Federal Communications Commission (FCC)

An FCC draft rulemaking would seek to roll back ILEC technology transition duties in retiring copper networks and simplify the process for discontinuing telecom services under Section 214 of the Communications Act. The draft NPRM, which would also tee up potential actions to facilitate pole attachments, proposes "to remove regulatory barriers to infrastructure investment at the federal, state, and local level; suggests changes to speed the transition from copper networks and legacy services to next-generation networks and services; and proposes to reform Commission regulations that increase costs and slow broadband deployment."

State legislatures are adopting internet privacy protections on a bipartisan basis in response to President Donald Trump and Congress repealing FCC ISP privacy rules. Trump signed the Congressional Review Act (CRA) repeal Monday (see 1704040059) after votes last week. Wisconsin directly rebuked that action Tuesday and Minnesota responded last week by adopting ISP privacy amendments on major state bills.

The Trump administration appears increasingly likely to name a female economist to the open Republican slot on the FCC, industry officials said. Two names in particular have emerged -- Roslyn Layton, American Enterprise Institute scholar and member of the Trump FCC landing team, and Michelle Connolly, professor of economics at Duke University and former FCC chief economist under Republican Chairman Kevin Martin. Key senators Tuesday indicated no consensus formed around a single candidate.

A House Republican wants to modify FTC authority to revert to the status that existed prior to a 9th U.S. Circuit Court of Appeals' ruling on trade commission authority over ISPs. Observers told us such a legislative maneuver could be a key element of a broader strategy involving the FCC 2015 net neutrality order. Capitol Hill Democrats and public interest advocates argued in recent weeks that the 9th Circuit ruling would hamstring FTC authority over ISPs if the Communications Act Title II reclassification of broadband is overturned and authority over privacy handed from the FCC back to the FTC. Some congressional Republicans and FCC Chairman Ajit Pai say they want such a privacy handoff to the FTC.

The FCC would loosen business data service regulation under a draft order released Thursday and placed on the tentative agenda for the April 20 commissioners' meeting, as expected (see 1703280050 and 1703290049). The 172-page BDS draft would establish "a new framework that minimizes unnecessary government intervention and allows market forces to continue working to spur entry, innovation and competition." The order "recognizes the presence of strong competition" in the BDS market and eases regulatory burdens on the providers, said an attached fact sheet.

Lifeline advocates knocked FCC Chairman Ajit Pai's plans to roll back the agency's process for designating Lifeline broadband providers (LBPs), which he said usurped state authority. Senior House Democrats blasted the decision and Commissioner Mignon Clyburn voiced disappointment. Some said Pai wasn't living up to his rhetoric to close the "digital divide," but others praised him, including a key Republican senator. Although Commissioner Mike O'Rielly didn't comment, he previously said he didn't believe the FCC could bypass state authority to designate USF-eligible telecom carriers (ETCs) for Lifeline. Pai announced he would begin a proceeding to scrap the LBP process and said he didn't believe staff in the meantime should approve pending LBP applications (see 1703290025).

Telecom providers criticized a Nebraska proposal to change the state USF contribution formula from one based on revenue to a connections-based mechanism using phone numbers. In February, the Public Service Commission proposed a $1.29 surcharge for mobile voice, $1.24 for residential fixed voice and a five-tiered scheme for assessing charges to business lines. The current revenue-based contribution factor is 6.95 percent. But in testimony Friday released this week in docket NUSF-100, business line providers including Cox, Frontier and Windstream said the scheme for business lines isn't clear and may be tough to manage. For business lines, it’s not clear what revenue is to be considered in determining the surcharge -- only the business tariff rate or also extended-area-service fees and long-distance charges, Windstream said. Long-distance charges can fluctuate widely month to month, and business bundles could further complicate assessment, it said. Frontier said its billing system can't segregate or sort business customers into the five proposed tiers. Level 3 said assessing based on the number of phone numbers could hurt enterprise and government customers that have many phone numbers. CenturyLink said the business tiers are hazy and distinguishing between mobile and fixed lines for USF fees isn't equitable. CTIA said assessing different fees to mobile and fixed lines is “unreasonably discriminatory.” In other testimony, Communications Director Cullen Robbins proposed three alternative plans for contribution fees: (1) set mobile and residential voice surcharges equal at $1.29 and use two categories for businesses, single-line and multiline; (2) charge mobile and fixed the same fee and have one charge for business lines; and (3) use two categories for business -- single line and multitiered -- and treat residential fixed voice as a single-line business. "Continued declines in Nebraska Universal Service Fund (NUSF) remittances as a result of the erosion of the assessable base has led to a need to revise the contribution mechanism for the NUSF," Robbins said. A connections-based system is "more stable and predictable than the current mechanism,” he said. Some wireline companies supported the principle of assessing USF fees by connection as bringing more stability to USF. "A connection-based mechanism should be less volatile than a revenue-based mechanism, and … it should be less vulnerable to erosion of the contribution base," Windstream said. But Charter said it would be better to keep the status quo. "Moving away from this system will be complex, costly, confusing, and will likely need to be duplicated if the FCC ultimately changes the federal system,” it said. "Continuing with a revenue-based system is the most efficient, the most trusted, the most enforced and most enforceable, system yet devised. As [Winston] Churchill said: 'Democracy is the worst form of government, except for all the others.' The same can be said for revenue-based contribution systems -- at least at this time.”

Rep. Bill Johnson, R-Ohio, will be the “go-to guy” leading broadband infrastructure efforts for the House Commerce Committee and “therefore, for the Republican conference,” House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., said Tuesday before a gathering of NTCA members. “This is a guy you’re going to see a lot as we focus on broadband expansion.”

FCC Chairman Ajit Pai voiced sympathy for blocking a rural phone "rate floor" increase scheduled for July, and is committed to taking broader action to benefit rural consumers. Speaking at an NTCA legislative conference Monday, Pai said he hopes the commission can issue a fall public notice on further details of a planned Connect America Fund subsidy auction for fixed broadband services. Questioned by NTCA CEO Shirley Bloomfield, he was noncommittal about providing more FCC funding for rural telco USF mechanisms, but repeated his support for Congress including broadband through USF in any infrastructure bill.

A federal court threw out NARUC's case against an FCC VoIP numbering order after finding the state regulatory group lacked standing under the Constitution. "Because NARUC has failed to demonstrate an injury-in-fact, and thus failed to establish Article III standing to challenge the Order, the court lacks jurisdiction and the petition for review is dismissed," said a per curium order Friday of a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit in NARUC v. FCC, No. 15-1497. At oral argument Feb. 8, Chief Judge Merrick Garland and Judge Judith Rogers questioned if NARUC members were harmed (see 1702080021).