State Commissioners Seek MF-II Delay until Mid-March; VoIP Questions Linger

ORLANDO -- The FCC should extend the Mobility Fund II challenge process by more than three months to fix a deficient process, said a NARUC resolution cleared Monday by the Telecom Committee and Tuesday by the board. At NARUC's annual meeting (see 1811130035), the committee voted unanimously for the resolution after tweaking some language to address other commissioners’ concerns. Idaho Commissioner Paul Kjellander will step down as Telecom Committee chairman to join NARUC leadership, he said Monday.

NARUC elected Kjellander second vice president. The association elected Iowa Utilities Board Member Nick Wagner as president, replacing Jack Betkoski, Connecticut Public Utilities Regulatory Authority vice chairman. Wagner will choose new committee chairs. North Carolina Utilities Commission Chairman Edward Finley will be first vice president.

The MF-II challenge window shuts Nov. 26. It opened March 29 and the FCC extended the deadline once by 90 days (see 1808210044). The fund will provide up to $4.53 billion to support 4G LTE in unserved areas. The resolution’s sponsor, Mississippi Public Service Commission Chairman Brandon Presley, complained about a buggy speed-test app that he likened to the original Healthcare.gov (see 1810310035). The FCC defends its process and didn’t comment Tuesday.

The MF-II resolution urges the FCC to allow state challenges until March 15 and “to create an improved process in the interim that is transparent and will ensure that areas of the United States represented by members of NARUC receive the universal support required to fulfill the purpose of the fund.” The resolution is less harsh than earlier draft language urging the FCC to withdraw the current process and start over, with no end date given.

Sharing Presley’s frustrations, committee member and South Dakota Commissioner Chris Nelson said he negotiated the new language. He had worried the resolution “would have penalized states like South Dakota who have gone to great effort and expense to comply with the FCC’s challenge process.”

South Dakota plans to file challenges in about a week, Nelson told us Tuesday. The state has been working on the task since the spring and spent about $75,000, he said. The PUC hired a contractor that used its own software to measure coverage, so it didn’t use the FCC speed-test app, he said. “The companies put out these maps that overstate coverage, but we are the ones” who “have to spend the money to prove that they aren’t accurate, all in the hopes of getting better cell coverage for our citizens,” Nelson said. “The burden’s on the wrong shoulder.” The commissioner hopes the FCC will complete the MF-II auction as soon as possible next year.

Delay to March 15 would give the next Congress a chance to conduct oversight of the program, said Presley, a Democrat, in another interview. The Mississippi PSC chairman alerted his state's congressional delegation about the resolution, he said. Presley supported the edits to his resolution because he didn't want to punish another state like South Dakota, he said. Presley said he didn't receive feedback from the FCC about the draft but hopes it responds to the final resolution. The agency should investigate wireless coverage itself, he said: "The FCC has not had their act together in this from the very get-go, and they need to just fess up, straighten it out and move forward."

VoIP Debate

State commissioners and others debated VoIP classification after a disputed 8th U.S. Circuit Court of Appeals ruling in September that Charter Communications’ interconnected VoIP is an information service not subject to state regulation (see 1809070030).

Minnesota Commissioner Dan Lipschultz was “alarmed” two of three judges in one circuit would answer the VoIP question the FCC long avoided. “The 8th Circuit shouldn’t be making broad policy decisions that have profound national implications,” he said Sunday. The court did so in a single paragraph about net protocol conversion that didn’t address other arguments, he said. The FCC or Congress should answer the question, Lipschultz said. Resolving regulation of VoIP by way of a “technical distinction … is the wrong way to go about it,” he said.

While the Minnesota Public Utilities Commission seeks en banc review of the 8th Circuit ruling, the Vermont Public Utility Commission is reviewing a Comcast reconsideration petition of its February ruling that interconnected VoIP is a telecom service, said Vermont Commissioner Sarah Hofmann. The PUC made that call because VoIP calls sound and function like traditional phone calls, she said. Comcast flagged the 8th Circuit ruling for the Vermont commission’s attention, she noted. The PUC’s reconsideration order may be coming soon; Hofmann had hoped it would have been ready before this meeting.

