 (rel. May 19, 2017).

[2] Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed Rulemaking, FCC 11-161, ¶235 (Nov. 18, 2011), aff’d, 753 F.3d 1015 (10th Cir. 2014) (USF/ICC Transformation Order). There are no reductions in high-cost support for lines provided to customers enrolled in the Lifeline program.

[3] See 47 C.F.R 54.318(c).

[4] See Wireline Competition Bureau Announces Results of Urban Rate Survey for Voice Services; Seeks Comment on Petition for Extension of Time to Comply with New Rate Floor, WC Docket No. 10-90, Public Notice, DA 14-384 (2014).

[5] Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order, Declaratory Ruling, Order, Memorandum Opinion and Order, Seventh Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 14-54 (2014).

FCC Announces Applications For 600 MHz Band Licenses Accepted

May 18, 2017 – The FCC’s Incentive Auction Task Force has announced that certain long-form applications (FCC Form 601) for 600 MHz licenses of 11 winning bidders in Auction 10002 have been initially accepted for filing. The FCC has released a list of accepted applications sorted by licensee, as well as a list of accepted applications by market. An initially accepted application may be returned or dismissed if it is found, upon further review, to be defective or not in conformance with the FCC’s rules. Initial review of long-form applications of other Incentive Auction winning bidders is ongoing. Subsequent Public Notices will announce when they have been initially accepted for filing.

FCC Modifies Rules Limiting Recovery of Broadband Project Costs

April 21, 2017 – The Federal Communications Commission (“FCC”) has adopted an Order on Reconsideration that modifies the construction allowance adjustment rules that limit a carrier’s ability to recover costs related to new construction projects where the average per-location costs exceed a certain amount.[1] The modification is effective June 19, 2017.

Capital Budget Allowance and Construction Allowance Adjustment

In the Rate-of-Return Reform Order, the FCC adopted a mechanism to limit the extent to which carriers may use universal service fund (“USF”) support to recover future capital investments.[2] This capital expenditure limitation, referred to as the “Capital Expenditure Allowance” or “Capital Budget Allowance,” is intended to ensure USF support is used “as efficiently as possible,” and “help target support” to areas with limited broadband deployment. It acts as a limitation on a carrier’s annual budget for universal service-eligible investment, and affects both high-cost loop support (“HCLS”), which supports the intrastate portion of the exchange loop, and Connect America Fund Broadband Loop Support (“CAF BLS”), which supports loops associated with the provision of stand-alone broadband service.

In addition to the Capital Budget Allowance, the FCC adopted a limitation on the recovery of costs related to new construction projects in certain circumstances. Specifically, the construction allowance adjustment, also referred to as the capital construction limitation, precludes a rate-of-return carrier from seeking universal service support for all capital expenses associated with any new construction project where the average per-location costs exceed a company-specific maximum amount. For example, if a carrier subject to a $10,000 average per-location limitation developed a new project costing $105,000 to serve 10 locations – resulting in an average cost per-location served of $10,500 – the cost of the entire project would be disallowed.

NTCA Petition for Reconsideration

In May of 2016, NTCA—The Rural Broadband Association filed a petition seeking reconsideration of, among other things, the capital construction limitation. NTCA argues that the rules will cause carriers to remove extremely high-cost locations from new broadband projects in order to bring the total construction costs below the maximum. Once a location is excluded, NTCA argues, it may never receive broadband because there may not be a subsequent project that deploys service to the location as efficiently as the first project. To prevent locations from being permanently stranded without broadband, NTCA suggests that the capital construction limitation should disallow “only the portion of a project’s expenses that exceed the average per-location threshold.” Using the example above, rather than disallowing recovery for the entire project, under NTCA’s proposal, the carrier would report $100,000 – $10,000 per location – for universal service support purposes and exclude $5,000 (the amount in excess of $10,000 per location).

FCC Order Modifying Capital Construction Limitation

Upon reconsideration, the FCC has modified its application of the capital construction limitation in accordance with NTCA’s proposed change. The FCC agrees with NTCA’s argument, that “wholly disallowing costs associated with projects exceeding the construction limitation could have the effect of preventing deployment to some locations that a carrier might otherwise choose to serve.” The FCC believes NTCA’s solution adequately preserves two critical interests: (1) promoting efficient use of universal service funds to maximize the number of high-cost locations with broadband-capable facilities; and (2) enabling some locations to be efficiently included within a broadband deployment project when they might otherwise be denied service altogether. The modification to the capital construction limitation rule is effective June 19, 2017.

