Just before suspending most operations due to the ongoing partial federal government shutdown, the FCC announced its tentative agenda for its next open meeting, scheduled for January 30, 2019. While the January agenda is brief compared to the jam-packed meetings that typified 2018, the FCC plans to adopt items to advance new anti-spoofing measures combating manipulated caller ID information and take further action to address the management and handling of 911 calls for the IP Captioned Telephone Service (“IP CTS”) that aids communication by those with hearing loss. Rounding out the notable meeting items, the FCC would adopt a mechanism to phase down legacy high-cost support for price cap carriers as well as competitive carriers previously subject to the “identical support rule” and transition such support to the winners of the recent Connect America Fund (“CAF”) Phase II auction.

You will find more details on the significant January meeting items after the break:

Continue Reading FCC Issues Tentative Meeting Agenda Addressing Spoofing and Disabilities Access Before Federal Government Shutdown

At its August Open Meeting, the Federal Communications Commission (FCC) approved a Public Notice (“Notice”) that addresses the procedures for its upcoming Connect America Fund (“CAF”) Phase II auction (“Auction” or “Auction 903”), scheduled to begin in 2018. Auction 903 will be a competitive reverse auction wherein service providers will compete for up to $1.98 billion in financial support as part of an ongoing effort by the FCC to revise the high cost universal service support program. The Notice seeks comment on the FCC’s proposed process for how an applicant can become qualified to participate in the Auction, how bidders will submit bids, and how bids will be processed to determine winners and assign support amounts. Comments are due by September 18, 2017 and reply comments are due by October 18, 2017.

The Auction is the second part of CAF Phase II. The initial part of CAF Phase II occurred in 2015, when ten price cap carriers accepted offers of support calculated by a cost model in exchange for the providers’ commitment to deploy and maintain voice and broadband service in high cost areas. Service providers that seek to participate in the Auction will bid on providing service to eligible high cost areas including those areas where incumbent price cap carriers declined the support calculated by the cost-model. In 2016, the FCC adopted the Phase II Auction Order, which established the rules for the Auction’s bidding process including the bidder performance obligations, application mechanism, bidder eligibility criteria, eligible areas, and post-auction obligations. More recently, in March 2017, the FCC adopted bidding weights for the different performance category tiers for Auction 903 (as previously discussed here). The Notice takes final steps towards executing the Auction by resolving specific details of the mechanics established in these earlier proceedings.

Continue Reading August 2017 FCC Meeting Recap: Commission Sets Reverse Auction Procedures for CAF Phase II Auction

iStock_000006131068MediumOn May 18, 2017, at its May Open Meeting, the Federal Communications Commission (“FCC”) adopted a Notice of Proposed Rulemaking and Order on a two-one vote, seeking comment on whether it should reform the so-called rural “rate floor” on basic voice service or eliminate it entirely.  The rural rate floor rule requires carriers receiving Connect America Fund support to charge rural customers a minimum monthly rate or risk losing subsidies.  The FCC imposed a two-year freeze on the rural rate floor to provide it with sufficient time to consider the proposed reforms.  The rulemaking is yet another reversal of a policy supported by former FCC Chairman Wheeler, which current Chairman Pai dissented from as a Commissioner, and represents another step by the Pai FCC to roll back its predecessor’s actions.

Continue Reading Split FCC Proposes Rural “Rate Floor” Reform

As part of its continued focus on accelerating broadband deployment, the Federal Communications Commission (FCC) eased restrictions on its universal service support for deployments by rate-of-return carriers in rural and other high-cost areas.  In a unanimous Order on Reconsideration issued at its April meeting, the FCC found that the restrictions drove providers to exclude high-cost areas from planned deployments, “stranding” communities without broadband.  Rate-of-return carriers will be able to receive support for broadband deployments up to certain thresholds, so long as they cover any additional expenses themselves.  Rate-of-return carriers should factor in this potential support when assessing broadband deployment plans or expanding existing buildouts.  As for providing support in areas served by price cap incumbent carriers, the FCC faces challenges to its recent order on instituting the Connect America Fund (CAF) Phase II auction, under which it will provide support to deploy broadband in unserved areas where the price cap carriers did not elect receive support.  Comments on the CAF challenges are due on May 18, 2017, with replies due on May 29, 2017.

Continue Reading FCC Eases Restrictions on Broadband Deployment Support for Rate-of-Return Carriers; Faces Challenges to Connect America Fund Phase II Auction

At the February 2017 Open Meeting, the Federal Communications Commission (Commission) approved an Order finalizing bidding rules for the upcoming Connect America Fund (CAF) Phase II auction where service providers will compete for up to $1.98 billion in financial support in areas where the incumbent provider declined cost-model funding. This Order is the next stage in an ongoing effort by the Commission to revise aspects of the high cost program of the universal service fund (USF) to encourage the extension of voice and broadband communications services to rural and high cost areas of the country. As of this writing, the Commission has yet to release the text of the order.

Continue Reading FCC Approves Bidding Weight Rules for Connect America Fund Phase II Auction

David Darwin co-authored this post.

In the final days of the Genachowski era, the FCC’s Wireline Competition Bureau continued to press forward to implement and refine the Connect America Fund (“CAF”).  Late yesterday, the Bureau released a number of order and notices on various parts of the CAF that will affect both Tier 2 and Tier 3 local exchange carriers (“LECs”) and their support.

First, to implement the CAF Phase II program in price cap LEC service areas, the Commission ordered the establishment of a process for determining eligible areas for Phase II support. After examining the National Broadband Map to determine whether census blocks are unserved and determining whether unsubsidized competitive providers in served blocks are offering both voice and broadband services, the Commission will put together a list of those census blocks it concludes lack unsubsidized providers and that are, therefore, potentially eligible for support. Such designations would then be open to challenges by both price cap LECs and unsubsidized competitors.

Additionally, the Commission issued a notice seeking comment on two potential frameworks to provide rate-of-return (Tier 3) carriers with additional incentives to more efficiently deploy broadband services. The first approach comes in response to rate-of-return carriers petitioning the Commission to make universal service fund support available to support broadband lines, including where consumers choose not to purchase voice service. To that end, the Commission seeks comment on a proposal by the rural carrier associations regarding changes to the existing framework to make those funds available for standalone broadband-service network infrastructure.

The second possible framework on which the Commission seeks comment would facilitate rate-of-return carriers’ voluntary participation in CAF Phase II, which sets defined support amounts for a defined period of time with specific service deployment requirements and which may prove advantageous for some rate-of-return carriers. Recognizing that rate-of-return carriers already have the option of voluntary conversion to price cap regulation, the Commission seeks comment on what steps it could take to further these conversions and on others issues that may arise in the provision of Phase II support to those carriers.

And, finally, following its questioning in the original CAF Order whether the authorized rate of return for CAF participants should be lower than the current 11.25 percent, the Commission issued a staff report on the proper rate-of-return for LECs participating in CAF programs, concluding that the rate should fall between 8.06 and 8.72 percent. The Commission also issued an accompanying notice seeking comment on that report’s analysis and recommendations.

You can expect the Bureau to continue to press forward on implementing the CAF, even with the Chairman exiting. In fact, we believe a new Phase I order for price cap LECs will be released very soon – possibly today.