FCC Seeks Comment on the Future of USF

2021-12-20T12:37:45-05:00December 20, 2021|e-Lerts|

Clients Encouraged to Provide Input and/or File Company-Specific Comments

The FCC is inviting public comment on the future of federal Universal Service Fund (USF) programs. The FCC plans to use these comments for a report it must submit to Congress by August 12, 2022, on its options “for improving its effectiveness in achieving the universal service goals for broadband” as part of the broadband provisions in the Infrastructure Investment and Jobs Act (IIJA). Last week’s Notice of Inquiry (NOI) set deadlines of January 18, 2022, for comments and January 31, 2022, for reply comments.

JSI plans to file comments in response to the NOI, with particular focus on the High-Cost program (Legacy Rate-of-Return, A-CAM I and II, and reverse auction support including the Rural Digital Opportunities Fund (RDOF) Phase II support). We seek client input on the topics outlined below, as well as any others specified in the NOI. For example, the NOI seeks comments on how best to integrate USF with ReConnect and the new funding programs established by the IIJA. We would like to hear from clients with multiple funding sources whether streamlining and aligning reporting and other compliance requirements with these programs and USF could be beneficial or whether such alignment could add additional burdens and requirements to some funding mechanisms.

We also encourage clients to file company-specific comments in which they can provide the FCC with their own proposals for the future of USF. Given that the NOI seeks data on potential changes to all programs, clients should consider filing comments not only on potential changes to the High-Cost program, but also changes to other USF programs. For example, several clients have expressed frustration with the requirements imposed by Lifeline’s Representative Accountability Database (RAD) process. Others are concerned with overbuilding that takes place through the E-rate program. Because the NOI seeks comment on potential comprehensive reform to all of these programs, now is the time to raise any concerns along with viable alternatives. JSI’s seasoned advocacy experts are ready to provide strategic advice and assist in drafting company-specific comments. Due to the FCC’s tight deadlines for commenting in this proceeding, we ask that clients interested in JSI’s help contact us no later than January 7, 2022.

High-Cost USF
A major concern among our ILEC Rate-of-Return clients is the continuation of USF to support both the deployment and maintenance of fiber networks in rural America. The NOI highlights the billions of dollars that will be available in coming years to deploy broadband in unserved and underserved locations through the programs initiated by the IIJA. Here, the NOI seeks comment more broadly on what changes should be made to the High-Cost program considering the influx of newly authorized federal funding. The NOI asks for comment on the role the High-Cost program should have in the future given the evolving level of universal service, the type of data to collect from program recipients, and how to collect that data.

Next, the NOI discusses the newly authorized Broadband Equity, Access, and Deployment (BEAD) program to be run by the National Telecommunications & Information Administration that will allocate $42.45 billion to states for broadband infrastructure grants and asks the following questions:

  • Should the FCC modify the High-Cost program to further support ongoing operating and maintenance costs of recently constructed broadband facilities funded by BEAD to ensure that rates remain reasonably comparable?
  • Should the Commission coordinate with the BEAD program to ensure that newly constructed networks have ongoing support?
  • At what point would USF support be necessary, if at all?
  • How should the FCC approach next steps for the RDOF program or any successor program?
  • In light of the 100/20 Mbps service standard required in BEAD, should the FCC reconsider its service requirements for future High-Cost support?

The NOI also asks for input regarding the best way to allocate funding in the future, including the potential use of reverse auctions, and whether there are “other incentive-based, competitive methods for allocating funding that would be effective and efficient.”

Additionally, the NOI asks what other congressional action could help the FCC accomplish its universal service goals. Specifically, the NOI asks:

If the High-Cost program were to place additional emphasis on supporting operating costs in light of the influx of funding for capital expenditures, are the existing programs a sufficient vehicle to distribute that support? If not, are there statutory changes that would help the Commission shift additional support to operating and maintenance costs for deployed networks? Likewise, if the focus of the BEAD Program funding is on fixed broadband deployment, would congressional action be necessary to shift the focus of the High-Cost program, for example, to support mobile broadband? Should Congress provide additional authority regarding the use of auctions, or price models, to allocate funding for operating costs?