[1] Connect America Fund, WC Docket No. 10-90; ETC Annual Reports and Certifications, WC Docket No. 14-58; Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Order on Reconsideration, FCC 17-36 (rel. Apr. 21, 2017).

[2] See Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order, Order and Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 16-33, ¶¶105-115 (2016) (Rate-of-Return Reform Order).

YouTube Launches New YouTube TV Subscription Service

April 5, 2017 – YouTube has announced the launch of a new $35 per month streaming video service called YouTube TV in New York, Los Angeles, San Francisco, Chicago and Philadelphia. The subscription service will be made available in more US cities this year. A subscription to YouTube TV will give users access to live shows from the four major broadcast networks – Disney (ABC), NBCUniversal, CBS, and Fox. Users will also have content from over 40 cable channels, including live sports events from ESPN and Fox Sports 1. Other channels in the YouTube TV bundle include AMC, Comcast SportsNet, FX, USA Network, Disney Channel, Bravo, MSNBC, and Fox News. Showtime and Fox Soccer Plus can be added for an additional monthly charge.

FCC Waives CAF BLS Cost Surrogate Method in Certain Circumstances

March 20, 2017 – On its own motion, the FCC’s Wireline Competition Bureau has temporarily waived the requirements to use the “cost surrogate method” contained in Sections 69.311 and 69.416 of the FCC’s rules. The waiver is intended to help rate-of-return carriers avoid distortive pricing effects that result from the application of the surrogate cost method in certain circumstances.

Background – In the March 2016 Rate-of-Return Reform Order, the FCC created the Connect America Fund Broadband Loop Support (“CAF BLS”) mechanism to provide USF support to rate-of-return ILECs for costs associated with stand-alone broadband service. Creation of the CAF BLS mechanism required the FCC to revise certain cost allocation and tariffing requirements. The FCC created a new Consumer Broadband-Only Loop (“CBOL”) category, and required carriers to move broadband-only loop costs from the special access category to the CBOL category. To determine the costs of a broadband-only loop, the FCC decided to use common line costs as a surrogate.[1]

For purposes of deriving the amount of consumer broadband loop expenses to be removed from the special access category, rate-of-return ILECs are required to calculate common line investment and expenses using an interstate allocation of 100, rather than 25. Common line expenses are then divided by the total number of voice and voice/data lines producing an interstate common line expense per line, which is multiplied by the number of consumer broadband-only loops to derive the consumer broadband-only loop expenses to be removed from the special access category.[2]

2016 Surrogate Method Waiver – The FCC first waived the cost surrogate rules in a December 2016 Order, after finding that, in certain situations, the methodology over-allocates costs out of the special access category to the new CBOL category. In these cases, the method reduces special access rates more than intended, and increases the CBOL revenue requirement. In the worst-case scenario, the costs being shifted reduces the special access revenue requirement to zero. The FCC determined a waiver was appropriate, concluding that “[u]se of the surrogate cost methodology in a way that significantly affects non-Digital Subscriber Line (DSL) special access rates would be inconsistent with the public interest because it would introduce distortive pricing effects unrelated to the provisioning of broadband services and would be inconsistent with the goal of just and reasonable rates and rate stability over time.” The waiver covered the December 2016 tariff filings.

2017 Surrogate Method Waiver – The FCC has again granted a waiver of the cost surrogate method for the 2017 annual access charge tariff filing for rate-of-return carriers. The waiver will apply in circumstances in which subtraction of surrogate CBOL costs from a carrier’s special access category would result in the need to reduce special access rates other than broadband transmission rates associated with provision of retail broadband Internet access service. In such cases, the carrier will have the option to limit the costs subtracted from the special access category to the amount only affecting those broadband transmission rates, pending further consideration of the surrogate cost rules.

[1] “Today, the facilities associated with the common line and the consumer broadband loop run between the end-user premises and the central office, and are often the same technology or share some common transmission capacity. Thus, it is reasonable to conclude that the costs associated with these two types of lines are very similar.” Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order, Order and Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 16-33, 31 FCC Rcd. 3087 (2016) (Rate-of-Return Reform Order).

