All in USF
In a speech before the American Enterprise Institute on April 19, 2018, Federal Communications Commission Commissioner Michael O’Rielly offered a new approach to funding universal service fund programs. Commissioner O’Rielly believes “it is time to institute the practice that any further increases in one program must be paired with offsets from another.”
The Federal Communications Commission has issued an Order and Declaratory Ruling which grants a request by FairPoint Communications, Inc. to correct its Eligible Recovery retroactive to January 1, 2015 and restore Local Switching Support amounts for its rate-of-return affiliates.
The FCC has released a draft of a Notice of Proposed Rulemaking that seeks comment on a rule prohibiting the use of universal service fund support to purchase equipment or services from any communications equipment or service providers identified as posing a national security risk to U.S. communications networks or the communications supply chain. The proposed rule would apply prospectively, and extend to upgrades of existing equipment or services. Comment deadlines will be announced after the NPRM is formally adopted.
The Federal Communications Commission has released a Report and Order, Third Order on Reconsideration, and Notice of Proposed Rulemaking that continue its efforts to reform the high-cost universal service fund rules that apply to rate-of-return incumbent local exchange carriers. In the Third Order on Reconsideration, the FCC, among other things, revises the formula for calculating a rate-of-return carrier’s operations expense limitation to include an inflationary factor, and makes a revision to its rules to include broadband-only loops when calculating a rate-of-return carrier’s corporate operations expense limitation.
The Federal Communications Commission has released a Report and Order, Third Order on Reconsideration, and Notice of Proposed Rulemaking that continue the FCC’s efforts to reform the high-cost universal service fund support mechanism rules that apply to rate-of-return carriers. In the Third Order on Reconsideration, the FCC has taken action to mitigate the negative effects of the budget control mechanism by fully funding legacy carrier support claims for the July 2017 – June 2018 time period.
The FCC has released a Report and Order, Third Order on Reconsideration, and Notice of Proposed Rulemaking that continue the FCC’s efforts to reform the high-cost universal service fund support mechanism rules that apply to rate-of-return carriers. The Report and Order contains new rules explicitly prohibiting the use of federal high-cost support for expenses that are not used for the provision, maintenance, and upgrading of facilities and services for which support is intended.
The Federal Communications Commission has released a Report and Order, Third Order on Reconsideration, and Notice of Proposed Rulemaking that continue the FCC’s efforts to reform the high-cost universal service fund support mechanism rules that apply to rate-of-return carriers. In the Report and Order, the FCC has decided to increase funding for the Alternative Connect America Cost Model, so that all locations with costs above $52.50 per location will be funded up to a per-location cap of $146.10.
A recent news release announced that Federal Communications Commission Chairman Ajit Pai has circulated an Order related to the high-cost universal service support mechanism that will “put in place strong new rules to prevent abuse of the high-cost program.”
According to a recent news release, Federal Communications Commission Chairman Ajit Pai has circulated an Order that will allocate over $500 million to promote rural broadband deployment. While the news release offers only general information on a few aspects of the item, presumably the FCC will use broadband reserve funds to address the current shortfall in high-cost universal service fund support.
Over the last few weeks, various rate-of-return incumbent local exchange carriers that voluntarily transitioned to model-based universal service fund support have submitted ex parte letters urging the Federal Communications Commission to allocate additional funding from the high-cost reserves to the Alternative Connect America Cost Model. Specifically, A-CAM carriers want the FCC to fully fund the model – $200 of support per month, per location. The recent burst of advocacy is due to the FCC’s quickly approaching self-imposed December 31, 2017 deadline for deciding whether to increase total annual A-CAM support. However, A-CAM companies are not the only ones staking a claim to the reserve funds. Rate-of-return carriers operating under revised cost-based USF rules are in desperate need of additional funding to address the negative impact of the FCC’s high-cost budget. The FCC faces a difficult decision because there is a limited amount of high-cost reserve funds available for use, and allocating reserve funds to either group of carriers will result in increased broadband buildout in rural areas.
