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Senate Commerce, Science & Transportation Committee Reviewed Universal Service Reform

WASHINGTON, June 25, 2010 – Universal Service reform is one of the key components of the National Broadband Plan and a principal which many in the telecommunications industry believe needs to happen before the current system collapses. On Thursday, the Senate Committee on Commerce, Science & Transportation held hearings to determine the state of the Universal Service Fund and to hear testimony to determine what should be done to reform it. While the hearing was titled “Universal Service: Transforming the High-Cost Fund for the Broadband Era” many of the Republican Senators spent a majority of their questions on reclassification not on universal service.

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WASHINGTON, June 25, 2010 –Universal Service reform is one of the key components of the National Broadband Plan and a principal which many in the telecommunications industry believe needs to happen before the current system collapses.

On Thursday, the Senate Committee on Commerce, Science & Transportation held hearings to determine the state of the Universal Service Fund and to hear testimony to determine what should be done to reform it. While the hearing was titled “Universal Service: Transforming the High-Cost Fund for the Broadband Era” many of the Republican Senators spent a majority of their questions on reclassification not on universal service.

The National Broadband Plan aims to reform the Universal Service Fund by deconstructing it into two separate funds. The first fund would be the Connect America Fund which would replace the High Cost Fund; it would provide access to rural areas where no business case exists for corporate investment.

Additionally in comparison to the current High Cost Fund the CAF would only fund a single entity per geographic area which would limit costs. The second fund would help support the expansion of mobile broadband via the expansion of 3G and then 4G; this fund is called the Mobility Fund.

USF reform is one of the few topics where the majority of the FCC agree on and want to action upon quickly. Many of the democrats on the Senate Committee also seemed in agreement that reform is necessary. Senator Byron Dorgan (D-ND) compared the expansion of broadband to electricity and the highway system, something which the government must support due to its high cost and ability to transform society.

Dorgan also stated that he felt that the 1996 Communications Act gave the FCC the authority to transform the USF from telephone support to broadband. Senator David Vitter (R-LA) agreed that USF need to provide rural America the same level of connectivity as the rest of the country but emphasized the need to do so with a limited amount of regulation.

Senator John Kerry was unable to attend the hearing but released the following statement “The program must evolve to reflect an evolving level of telecommunications services in the market.

And through reform, we must make sure the billions we spend to execute on that mission are spent effectively and efficiently and focused on increasing the number of Americans who receive and connect to our broadband network rather than on the size of the companies that receive the subsidy.”

The first witness panel consisted of Federal Communications Commissioners Michael Copps, Mingnon Clyburn and Meredith Atwell Baker.

Commissioner Copps lead off the witness testimony calling for large scale reform. He then gave a short history of how the nation even in its early colonial days provided for necessary infrastructure.  “So those generations built roads and bridges, turnpikes and canals, regional and then transcontinental railroads, an interstate highway system, nationwide electricity grids and nearly universal plain old telephone service.  They did this, more often than not, by working together—private enterprise in the lead, to be sure, but encouraged by visionary public policy.”

Copps then advocated the need for universal broadband access as not only a source of  economic empowerment but also as a social necessity. “America’s future town square will be paved with broadband bricks.  Sustaining small “d” democracy by effectively informing all of our citizens in the Digital Age goes to the core of what we are trying to achieve in the National Broadband Plan”

When asked if expansion should be left to the market; Copps reaffirmed his belief that the market cannot bring broadband to all of America and the government must help.

Commissioner Clyburn then reiterated the statements made by Copps for the need for government support. She then went onto underline the problems americans who don’t have access face. “Children cannot use high-speed Internet to complete their homework, enhance their educational opportunities through distance learning, or apply for college online.  Parents cannot apply for jobs that require online applications, and they cannot access many other services and critical information that is only available online.”

Commissioner Baker also agreed with her colleagues on the need for reform but warned that the USF does not have an unlimited source of funds. In fact due to the increasing number of consumers getting VOIP services they are not contributing to the USF.

