FCC Eases Telecom Discontinuance Duties, Gives RLECs Broadband USF Contribution Relief

The FCC approved 3-1 an order to further relax telecom service discontinuance duties and related regulatory processes in an effort to remove barriers and encourage the industry shift from legacy wireline to next-generation, IP-based offerings. Commissioners also voted 4-0 to adopt an order to relieve certain rural telcos of USF contribution obligations on their broadband services to equalize their treatment with other carriers and promote affordability. Commissioner Jessica Rosenworcel largely dissented on the discontinuance order and concurred on the rural telco USF order.

The two orders and a high-band 5G spectrum item are a "digital opportunity hat trick," Chairman Ajit Pai told reporters after Thursday's commissioners' meeting (see 1806070009 for spectrum-item story). Members also approved items addressing IP captioned telephone service, cable leased access, toll-free 8YY access charges, text-enabled toll-free numbers, and slamming and cramming (see Notebook items at end of this story).

The discontinuance order streamlines the process for phasing out legacy services. As described, it appears very similar to a draft. Where carriers offer at least 25/3 Mbps broadband speeds, they will be allowed to grandfather lower-speed services subject to 10 days of public comment, with automatic grants in 25 days, "barring substantive objections," said a release. The order allows permanent discontinuance of services grandfathered for 180 days, with 10 days for comment and 31 days for automatic grant. It ends carrier discontinuance duties for services lacking customers or reasonable requests for at least 30 days, eliminates consumer education and outreach requirements for carriers discontinuing legacy voice services, and allows streamlined legacy voice service discontinuance applications when a carrier provides stand-alone interconnected VoIP throughout its service area and at least one other stand-alone, facilities-based voice competitor is present.

The order streamlines network-change processes by eliminating "unnecessary and burdensome or redundant notifications for changes that may impact compatibility of customer premises equipment," the release said. It "facilitates rapid restoration of communications networks in the face of natural disasters and other unforeseen events by eliminating advance notice and waiting period requirements for network changes in exigent circumstances."

Pai said the order to "modernize" rules builds on November streamlining (see 1711160032). "These reforms can free up billions of dollars which carriers can devote to building new networks instead of propping up old ones," especially important in rural America, he said. "It can take the FCC several months just to process the paperwork and greenlight the work" for shifting from legacy to advanced systems, said Commissioner Brendan Carr. "We cut that review time in half, while ensuring that consumers remain protected."

Commissioner Mike O'Rielly was willing to go further in some areas and voiced concern about the "questionable test" for discontinuing voice service based on stand-alone VoIP offerings. But he was "especially pleased that the item properly clarifies that our interpretation of the underlying statute, Section 214 of the Communications Act, and our accompanying rules cannot be read to give the commission blanket authority to prevent the discontinuance of unregulated services. Someone will probably try to claim that this is an imaginary straw man that would never be presumed, but I debated commission leadership staff during the [former Chairman Tom] Wheeler regime who argued that any service discontinuance by a Title II carrier required FCC sign-off. It was a truly frightening conversation."

Rosenworcel blasted an order that "guts" rules providing "basic consumer protections." She said technology changes make sense for carriers but may not for consumers. A rural grandmother will just want to know that her phone, health monitor and alarm system work, and will need a "heads up" and information. "Today, the FCC says she doesn’t need her carrier to provide her with this information. That’s because she can check the FCC’s Daily Digest and figure it out for herself," Rosenworcel said. "Who are we kidding? This is mean. It’s not just mean to my fictional grandmother, it’s mean to millions of Americans who will find that their carriers can switch out services without advance notice or consumer education, leaving them scrambling to find alternatives." She approved one part of the order: a decision to reject calls to forbear entirely from Section 214(a) duties.

The order drew praise from USTelecom (here) AT&T (here) and NTCA (here). The Internet Innovation Alliance said it "removes antiquated rules" that were barriers to investment. Public Knowledge criticized the order.

RLEC USF Relief

The FCC gave relief to rural telcos making USF contributions based on broadband service still subject to common-carrier regulation. "To level the playing field among all ISPs and reduce the cost of broadband in many rural areas, the FCC today granted a petition for forbearance that will, in effect, waive the requirement for small, rural carriers to contribute to the USF on their broadband Internet access transmission service revenues," said a release: It "will make broadband service more affordable for these carriers’ customers in rural America."

Pai said the order ends "discriminatory treatment" of "small, rural carriers," which serve high-cost areas and "have to pay broadband taxes that their competitors don’t." They "have no choice but to pass those taxes on to their customers, who as it is tend to have less ability to pay than their urban counterparts," he said, suggesting consumers could see monthly savings of $7 or more. Such savings "can make the difference between a family being able to afford broadband or getting left on the wrong side of the digital divide," Carr said.