[2] The method segregates broadband-only loop investment and expenses from other costs included in the special access category – those related to business services, such as DS1 and DS3 other wide-band services, and the costs for DSL service that could be tariffed.

Form 477 Broadband Deployment Data Released

March 3, 2017 – The FCC’s Wireline Competition Bureau has released data on fixed broadband deployment as of June 30, 2016. The data was collected through FCC Form 477 filings, and includes revisions to those filing made before February 10, 2017. Coverage area shapefiles showing mobile broadband network deployment as of June 30, 2016 will be made available at a later date. Additional information is available on the FCC’s Broadband Deployment Data – FCC Form 477 webpage.

FCC Extends HUBB Portal Filing Deadlines

February 24, 2017 – The FCC’s Wireline Competition Bureau has granted, with slight modifications, petitions filed by NTCA–The Rural Broadband Association and WTA–Advocates for Rural Broadband, seeking a short term waiver of the March 1, 2017 deadline for certain Connect America Fund (CAF) recipients to report their first set of geo-located broadband information and related certifications through the High Cost Universal Service Broadband (HUBB) Portal. The FCC waives, until July 1, 2017, or two weeks after announcement in the Federal Register of PRA approval (whichever is later), the obligation of CAF Phase II recipients to file in the HUBB portal broadband information regarding locations deployed in 2016. The FCC also waives, until March 1, 2018, the obligation of CAF-BLS recipients to file, in the HUBB portal, or two weeks after announcement in the Federal Register of PRA approval (whichever is later), broadband information regarding locations deployed from May 25, 2016, to December 31, 2016.

The waiver order also provides further clarification regarding the obligation of Connect America Fund-Alternative Connect America Model (CAF-ACAM) recipients to file “pre-existing” broadband information. CAF-ACAM recipients have until March 1, 2019 to submit “pre-existing” qualifying locations to the HUBB portal. Pursuant to the Rate-of-Return Reform Order, CAF-ACAM carriers’ “pre-existing” locations are all locations deployed in 2016 and earlier, not all locations deployed in 2015 and earlier.

FCC Announces Rate Floor & Comparability Bench Marks

February 14, 2017 – The FCC’s Wireline Competition Bureau has announced the 2017 rate floor for incumbent eligible telecommunications carriers and reasonable comparability benchmarks for fixed voice and broadband services. Based on the survey results, the rate floor for voice services is $22.49, and the reasonable comparability benchmark for voice services is $49.51. The reasonable comparability broadband benchmark varies, depending upon the supported service’s download and upload bandwidths and usage allowance. For broadband service with speeds of 10 Mbps for downloads and 1 Mbps for uploads and a monthly usage allowance of 100 GB, the benchmark is $76.47. Information on the benchmarks for other broadband service offerings is available in the FCC’s Public Notice.

FCC Authorizes A-CAM Support for 182 Rate-Of-Return Companies

January 24, 2017 – The FCC’s Wireline Competition Bureau has authorized Alternative Connect America Cost Model (A-CAM) support for 182 rate-of-return companies that elected 217 revised offers. A total of 207 rate-of-return carriers in 43 states have been authorized to receive A-CAM support. An accompanying report shows the state-level amounts of A-CAM support for all 207 carriers, along with associated deployment obligations, and census blocks eligible for model-based support. The total amount of legacy high-cost support, exclusive of CAF-ICC support, received in 2015 by all of carriers accepting A-CAM support was $328,837,694. The total amount of A-CAM support and transition payments that these carriers will receive over the course of the A-CAM’s 10-year term is $5,283,553,352, for an average of $528,355,335 per year. Therefore, for these 207 A-CAM carriers, the net increase in annualized support compared to their legacy 2015 amount is $199,517,641. The Bureau’s Public Notice contains guidance on tariffing requirements and other obligations for those carriers moving to the A-CAM.

