NARUC Telecom Members Say ETC Designation Key to Federal Partnership

Eligible telecom carrier designation is valuable to state commissioners and mustn't be eliminated, NARUC Telecom Committee members said in interviews last week. The committee plans to vote at the state regulator association’s July 20-22 virtual meeting on a proposed resolution that would reject an idea supported by some industry and FCC Commissioner Mike O'Rielly that raised state alarm (see 2007070057). State commissioners supporting the draft by Chair Karen Charles Peterson of Massachusetts said they haven’t seen the process discouraging providers from seeking USF funding. Two industry groups disagreed.

NARUC’s new broadband task force plans to meet virtually July 17, said its chair, South Dakota Public Utilities Commissioner Chris Nelson. NARUC assembled commissioners for the group at their last meeting (see 2002100023). Five subgroups will report on what they have learned and what additional information is needed on their subjects, which are based on the five areas in the task force’s charter, Nelson said. At this first, private meeting, the task force will begin planning how it will pull everything together into a “meaningful document,” he said.

The telecom panel’s draft resolution would ask Congress to reject the Expanding Opportunities for Broadband Deployment Act (HR-7160) by Rep. G.K. Butterfield, D-N.C., and amend the Accessible, Affordable Internet for All Act (HR-7302) by House Majority Whip James Clyburn, D-S.C., to require providers seeking reimbursement be designated ETCs.

"What we’re doing isn’t working," so "we need to take different approaches to speed the deployment of broadband services," Butterfield said in a statement to us. HR-7160 "takes a different approach by removing an outdated requirement of broadband service providers, which would increase the number of providers willing to serve rural communities and compete for their business." The COVID-19 pandemic "laid bare the dire need for reliable broadband access," he said: "Our children growing up in rural communities are starting out behind their peers, not just in the U.S. but globally, and their parents economic opportunity is also stifled without broadband access or subpar broadband services. We must change this and do so quickly." Clyburn didn’t comment.

Designating ETCs is part of a state-federal partnership, said Nelson, an elected Republican commissioner. “I’m not aware of anyone who has sought to be an ETC that’s been denied that and therefore denied the opportunity to compete for those funds, at least in South Dakota.” Nelson and the PUC’s other two commissioners July 1 wrote their state’s U.S. senator, Communications Subcommittee Chairman John Thune (R), to keep state ETC designation, Nelson said. The regulator hasn’t heard back. Thune didn’t comment.

ETC designation is “a very fair and open process” that lets state commissions annually check that telecom companies are using federal funding appropriately to expand broadband to unserved areas, Nelson said. It’s also a chance to talk to companies about places where citizens have complained about service, he said. The dialogue is productive, he said. State commissioners live closer to affected citizens and take their complaints about lack of broadband, he said: “50 state commissions have a whole lot more folks ... than some federal staff in Washington, D.C.”

It’s hard to see how Minnesota’s ETC process would discourage companies, said Commissioner John Tuma, a former GOP state representative. The state’s ETC process became more of an administrative function after state deregulation two decades ago, he said: “We weren’t really doing much other than expecting them to fill out a form” and promise 911 access. Minnesota is talking about increasing its role in the ETC designation process to try to “get a better look into what they’re promising and what they’re getting grants for,” and Tuma hoped providers wouldn’t balk at “a simple level of oversight.”

Consumers with complaints call their state commission before they try a federal agency, said Tuma: “Having that local aspect of it really is helpful.” The commissioner wants to develop a working relationship with Universal Service Administrative Co. “to figure out what they’re doing, and how could we enhance that, as opposed to doing the work twice.” State-federal communication needs improvement, he said. “There was always this kind of assumption that the feds were doing it all and we didn’t need to worry about it,” but then the PUC would “hear back there’s an assumption that the states were doing something which we weren’t doing.”

The ETC process offers state commissioners a view into “what is going on and what’s not going on,” and a voice to say where deployment is lacking, said Connecticut Public Utilities Regulatory Authority Commissioner Michael Caron. “Every state and even regions within states are so very, very different.” Laying a “federal blanket” is “efficient, but that doesn’t mean it’s actually going to work,” said the former assistant GOP leader of the state House: O’Rielly’s blog post perpetuates “the battle of the states versus the feds.”

The FCC commissioner’s comments are “pretty insulting to the states, who use the ETC designation and review process to ensure that the carriers are adequately serving customers,” emailed Nebraska Public Service Commissioner Crystal Rhoades. The suggestion that the process discourages providers from seeking USF “is another ploy by some members in the industry to siphon off precious resources without any framework for accountability,” the elected Democrat said. O’Rielly didn’t comment and the FCC declined comment.

The cable industry is “reaching out to NARUC Commissioners to articulate that federal oversight, in consultation with states, is the best way to speed deployment while ensuring appropriate safeguards,” emailed NCTA Vice President-State Government Affairs Rick Cimerman Friday. The Butterfield and Clyburn bills “would eliminate the anachronistic requirement that broadband providers obtain a state regulatory designation (ETC) as a condition of receiving federal universal service support -- an unnecessary requirement that discourages participation from proven providers and limits the effectiveness of federal programs.”

State ETC designation isn’t working for "small, hyper-local companies that deeply understand” state and county needs, said Wireless ISP Association CEO Claude Aiken. “They often find themselves without fair access to poles, rights of way, and other benefits afforded to large incumbents that enjoy legacy ETC designation. It makes no sense that they should have to offer legacy services that consumers do not want, and navigate a complex, expensive regulatory process, simply to deploy broadband cost-effectively.”