Pai Hurricane Relief Plan Draws Concerns, Funding Pitches, Praise

With a lack of electricity and access to funding hampering recovery efforts for communications services in Puerto Rico and the U.S. Virgin Islands, some concerns about the FCC USF-based aid proposal have emerged, industry and government officials in Puerto Rico, the U.S. Virgin Islands and Washington told us. Some industry officials expressed concern about the proposal's goals and said the plan does nothing for affected broadcasters. A group of Puerto Rico broadcasters pitched a nationwide disaster relief plan for broadcasters to Chairman Ajit Pai during his visit earlier this month. “What happened in Puerto Rico can happen elsewhere in the U.S.,” said Eduardo Rivero of Puerto Rico station owner Media Power Group.

Pai's draft order and NPRM seek to provide $954 million in high-cost USF support -- $750 million in Puerto Rico and $204 million in the U.S. Virgin Islands -- with about $256 million in new funding and the rest "repurposed" from scheduled multi-year funding. It includes $64 million in immediate telecom network restoration support, and proposes to allocate about $631 million "long-term" to further restore fixed service and upgrade broadband speeds, and $259 million "medium-term" to further restore and expand 4G LTE mobile broadband connectivity, said a release (see 1803060039). Visiting Puerto Rico, Pai said the plan's "lead proposal" is to invite companies to submit competitive proposals to serve geographic areas, likely the 78 or so "municipios," with the winners facing broadband buildout and other duties (see 1803080048).

Some parties initially welcomed Pai's plan in general terms, including Claro, Puerto Rico's largest telecom carrier. Claro and most others declined to comment further, citing the need to better understand the details, but some telecom industry representatives raised issues. “The chairman’s proposal, as we understand it, has little to do with hurricane relief," said one. "Although it has not been made public and the details remain murky, immediate new monies for actual hurricane restoration are a small fraction of the dollars he announced.”

"Hopefully, the plan is about restoring the island’s infrastructure, and not about a competition to rebuild only one network," said another industry representative, citing various competing wireless networks as "crippled" and voicing concern funding would help only one rebuild in a given area. An FCC spokesman emailed a clarification: "The competitive process is on the wireline side. On the wireless side, there isn’t competition by geographic area. Rather, there is increased funding for 3 years for all wireless providers, along with an immediate infusion of funds."

The FCC also needs to ensure "strong" Lifeline USF support to low-income users in Puerto Rico, which has 550,000, and the U.S. Virgin Islands, said Luis Belen, CEO of the National Health IT Collaborative for the Underserved. The FCC has given Lifeline rule waivers.

The plan's $256 million in new high-cost funding includes the immediate $64 million, and $66 million in already accepted "accelerated" funding would now be back-filled (not "offset") and another $126 million provided over time, an FCC official said. The plan would immediately give $51 million in Puerto Rico and $13 million in the U.S. Virgin Islands; and over time, $699 million in Puerto Rico and $191 million in the U.S. Virgin Islands, the official said. Of Puerto Rico's longer-term funding, $445 million would be for fixed service and $254 million would be for mobile, and of the U.S. Virgins Islands' longer-term funding, $186.5 million would be for fixed and $4.4 million would be for mobile, the official said.

Frustrated Broadcasters

TV and radio station owners in Puerto Rico said they are frustrated that, in Rivero's words, “there’s not a penny for broadcasters,” even though they were the only communications service that worked in the wake of the storms. Station owners conceded the way USF money is handled and FCC limited access to funds ties the agency’s hands, but they told Pai a new fund should be created as a solution. The FCC allowed broadcasters in Puerto Rico and the U.S. Virgin Islands to have early access to incentive auction repacking reimbursement, which could aid rebuilding (see 1801110061).

The FCC should oversee a nationwide disaster relief fund that would be dedicated to getting broadcasters -- especially radio stations -- back on-air after natural disasters, with the aim of preserving the ability to disseminate important information to the public, said Rivero. The fund would help struggling broadcasters in Puerto Rico, but it would also be in place for broadcasters anywhere in the U.S. taken offline by natural disasters, Rivero told us. He pointed to wildfires in California, and the recent East Coast windstorm as examples of other cases where such a fund could be of use: “There are emergencies every year.”