2017

FCC Makes New A-CAM Offers, Authorizes A-CAM Support for 35 Carriers

December 20, 2016 – The FCC’s Wireline Competition Bureau (Bureau) has announced 228 revised offers of Alternative Connect America Cost Model (A-CAM) support and revised deployment obligations for 191 rate-of-return companies that elected to move to the A-CAM. Revised support amounts are based on the FCC’s decision to allocate an additional $50 million annually to the A-CAM budget. These carriers have until January 19, 2017 to notify the Bureau, on a state-by-state basis, whether they elect to receive the revised amount of model-based support. A report showing revised state-level offers of A-CAM support and revised deployment obligations for each carrier is available for download here.

Additionally, the Bureau has authorized 35 rate-of-return companies that elected 45 offers of support to receive A-CAM funding pursuant to their initial election letters. For these “glide path” carriers, the offer of A-CAM support was less than the legacy support they received in 2015. Because of this, the FCC locked these carriers into their original offers of A-CAM support, the $200 per location funding cap, and the associated deployment obligations.

Additional $50 Million Allocated to Annual A-CAM Budget

December 20, 2016 – The FCC has released a Report and Order that allocates an additional $50 million annually to the budget for the Alternative Connect America Cost Model (A-CAM) using funds from the high-cost reserve account. By adding an additional $50 million to the A-CAM, an estimated 405,379 locations that lack 10/1 Mbps broadband service today will receive 10/1 Mbps or better service. Without the additional funding, A-CAM recipients would only be obligated to newly extend 10/1 Mbps or better service to 367,812 locations. The additional $50 million brings the A-CAM budget to $200 million annually, or $2 billion over the model’s 10-year term.

However, because additional funding by itself does not adequately address the overwhelming demand for the A-CAM, the FCC has implemented new control measures. First, the FCC has directed the Wireline Competition Bureau to reduce the funding cap to $146.10 per location. Next, the Bureau will reduce A-CAM support offers by varying percentages based on the percentage of locations lacking 10/1 Mbps. Carriers with lower current deployment will be offered a higher percentage of the adjusted A-CAM offer amount, which will target funding towards companies that have deployed 10/1 Mbps broadband service to a lower percentage of locations in eligible high-cost census blocks. This will result in a unique per-location funding cap for each carrier based on the cost characteristics of its service area, giving lower cost service areas lower funding caps than higher cost service areas. Based on these constraints, the FCC’s Wireline Competition Bureau will make revised offers of A-CAM support and revised deployment obligations. The second offer of A-CAM support, however, is conditioned upon the requirement that carriers accepting a revised offer agree to meet the terms of their original A-CAM offer if the FCC later decides to fund original offers.

The FCC also has released an accompanying Further Notice of Proposed Rulemaking that seeks comment on whether the FCC should allocate additional high-cost funding to the A-CAM. Specifically, the FCC requests comment on further increasing the A-CAM budget to provide the full amount of the original offer for some or all carriers that accept the second offer of model-based support. Alternatively, the FCC asks whether the budget should be increased by a lesser amount. Comments are due 30 days after the FNPRM is published in the Federal Register. Reply comments are due 45 days after Federal Register publication.

FCC Issues Guidance for Reporting Geo-Location Broadband Deployment

December 8, 2016 – The FCC’s Wireline Competition Bureau has released a Public Notice that contains extensive guidance for Connect America Fund recipients regarding their obligation to report geo-located broadband deployment information and make service milestone certifications. The Universal Service Administrative Company (USAC) has nearly completed the first version of an online portal that will accept geo-located broadband information and related certifications. Carriers must begin filing information with USAC’s High Cost Universal Service Broadband portal or “HUBB” in 2017.

216 Rate-of-Return Carriers Elect Model-Based Support

November 2, 2016 – The FCC’s Wireline Competition Bureau has announced that 216 rate-of-return companies submitted letters electing 274 separate offers of Alternative Connect America Cost Model (A-CAM) support in 43 states. Total model-based support and transition payments for these electing carriers, however, exceeds the A-CAM’s overall 10-year budget by more than $160 million annually. The FCC previously indicated that if A-CAM demand exceeds the funding allocated to the model, it will consider making an additional allocation of up to $50 million annually, and it will consider other measures such as prioritizing electing carriers. Accordingly, interested parties may submit ex parte letters, no later than November 14, 2016, discussing what actions the FCC should take to address the high level of interest in A-CAM model-based support.

*Disclaimer* – This blog is intended to inform the reader of recent developments related to communications law. It is not, and should not be considered as specific legal advice.