She then went onto rearticulate her position that any action must be done with “a light-touch regulatory approach”.

When the commissioners were asked by Senator Dorgan if potential reclassification would hurt infrastructure investment Commissioners Copps and Clyburn felt it would not.

Clyburn stated that she had met with investors from UBS, Goldman Sachs and Meryl Lynch who said that it would provide them with increased security. Commissioner Baker however disagreed and claimed that investors told her that reclassification would bring about “too much regulation”.

The second witness panel consisted of industry professionals and was composed of Jeff Gardner, CEO Windstream Communications; Delbert Wilson General Manager, Hill Country Telephone Co-op; John Gockley VP Legal and Regulatory Affairs at US Cellular, Paul Waits President of Ritter Communications and Keyle McSlarrow CEO of the National Cable and Telecommunications Association.

Jeff Gardner CEO of Windstream a firm which provides service to a majority of rural America agreed that USF needs to focus on areas where no economic case exists for corporate investment. He also urged that USF reform include a simpler mechanism for obtaining support so that smaller firms are able to participate.

Delbert Wilson who was representing the Western Telecommunications Alliance, Organization for the Promotion and Advancement of Small Telecommunications Companies and Organization for the Promotion and Advancement of Small Telecommunications Companies also believed that USF was crucial for the expansion for broadband to rural America but does not feel that rural America should have to make do with the slower speeds which the NBP proposes.

He felt that the plan “Discriminate[s] against rural consumers, by proposing to fund rural networks at speed standards that will render them obsolete almost as soon as they are built”.

John Gockley from US Cellular espoused the benefits of maintaining technological neutrality in the funding to allow for wireless to be on equal footing with wireline. Since wireless technologies are able to connect the most remote areas with the lowest cost they should be considered as an equal option.

Paul Waits from Ritter Communications urged the panel to proceed slowly and to take on responsible reform which can be sustained. Waits also stated that the base of contribution to the USF needs to be expanded. “The solution must include restoring the contribution base for the USF fee to effectively support the original intent of what constitutes universal service, must include all telecommunications service in its revenue base for collections, and be neutral to changes in technology.  The amount that individuals pay on their telephone bill to support universal service is simply too high and unsustainable.”

Commissioner Copps while not present during the testimony of Mr. Waits made a similar comment when asked about the long term sustainability of the USF. Copps said that broadband services may have to be taxed in the same way that telephone services are to provide proper funding.

Kyle McSlarrow from National Cable and Telecommunications Association provided the final statement in which he supported reform and agreed that technological neutrality ensured competition. He also wanted to ensure that waste is cut from the program.

Many of the Republican Senators felt that the FCC did not have the full authority to conduct an overhaul of USF and that the FCC should ask Congress for a new mandate.

FCC

FCC Encouraged to Limit Data Collection on Affordable Connectivity Program, Others Want More

One trade group warns about providers leaving the program if data collection too onerous.

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Photo of Jonathan Spalter, CEO of US Telecom, from ISE

WASHINGTON, August 9, 2022 – The Federal Communications Commission is being warned not to overly burden internet service providers with its Congress-mandated order to collect pricing and subscription rates data from participants in the Affordable Connectivity Program.

Under the Infrastructure, Investment and Jobs Act, the FCC is required by November 15 to adopt rules to collect annual data relating to the price and subscription rates of each internet service offering by a provider participating in the broadband subsidy program, which offers up to $30 per month for low-income households (up to $75 per month on tribal lands) and a one-time $100 off a device.

But a number of submissions are warning the FCC against rules that require any additional data collection efforts beyond the scope of the law so as not to unduly burden providers and, at least one other trade group said, push providers away from participating in the program.

Telecommunications company Lumen, for example, recommended the commission limit the scope of the annual reporting to monthly pricing and to exempt “excessively granular” requirements, such as promotional rates, grandfathered plans, or subscriber-level data, which the commission is proposing to collect.