Two ex-FCC staffers tried to explain why the commission never clarified if interconnected VoIP is telecom or information. Indiana University professor Barbara Cherry, in the Office of Strategic Planning 2002-06, blamed hyperpartisan politics. “Even within the agency from the staffer’s point of view, a lot of the analyses were becoming more politically politicized,” she said. VoIP is lower on the agenda “because of the flipping back and forth about” broadband classification, which must be resolved first, she said.

The FCC hasn’t decided many things and the VoIP question is “one of their better non-decisions,” said Free State Foundation President Randolph May. The FCC saw VoIP services and competition growing, so “it didn’t probably want to risk a decision when it didn’t need to,” May said. “They like to have things continue to develop.” Maybe the litigation will force FCC action, he said.

“So what?” asked NCTA Vice President-State Affairs Rick Cimerman. Cable complies with the Communications Assistance for Law Enforcement Act and pays into E-911, USF and the telecom relay services fund, and nobody is complaining about VoIP service quality, he said. Vermont and Minnesota are “outliers,” he said. Half of other states made it the rule not to regulate VoIP; the other half didn’t explicitly decide but haven’t tried to regulate VoIP, Cimerman said. No court ever found VoIP to be a telecom service, he added.

Competition is insufficient to protect consumers, and “the functionality of the service is critical” to the classification question, said Cherry. She hopes for en banc rehearing of the 8th Circuit ruling. It’s “strange” that the court decided the VoIP classification issue when, in an amicus brief, the FCC declined and said there was no need, she said.

NARUC Notebook

“Chances of 51 governments making a mistake are far less likely than five people sitting in one office in one city,” said Joe Witmer, counsel to Pennsylvania Public Utility Commission Chairman Gladys Brown, Monday. Witmer gets industry thinks the FCC sharing jurisdiction with the states and the District of Columbia is inefficient, but “this is a democracy,” he said. “It’s the way things work.” Replies are due Nov. 25 on the Pennsylvania PUC’s proceeding on asserting jurisdiction over pole attachments like 20 other states and D.C. (see 1810300023). The PUC has followed FCC rules for about 25 years, but industry says the conflict resolution process has been lacking, Witmer said. The PUC plans to adopt current FCC rules, but a big issue is what to do if the agency changes its rules, he said. If it doesn’t automatically adopt FCC rule changes, providers or others that disagreed with the FCC rule may see the state as a venue for “another bite at the apple,” he said. The FCC’s August order banning de facto moratoriums may have unintended consequences, said New Hampshire PUC Division Director-Regulatory Innovations and Strategy Division Kath Mullholand. New England states block infrastructure builds November-April because of concerns about ice, she said. New Hampshire doesn’t have any telecom authority, but still has control over what goes up on poles because it asserted pole-attachment authority, she said. Chairman Ajit Pai has been encouraging reverse pre-emption states to adopt federal one-touch, make-ready rules, Mullholand said.

Small rural phone companies are expanding through mergers and partnerships but are unlikely to buy out big price-cap carriers’ territories, RLEC officials said. Large carriers in North Carolina aren’t investing in fiber and have reduced staff, said Wilkes Communications CEO Eric Cramer. “If there was some kind of tax incentive” to take them over, “we may look at that,” but “it’s probably cheaper just to overbuild them using grants” and partner with electric companies, he said. There are some statewide discussions in the Midwest about buying neglected or abandoned assets, but in most cases it’s not worth it, said JSI Executive Vice President Leo Staurulakis, a consultant for RLECs. “It’s really going to have to be large swath with some pretty dense areas to make it worthwhile.” RLECs, municipalities and electrics make good partnerships, said NTCA Senior Regulatory Counsel Brian Ford. All have fiber, share a commitment to their rural areas and are looking for additional revenue sources, Ford said. Customers don’t care who provides service, so long as someone does, he added.