These questions certainly raise the possibility that the FCC will not maintain the status quo for High-Cost USF. Accordingly, it is up to each rural broadband provider – and us collectively – to engage in a robust advocacy effort to ensure that any changes made to the USF continue to allow for sufficient and predicable funding for the provision, maintenance, and expansion of fiber-based networks in the rural communities in which these companies serve.

Other Programs and Contribution Factor
For Lifeline, the NOI seeks comment on whether any changes in the program should be made to best coordinate it with the Affordable Connectivity Program (ACP), including any data that should be collected. Similar questions are raised regarding E-rate and Rural Health Care programs.

The NOI also observes the up and down nature of the quarterly USF contribution factor and seeks comment on ways to increase the stability of the factor. It also requests “general comment” as to the FCC’s USF priorities.

Please contact Guy Benson or John Kuykendall in our Maryland office at 301-459-7590 with any input you may have for JSI’s comments, if you would like assistance in filing individual comments, or if you have any questions about the NOI.

Webinar: Managing Your Universal Service Contributions on Form 499-A

2020-12-15T14:47:58-05:00December 15, 2020|Webinar Recordings|

With the 4Q 2020 federal Universal Service contribution level at 27.1% and increasing each quarter (it will be 31.8% 1Q 2021), it is important that you fully understand how to calculate your payment. Not only do you want to ensure you’re complying with the FCC’s rules, but you also want to be certain that your company is not paying more than is necessary when filing your Form 499-A.

JSI’s USF expert Brian Sullivan, along with Ryan Denzel and Dixie Lucabaugh, reviewed FCC Form 499-A requirements and major contribution sources to clarify your company’s obligations during a recent webinar. They discussed:

  • Competitive pricing implications of passing through USF contribution requirements to customers;
  • Cost recovery options and requirements;
  • Documents you need to gather and maintain; and
  • Lessons learned from recent USAC reviews and audits focused on USF contributions and Form 499-A.

Arm your regulatory, financial, and sales staff with strategies and options as they close out the 2020 books and begin the 2021 financial year. Future USF payments and true-ups are based on calendar year 2020 revenues so now is the time to take a close look at your contributions.

A recording of the webinar is available for $249. Contact Brenda Cordwell in the Maryland office at 240-556-1295 if you’d like to purchase the recording of this webinar.

Webinar: Looking Ahead at Post-RDOF Auction Requirements

2021-04-05T15:00:56-04:00September 24, 2020|Webinar Recordings|

You’ve made it through the FCC’s short form application process and are preparing to bid in the $16 billion RDOF auction, currently scheduled to start October 29. But you also should be looking ahead at what might be on the other side of the bidding if you win. It may seem like many months away, but after the RDOF auction ends, winners must move fast to complete the long form application and other requirements.

JSI’s auction experts recently held a webinar where they provided a roadmap of post-auction requirements and milestones. This webinar is suitable for all RDOF applicants who plan to participate in the auction and covered the following topics:

  • Long form application checklist and timing
  • How to get an early start on an ETC designation
  • What to ask at the bank for a Letter of Credit
  • Public resources for auction bidders
  • Post-auction bid splitting
  • How to become authorized for funding and stay in compliance

A recording of the webinar is available for $249. Contact Brenda Cordwell in the Maryland office at 240-556-1295 if you’d like to purchase the recording of this webinar. For help with the RDOF post-auction requirements, please reach out to John Kuykendall at 301-459-7590.