Communications companies and industry groups want to limit data collection

T-Mobile said in its submission that Congress told the FCC to rely on the broadband consumer labels, which are due this November, for pricing. The commission asked for comment on the interpretation of the IIJA requiring a reliance on price information displayed on the consumer labels.

For subscription information, T-Mobile urges the commission to look at data collection from the Universal Service Administrative Company – which administers high-cost broadband programs for the Universal Service Fund – to avoid “adopting a largely redundant collection that would impose additional burdens” on all parties.

“The IIJA leaves the Commission no discretion to collect any additional price information, and the statute does not require collection of data on other service plan and network characteristics,” such as speed and latency and data allowances, the submission said.

“Collection of this additional data would create additional burdens and is unnecessary,” the submission added.

Similar limitations were also proposed by telecom Starry Inc., which pushed for privacy protection by collecting data at a higher level (such as the state) and working with information collected in other transparency efforts, such as the consumer labels.

Industry association IMCOMPAS, which represents internet and competitive communications networks, told the FCC in a submission that data collection should be limited to the state level to protect consumer privacy and proprietary information of the providers; streamline other data collection, including the consumer labels; and provide instruction on how to providers to better understand the data collection rules.

Concurring with this position is the Wireless Internet Service Providers Association, which said data collection must be simple and should not go to a level of detail that goes beyond what the IIJA calls for. The trade group, which represents small providers, said such data collection beyond that required in the law could burden companies with small teams.

The included data, WISPA said, should be an annual aggregate of items including broadband plans subscribed to by ACP customers, number of subscribers for each plan, and pricing minus promotional rates, taxes, discounts or pricing breakdowns for bundled services. Any additional onerous collection could see providers leave the program, it added.

Industry groups US Telecom and NCTA – Internet and Television Association similarly urged a simple annual report that captured undiscounted monthly pricing of each broadband service offering and the number of customers subscribed. The Competitive Carriers Association and the Cellular Telecommunications and Internet Association also recommended a limited data collection approach.

ACA Connects, a trade group representing small and medium-sized independent operators, said the FCC should direct providers to report numbers of ACP households “that are applying their benefit to each speed tier along with the standard price of each tier on a state-by-state basis” – rather than the FCC-proposed continuous collection of subscriber-level data via the National Lifeline Accountability Database, it said, adding the commission should be mindful of the time it takes for completion, as smaller providers have limited resources.

Others pushing for subscriber-level, more data

The cities of New York and Seattle, in their submissions, said the FCC should collect subscriber-level information to assess different service adoption rates on different plans over time – publishing categories based on price, plan and performance by the zip code. It added it is not seeking information about the households itself, and said this would not be a privacy concern as others have pointed out.

Similarly, the Connecticut Office of State Broadband said the commission should go beyond the IIJA requirements by mandating information including performance of the plans and whether a device is offered.

For the National Digital Inclusion Alliance, data collection on the ACP should include data beyond what’s included in the consumer labels, and should include other items such as installation, equipment, service, miscellaneous, data and usage fees, and state and local taxes.

In a joint submission, non-profit media group Common Sense and internet advocacy group Public Knowledge recommended data collection that is necessary to monitor the ACP, which include promotional rates, taxes, overage costs and device and equipment costs. This way, they say, the FCC can get a better idea of how much is going toward internet access after applying the subsidy. They are also asking for the commission to collect information on whether the subsidy is being used to upgrade or discount current service, and how customers are becoming aware of the program.

The commission is currently trying to get more Americans on the program, which has over 13 million households signed up. That number, the commission said last week, should be much higher. As such, it ordered the development of an outreach program to market the subsidy.

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FCC

Former Commissioners Commend FCC in Absence of Fifth Commissioner

But there’s concern a Senate vote on a fifth FCC commissioner will not happen before midterms.