O'Rielly hailed "unequivocal reaffirmation" the FCC doesn't impose fees on broadband service: "We don't tax the internet." He noted he is chair of a USF federal-state joint board. "Having studied the issue and worked for years on internet tax freedom, enshrined in the Permanent Internet Tax Freedom Act, I have made clear that expanding the contribution base is something I cannot entertain absent congressional direction," he said. "I hope that any lingering uncertainty regarding the commission’s willingness to consider new broadband fees has been put to rest and, instead, we can focus our attention on adopting an overall cap on USF."

Rosenworcel backed the order "as a matter of equity" to give the RLECs "equal footing," but called the decision "lacking." She said, "We forgo roughly $40 million in funding for broadband in rural America. Add to this the $55 million in lost interest income that the FCC just gave up by shifting universal service bank accounts without even a vote and you have nearly $100 million in universal service funds that have disappeared."

NTCA and USTelecom issued positive statements (here, here).

Meeting Notebook

Commissioners acted to shore up IP captioned telephone service (IP CTS) funding and introduce new services. They voted 4-0 to approve an order, declaratory ruling, Further NPRM and notice of inquiry, with Rosenworcel concurring and O'Rielly partially concurring. To curb growth in IP CTS funding approaching $1 billion a year, the order seeks to reduce usage and imposes interim cuts in provider compensation over the next two years that the commission believes will generate total savings of $400 million, said a release. The agency didn't specify the rate, but that level of savings is the same a draft estimated would be produced by cutting a $1.95 per-minute rate to $1.75 July 1, and to $1.58 July 1, 2019. Providers opposed the cuts and suggested there was no cost basis, though most of them signaled they could have accepted a two-year cut to $1.75. The ruling authorizes automated speech recognition technology to generate captions, which Pai said would be accompanied by telecom relay service minimum standards. But Rosenworcel said the FCC should have first figured out provider ASR compensation and service-quality specifics; some providers and advocates for deaf and hard-of-hearing consumers voiced similar concerns about service quality. O'Rielly cited a concern about the legal authority for a proposal to expand the IP CTS contribution base to intrastate telecom revenue.

The FCC unanimously OK'd an FNPRM on a cable leased access rules update, rescinding a 2008 order that never took effect. Leased access rules "have a muddled past, to say the least," Pai said, saying there needs to be a look at modernizing the regime to fit into the modern media market. Carr said he got added to the item a section seeking comment on First Amendment implications. Free State Foundation argued the leased access rules violate such cable operator rights (see 1806050004).

Commissioners voted 3-1 to adopt an FNPRM to curb "8YY" number access-charge abuse. The notice proposes a three-year transition to drive down the charges to a bill-and-keep regime, under which carriers exchanging such toll-free traffic recover their costs from subscribers, not each other, said a release. Pai said parties were gaming the intercarrier system, including robocallers that generate toll-free traffic to drive up payments that benefit them. Rosenworcel dissented and said the proposed change could "put an end to free 1-800 numbers." O'Rielly told reporters afterward he disagreed with that assertion.

The FCC unanimously approved a declaratory ruling and NPRM on text enabling of toll-free numbers. Pai said commercial use of toll-free texting is growing, citing such companies as Land's End and Butterball. The solution to potential fraud problems is "better-defined property rights" in the form of making clear who can text-enable a toll-free number, he said. O'Rielly, who approved the item, said it's not clear the problem is common enough to warrant regulatory intervention. He also said there should be an "end to the regulatory tap dancing" and the FCC should declare texting an interstate information service. He said consumers increasingly are dropping SMS-based texting for app-based texting over which the FCC has no regulatory authority and that it's senseless to put "antiquated regulatory burdens" on a service when consumers are migrating to other services.

FCC members voted unanimously to OK further actions against slamming and cramming. The order prohibits material representations on telemarketing calls to consumers that often precede unauthorized changes in their preferred telecom carrier (slamming), said a release. Such misrepresentation will invalidate consumer authorizations of carrier changes. Pai said carriers abusing a third-party verification process will be suspended from using that process for five years. The order also codifies a rule against placing, or causing to be placed, unauthorized charges on consumer bills (cramming). PK welcomed the new safeguards but said the FCC should have extended them to VoIP and other digital services.

The agency released the O3b U.S. market access modification and the Audacy authorization that commissioners approved before the meeting (see 1806050057). They appeared in Thursday's Daily Digest. Audacy said it expects to begin service in 2020 and that its ground station teleports are expected to be online early next year.