Webinar: Inside USAC Filings and Administration

2020-05-19T14:32:57-04:00May 19, 2020|Webinar Recordings|

As any long-term recipient of Federal Universal Service Fund (USF) support knows, getting funding means year-round filings, administration, and deadlines to submit data to the Universal Service Administrative Company (USAC). Each funding mechanism – High-Cost, Lifeline, E-Rate, and Rural Health Care – requires numerous submissions to USAC, all in the name of accountability and transparency.

JSI recently hosted a free webinar where our USF experts discussed the important and often confusing USAC filings for each USF program. Attendees learned tips and best practices for USAC filings and overall administration of their USAC accounts.

This webinar is appropriate for newcomers to USF, as well as those with more experience who seek a better understanding of the rules and procedures for managing USAC filings.

If you have questions about the webinar or would like to request the webinar recording, please contact Brenda Cordwell at 240-556-1295.

FCC Schedules Vote on New $20.4 Billion Fund for Broadband

2021-04-05T15:09:55-04:00January 10, 2020|e-Lerts|

The FCC plans to take the next step in establishing the Rural Digital Opportunities Fund (RDOF) by scheduling a vote on draft rules at its next monthly meeting scheduled for January 30. As we explained in our August 1, 2019, e-Lert, the FCC started the process of establishing a new Connect America Fund (CAF), known as RDOF, in areas served by price cap carriers. The RDOF will distribute $20.4 billion for 10 years of support in two phases with the first phase being held in 2020. Under both phases, funds will be distributed using a reverse auction process, similar to the CAF Phase II auction conducted in 2018.

In most respects, the draft rules are consistent with those proposed in the Notice of Proposed Rulemaking (NPRM). One notable exception, however, is a change in how the auction will be conducted, which recognizes the overwhelming benefits of fiber over fixed wireless when it comes to spending limited Universal Service funds. This change was due in large part to the diligent efforts of our clients in North Dakota and other rural telecom industry advocates.

JSI will provide additional details once the final text has been released after the January 30 open meeting. In the meantime, please be aware that we can assist now with maps to identify potential areas where funding may be available and with any questions you may have regarding the RDOF or reverse auctions. Contact John Kuykendall at 301-459-7590 if you have any questions about RDOF or would like to get started on mapping potential target areas.

FCC Rules CLECs’ USF Phase Down Could Begin as Soon as April 1

2019-03-15T14:52:07-04:00March 15, 2019|e-Lerts|

List of Affected Carriers Released

The FCC released a Public Notice on March 12 resuming the phase down of legacy universal service support for “fixed” competitive eligible telecommunications carriers (CETCs), such as CLECs. This notice follows an Order released last month that ruled that universal service support received by fixed CETCs would be phased down beginning the first day of the month following the first authorization of CAF Phase II reverse auction support nationwide. It is possible that the first authorization of CAF Phase II reverse auction support could occur before the end of this month, making April 1 the earliest date when the phase down will resume for these fixed providers.

These CETCs currently collect 60% of the frozen universal service support they received when the Transformation Order was released in 2012. This support was scheduled to be phased down to zero over five years, but the phase down was “paused” as the FCC implemented its Mobility Fund Phase II program, which will allow mobile wireless CETCs to seek funding from this new mechanism.

According to the February 2019 Order, once the phase down begins, fixed CETCs will receive support equal to 2/3 of their support for the first 12 months and 1/3 of their support for the second 12 months. After that, the support will be eliminated. The affected carriers and their current levels of support are identified in an attachment to the Public Notice.

Please note that support for mobile wireless carriers will not be impacted pursuant to the Order. That support will be phased down after the Mobility Fund Phase II funding has been authorized and will depend upon certain factors, such as whether or not areas within their service territory will be eligible for funding from the auction. However, in the Public Notice, the FCC acknowledges that some mobile wireless carriers may have been included on the list and if that is the case, they should notify the FCC to have their names removed.

Please contact John Kuykendall in JSI’s Maryland office at 301-459-7590 if you have any questions about the Order or Public Notice, or would like assistance in notifying the FCC if you are a mobile wireless carrier whose name should not be on the list.