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Screenshot of Former FCC Chairman Richard Wiley

WASHINGTON, July 25, 2022 – Former chairs of the Federal Communications Commission commended the current FCC administration at a symposium on Wednesday for working together on important issues with a 2-2 party split, but expressed increasing uncertainty about the fate of a fifth commissioner.

The Senate vote to confirm Gigi Sohn, a Democrat and net neutrality advocate, has stalled for months. And former FCC commissioners were wary of her prospects before the midterm elections in November. Some Republican critics are concerned that Sohn, nominated by President Joe Biden in October, won’t be able to remain non-partisan on the issues she would encounter as a commissioner.

“Confirmation is still possible, but with the extended August recess and looming midterm election, there aren’t a lot of legislative days to get the job done,” said former FCC Chair Richard Wiley. With each passing day, the confirmation becomes more difficult, agreed panelists, as the Senate could flip to a Republican-controlled chamber come November.

In the meantime, the former commissioners praised the efforts of the current staff. “A lot of credit should go to the Chairwoman [Jessica] Rosenworcel and indeed to all the commissioners for maintaining a robust agenda over the last year and half and really getting decisions made,” said Wiley. “Two Democrats, two Republicans have worked together to serve the public interest.”

William Kennard added that, “this is an energetic commission, they want to get things done.”

Some initiatives that have received unanimous FCC votes include spectrum-sharing initiatives and robocall enforcement.

Editor’s note: The comments in this story were quoted from and attributed to a July 20, 2022, symposium. That symposium was hosted by the Multicultural Media, Telecom and Internet Council. 

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FCC

FCC Adopts Spectrum-Sharing Incentives, Proposal on Call Traffic Arbitrage

The agency voted to incentivize the sharing of underutilized spectrum to increase connectivity in the nation.

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Photo of Nathan Simington, Brendan Carr, Jessica Rosenworcel of FCC (left to right)

WASHINGTON, July 14, 2022 – The Federal Communications Commission voted at its July open meeting Thursday to adopt spectrum-sharing incentives and to crack down on the practice of driving up revenue from call traffic inflation.

The commission voted to adopt a program that will build incentives for larger spectrum holders to make underutilized spectrum available to smaller carriers, tribal nations and entities serving rural areas. The program, called the Enhanced Competition Incentive Program, will have incentives including longer license terms, extensions on buildout obligations, and more flexible construction requirements.

The commission is also seeking comment on whether to expand the program eligibility to non-common carriers serving non-rural areas.

“I’m excited to see the new deployments this program will foster,” said FCC Chairwoman Jessica Rosenworcel. “I think it will help expand wireless deployment in rural and tribal communities… to make sure we reach 100 percent of us with high-speed service.”

Experts have advocated for more carve-outs for unlicensed spectrum to tackle the growing demand for connections and relieve congestion on existing frequencies. The Rural Wireless Association applauded the FCC Thursday on the vote, saying it believes that program can “encourage the necessary transactions that can expand telecommunications and broadband service in rural America.”

Cracking down on call traffic arbitrage

The commission also proposed rules to address the practice of telephone companies inflating traffic to generate more revenue, which raises costs for long-distance carriers.

Intercarrier compensation is the system of regulated payments that sees carriers compensate each other for cross-carrier call traffic. Some companies, however, continue to take advantage of the system by inflating traffic to extract additional revenues, the FCC identified. As a result, the FCC proposes to adopt monitoring rules to identify illegal arbitrage practices.

“This rulemaking is designed to shut down the loopholes these companies are exploiting,” said Rosenworcel. It would require providers to tally and report call traffic volumes to the FCC to verify its compliance with access stimulation rules, which were adopted in 2019 to clarify financial responsibility for calls.

Other actions

The FCC also proposed a $116 million fine against ChariTel Inc. for a robocall scheme that made nearly 10 million robocalls to toll-free numbers, which then generated revenue for the company from payments by the toll-free service provider.

FCC commissioners further voted to open an inquiry to evaluate how the Lifeline and Affordable Connectivity Program can be modified to support the connectivity needs of domestic abuse survivors.

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