States on USF Joint Board Meet Without FCC, as Contribution Question Hangs

BALTIMORE -- State members of the Federal-State Joint Board on Universal Service are ready to recommend how to revamp USF contribution, said State Chair Chris Nelson at a NARUC meeting. State members met unofficially Sunday without their FCC counterparts, Nelson told us. Monday, the NARUC Telecom Committee delayed voting on two competing Lifeline resolutions, but voted for a draft resolution to support requiring direct dialing of 911 in hotels and other enterprises.

“I can’t believe that we are still talking about all this,” said Nelson in a Sunday panel about USF contribution. The FCC deferred the USF contribution question to the joint board in 2014, but the board hasn’t answered. “All of the state members of the joint board are more than anxious to be done with this referral and give our final recommendation, and hopefully that will be coming very quickly,” said the South Dakota public service commissioner. Some states with dwindling USF revenue aren’t waiting; Utah and Nebraska recently announced shifts to a connections-based mechanism (see 1711020044).

State board members have consensus on what to recommend for USF contribution changes and have notified federal members, Nelson told us Monday. States wanted a full joint board meeting here, but federal members weren’t available, he said. “At whatever point our federal counterparts are ready to meet, we’re ready.” Resolving USF contribution should be a priority because it affects many other pending issues, said Nelson, and he understands Utah and Nebraska’s frustration. Monday, the FCC tapped Commissioner Brendan Carr to serve on the joint board, succeeding FCC Chairman Ajit Pai (see 1711130036).

The FCC likely isn’t interested in revamping USF contribution, said NCTA Vice President-State Affairs Rick Cimerman, as he and other industry panelists debated possible changes to address a federal contribution factor that could soon hit 20 percent. “A fantasy is that the FCC has any great interest in doing anything about this,” said Cimerman, “because there’s no political upside.” Pai probably doesn’t want to be seen as taxing the internet, he said. Contribution must be discussed because today’s USF isn't sustainable, said Allison Ellis, Frontier senior vice president-regulatory affairs.

“There should be no political sloganeering when it comes to contribution assessments” for state or federal USF, said Labros Pilalis, a Pennsylvania Public Utility Commission telecom analyst. Don’t tax the internet and other slogans aren’t “getting us anywhere,” he said.

The FCC didn’t comment. Commissioner Mike O’Rielly, federal chair of the joint board, met with state members at the July NARUC meeting (see 1707190029).

No Lifeline Resolution

The telecom committee greenlit an E-911 resolution by Colorado PUC Commissioner Wendy Moser that would signal to Congress that states think passing Kari’s Law (S-123) is a priority. The draft resolution received a minor “language cleanup” by staff, said Telecom Staff Subcommittee Chair Lynn Notarianni. It needs final NARUC approval.

The Telecom Committee pulled two conflicting draft resolutions about the FCC Lifeline item slated for Thursday's meeting of the federal body. The resolutions’ authors, Nebraska Public Service Commissioner Crystal Rhoades and District of Columbia Chairman Betty Ann Kane, disagreed on the FCC’s proposal to take away support for reseller services (see 1711030024).

The freshness of the FCC proposal convinced the committee to delay the resolutions and instead tee up a panel discussion at the winter meeting (Feb. 11-14 in Washington), Chairman Paul Kjellander told us. NARUC will file comments on Lifeline before then based on previous resolutions and clarify its position later, he said.

Seeking Broadband

Lower expectations for broadband speeds to reach the unserved, broadband providers suggested on a Monday panel.

The FCC broadband speed definition, 25 Mbps download and 3 Mbps upload, treats unserved people with dial-up the same as those who have 15 Mbps, but those with the slowest speeds need a “first serving,” said NCTA Director-State Government Affairs Roy Lathrop on a Monday panel. CenturyLink supports a 10/1 Mbps benchmark to cover more areas, said Vice President-State Government Relations Arthur Martinez. Regulators might get more “bang for the buck” with broadband adoption programs, Lathrop added.

It's fine to reduce the broadband definition if it ensures genuinely unserved customers are targeted first, and it would have the added benefit of allowing other technologies to substitute for fiber, said Montana Public Service Commissioner Travis Kavulla. He suggested a “public interest test” of what speeds people should be entitled to when using others’ money. On adoption, Kavulla said, “If you build it, they will eventually come.” Indiana Utility Regulatory Commissioner Sarah Freeman cautioned so-called underserved areas may include unserved people who can’t afford broadband where they live.

States and federal government should increase broadband funding, Martinez said. The Connect America Fund Phase II auction won't reach all unserved areas because it favors fiber and the available money won’t cover costs, he said. By early 2020 in its top 25 markets, CenturyLink plans to provide 40 Mbps broadband to 90 percent of homes and businesses, 100 Mbps to 70 percent and 1 Gbps to 20 percent, he said. By 2021, through CAF, CenturyLink will provide minimum 10/1 Mbps broadband to 1.2 million households and businesses across 33 states, he said.

Satellite broadband may be useful for reaching the most remote areas, some panelists said. With a new satellite in the sky, ViaSat early next year will provide more capacity and up to 100 Mbps, Associate General Counsel Chris Murphy said on a second panel Monday.

TV white spaces won’t ever replace fiber or LTE but can provide “good enough” 25/3 Mbps speeds and could reach remote areas more efficiently than other technologies, said Microsoft Director-State Affairs Ryan Harkin. With white spaces, Microsoft thinks it can “solve the rural broadband gap” in five years for $15 billion, he said. White spaces and fixed wireless are “promising” ways to fill the rural gap and may justify future fiber investment if enough users join, said NTCA Senior Vice President-Industry Affairs Mike Romano.

NARUC Notebook

Verizon and Rivada criticized FirstNet on a Sunday panel discussion. States and territories have until Dec. 28 to decide whether to opt out of FirstNet; 31 have opted in. “It’s not clear whether AT&T or FirstNet are as committed to the principles of competition or interoperability as we are,” said Verizon Vice President-Public Safety Policy Don Brittingham. He claimed AT&T testified at a recent House Communications Subcommittee hearing (see 1710310060) that devices and apps will be based on proprietary standards even though law requires open standards. A Verizon spokesman said Brittingham was referring to AT&T testimony recapped on pages 86-87 of the transcript. FirstNet “absolutely will” use open standards, responded Andrew Delaney, its intergovernmental affairs specialist. AT&T was saying it would use proprietary standards for testing and certification of devices only on its own network, which is allowed, he said. Rivada Networks Interoperability Director Edmond Vea urged NARUC members to encourage others in their states to weigh options. “There should be no fear of opting out,” Vea said. One disadvantage of opting in is that a state wouldn’t have a contract with the vendor, he said. “You get good intentions.” Delaney replied that while states won’t have a contract with FirstNet, public safety agencies will have contracts with AT&T.