The money in the fund could come from broadcaster contributions and congressional appropriations, Rivero said. The plan would be paired with increased emphasis on the importance of the smartphone FM chip, Rivero said. Such chips “must be considered a part of" the emergency alert system, Rivero said. With the fund to help radio stations to get quickly back on the air and chips to let smartphones get FM reception widely available to ensure disaster victims have access to radio, the U.S. would be better prepared for natural disasters such as hurricanes, said International Broadcasting Corp. legal adviser Jean Paul Vissepo. Pai seemed interested in the proposal during a dinner with Puerto Rico broadcasters during his trip, Rivero said.

Broadcasters need more help getting on their feet partly because of the slow speed of insurance payouts, Vissepo and Rivero said, due the large numbers of claims. Many broadcasters affected by the storms were uninsured, Rivero said. The disaster fund proposal would help cover broadcasters waiting for insurance funds and the uninsured, he said.

Power Problems

Power is another major obstacle to recovery in Puerto Rico, Rivero said. "We have a very fragile electrical system.”

Twenty-five percent of Puerto Rico broadcasters are relying on generators, and 15 percent are off-air, Rivero said. Other vital services have returned slowly to Puerto Rico, but the House Natural Resources Committee said more than 150,000 Puerto Ricans, about 10 percent of electricity customers, were without power. That's based on numbers the Puerto Rico Electric Power Authority reported March 7 to the U.S. Department of Energy. A PREPA spokesman confirmed the number Friday. Outages continue.

The House committee and related subcommittee's Republican leaders wrote PREPA interim Executive Director Justo Gonzalez asking about allegations utility officials were paid $5,000 and given entry tickets valued at $1,000 each to restore power to "exotic dance clubs" ahead of scheduled restorations. PREPA officials also allegedly restored power to their own homes before doing so at critical infrastructure, including the San Juan airport and a major medical center. "In addition to betraying the public's trust, improper out-of-sequence power restoration has been associated with at least two fires and complicates scheduled power restoration operations," the letter said. The letter said material and equipment shortages remain "the biggest challenges to restoring electricity on the island," according to the Army Corps of Engineers. PREPA didn’t comment.

The Federal Emergency Management Agency had said earlier this month that the Virgin Islands Water and Power Authority announced electricity had been restored to all eligible customers in the territory. After hurricanes Irma and Maria, some 55,000 customers are without service on the U.S. Virgin Islands.

Restoration

Local telecom provider Viya plans “to complete construction by the end of March 2018 and individual connections to homes and businesses 30 days later,” emailed U.S. Virgin Islands Public Service Commission Chairman Raymond Williams. “We were also advised that a major portion of the delay and a serious challenge to them is the fact that shipping of equipment and materials were severely restricted due to" FEMA "placing priority on the restoration of electricity in the Virgin Islands.” With Viya installing “a much lighter hybrid fiber coaxial cable line,” there should be “less damage to utility poles” and quicker restorations of connectivity, Williams said.

Despite the concerns of broadcasters and others, many Puerto Rico and U.S. Virgin Islands officials and companies endorsed the FCC's draft plan. Viya said it would "play a critical role in both the immediate restoration of communications," and AeroNet tweeted it would provide "much needed assistance." Puerto Rico's Gov. Ricardo Rossello and Resident Commissioner Jenniffer Gonzalez also endorsed the proposal.

The Virgin Island PSC “is excited by the opportunities that will come out of the funding from Chairman Pai and the FCC in the near future,” Williams said. “We were able to meet and discuss with Chairman Pai our concerns relative to how the funding for the various telecom programs would be allocated and disbursed over an extended period of time. The authorization and infusion of USF dollars immediately after the hurricanes provided immediate relief to the territories as well. We also spoke about the quality of services standards to our ratepayers here in the Virgin Islands. He has assured us and the Governor of the Virgin islands, that he will do his utmost best to reach out to these companies.”

“The various federal agencies involved in the reconstruction of our islands have been, and continue to be, extraordinarily generous,” emailed U.S. Virgin Islands PSC Vice Chairman David Hughes. “The FCC actions will serve to accelerate the replacement of obsolete and aging telecom infrastructure that was proceeding even before Irma and Maria.”