FCC Considers Proposal to Freeze and/or Eliminate Local Rate Floor

2017-12-14T10:24:43-05:00May 1, 2017|e-Lerts|

FCC Chairman Pai is circulating a proposal to freeze the local rate floor at $18 until it can act on new rules to completely eliminate the requirement. The FCC will consider the draft Notice of Proposed Rulemaking (NPRM) and Order at its May 18 Open Meeting. The NPRM proposes to eliminate the rate floor and its accompanying reporting obligation, and the Order freezes the rate floor at $18 until it takes further action on the NPRM. JSI points out that this is just a draft NPRM and Order. Nothing will be finalized unless two commissioners vote yes at the May 18th meeting.

This eleventh-hour potential action on May 18th may be too late for companies that need to have local rate increases in place by June 1st under the current rules. Most state commissions also require customer notification of at least 30 days for local rate increases and therefore many companies may have already notified customers of the June 1 increase to $20.

JSI recommends that clients that receive High Cost Loop Support (HCLS), and are thus subject to the rate floor, consider their options and be aware of any state-specific issues regarding local rate increases. We will continue to monitor this proceeding and will be glad to discuss this issue with those that may be impacted.

If you have questions about the local rate floor issue, please contact John Kuykendall in JSI’s Maryland office at 301-459-7590 or Lans Chase in JSI’s Georgia office at 770-569-2105.

Source: JSI e-Lert

JSI Webinar: Next Steps Down the A-CAM Path

2017-05-19T10:09:36-04:00January 12, 2017|Webinar Recordings|

A free webinar to provide additional guidance on the revised A-CAM offer

Just before Christmas, the FCC released its revised A-CAM offers for those carriers that initially elected model support by the November 1 deadline (see our December 22 e-Lert for details). “Glidepath adopters” are locked into the A-CAM at the original offer, however the remaining non-glidepath model electors carriers have until January 19, 2017, to decide whether or not to accept the revised offer. In addition to making this decision, all carriers electing A-CAM have several options and next steps that they should consider.

To better explain these options and next steps and answer any questions, JSI held a FREE webinar on January 12 for all A-CAM adopters. Our experts reviewed the pros and cons of electing A-CAM in light of the revised offers of support and provided additional guidance for clients that have yet to make this critical decision. We also covered decisions that A-CAM adopters must make, such as whether or not to tariff the Subscriber Line Charge (SLC) and whether to offer DSL on a retail basis to avoid having to pay the Federal Universal Service Charge (FUSC). We also discussed the requirements to submit geocoded data on all locations which were “newly served” in 2016.

JSI also has developed a template for those electing the A-CAM revised offer to use when submitting their letters to the FCC. The webinar went over our recommendations for properly filing the letter with the FCC as well. If you’d like a copy of the letter template, please email John Kuykendall.

If you would like a recording of the webinar, please contact Brenda Cordwell in JSI’s Maryland office at 301-459-7590.

FCC Releases A-CAM Election Results, Encourages Ex Partes by November 14

2017-05-19T10:09:36-04:00November 3, 2016|e-Lerts|

With less than a week to go before the 2016 Presidential election, the FCC revealed the election results that rate-of-return carriers have been anxiously awaiting for most of the year – the Alternative Connect America Fund (A-CAM) election. The deadline for submitting notices of A-CAM election was on November 1, 2016, and according to the FCC’s November 2 Public Notice, 216 rate-of-return carriers elected A-CAM for 274 separate study areas. The most significant piece of news about the A-CAM election is that the electing carriers exceed the 10-year budget by more than $160 million annually. This means that the FCC may allocate an additional $50 million, and also will need to take “other measures that may be necessary.”

Ex Partes by Nov. 14
The FCC likely intends to decide how to move forward with altering A-CAM metrics and prioritizing electing carriers. Because of this, the FCC has encouraged carriers to submit ex partes by Monday, November 14.

As such, JSI strongly encourages its clients that elected the A-CAM to submit written ex parte letters or schedule meetings with the Wireline Competition Bureau. If you are interested in submitting an ex parte or scheduling a meeting, please contact Steve Meltzer, John Kuykendall, or Cassandra Heyne in JSI’s Maryland office at 301-459-5790.

Source: JSI e-lert

FCC Dismisses Split Census Block Challenges to A-CAM

2016-07-27T16:44:09-04:00July 27, 2016|e-Lerts|

Expect a final release of the model soon and the start of 90-day election period

On July 25, 2016, the FCC released an Order addressing 147 comments containing 273 challenges to Alternative Connect America Model (A-CAM) coverage data that were filed in April. The FCC only granted 80 challenges, and denied or dismissed the remainder. With the A-CAM challenge process concluded, the FCC will soon release the final adjustments to the A-CAM and initiate the 90-day election period for rate-of-return carriers to decide if they want to accept model-based support.

The A-CAM Challenge Order was disheartening for many rate-of-return carriers that filed detailed and well-reasoned comments. However, it was anticipated that the bar would be very high for any rate-of-return carrier seeking to prove that a competitor does not have service in a census block absent the competitor revising its Form 477. As such, the FCC denied many of the challenges that were based on data gathered from a competitor’s online service availability tool or from drive tests/visual inspections of competitor’s equipment. The FCC did not find this evidence to be more compelling than the competitor’s certified Form 477. Also, requests made by rate-of-return carriers after March 30 to update June 2015 Form 477 data within their own study area were denied. On the other hand, comments filed by competitors requesting the FCC to use December 2015 Form 477 data and informing the FCC of revisions to their Form 477 data were accepted.

Seventy-six of the challenges filed were “split block” challenges, where a rate-of-return carrier identified blocks that are partially in its study area and partially in a neighboring ILEC’s study area. Additionally, JSI filed comments on behalf of 26 companies requesting the FCC modify the A-CAM to remove the impact of split blocks. In the A-CAM, the FCC disqualified entire blocks from support where the adjacent ILEC had reported 10/1 Mbps service using fiber-to-the home (FTTH) or cable modem in its own portion of the block. Split blocks also could cause carriers to be excluded from A-CAM support if the adjacent ILEC reported 10/1 Mbps in the shared census blocks which then caused the carrier to exceed the 90% 10/1 threshold.

In denying the challenges and JSI’s request, the FCC claimed that it is “not administratively possible” to delineate partial blocks as served or unserved; and added that “[t]here is no way in the current model architecture” to achieve an outcome where split blocks are acknowledged. The FCC rejected JSI’s argument that neighboring ILECs are subsidized and cannot traverse study area boundaries and stated that it made a “blanket decision” to exclude any block where any provider has FTTH or cable modem service. The FCC even assumed that since some rate-of-return carriers have CLEC affiliates, they can actually cross study area boundaries, so “the simplest course was to exclude census blocks that are partially served using FTTP or cable.”

Essentially, the FCC concluded that it will not modify the model to incorporate split blocks and even claimed that modification is unnecessary as there would be only limited impact overall in doing so. In the FCC’s eyes, the model is targeting support to where it is needed most and the split block impact is negligible and unlikely to be a determining factor of whether or not a carrier elects the A-CAM.

The road is now cleared for the FCC to move ahead with issuing the offer of A-CAM support to rate-of-return carriers. JSI anticipates this will happen this week or next. With decisions due 90 days later, it will be critical to have all the information you need to make the right decision for your company—and your customers. For more information about the A-CAM challenge results, contact John Kuykendall or Cassandra Heyne in the Maryland office at 301-459-7590. For A-CAM analysis, contact Steve Meltzer or Brian Sullivan, also in JSI’s Maryland office.

Source: JSI e-Lert

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