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FCC Freezes Universal Service Fund National Rate Floor

Posted by Andrew Regitsky

Jun 9, 2017 10:00:00 AM

One of the least known features of the federal universal service fund (USF) is the national “rate floor” requirement. The FCC adopted it in 2011 to ensure that consumers across the country are not subsidizing the cost of voice telephone service to rural customers whose monthly rates are below a set minimum rate. If a rural rate-of-return ILEC chooses to charge its customers less than the authorized rate floor amount for plain old telephone service (POTS), the difference between the amount charged and the rate floor is deducted from the amount of support that carrier receives through the USF. The current monthly national rate floor is $18, and it was scheduled to increase to $20 on July 1, 2017 and $22 on July 1, 2018.

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Topics: FCC, regulatory updates, Universal Service Fund

FCC to Approve Universal Service and Regulatory Reform for Rate-Of-Return ILECs

Posted by Andrew Regitsky

Mar 25, 2016 9:30:00 AM

For those of us who believe the FCC would more effectively regulate the industry if it could ever get beyond its current partisan bitterness, this has been a mixed week.  At the same time Republican commissioners are before Congress, testifying to the extent to which the Commission has become ultra-partisan, it appears the agency has actually compromised on a plan that would end the standalone rural broadband problem.  Under the current rules, rate-of-return (ROR) ILECs are prevented from receiving Universal Service Fund (USF) support for broadband-only services unless they provide an accompanying voice service even when their customers do not need or want that service.  The rule simply makes no sense in an age when customers have so many choices to purchase voice service.

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Topics: regulatory updates, FCC, ILECs, Universal Service Fund

Intense FCC Partisanship Becomes Public and is Harming the Industry

Posted by Andrew Regitsky

Jan 22, 2016 10:00:00 AM

We’ve talked before about how the FCC’s partisan divide is hurting the industry. It has clearly caused regulatory uncertainty, made new product offerings more complex and could potentially dampen future Internet and infrastructure investment. The partisan divide exists over all the most important telecommunications issues, including Internet regulation, broadband deployment, universal service and special access.   

Internal emails recently released through the Freedom of Information Act (FIOR) have demonstrated that relations between FCC commissioners have become so bad that the Democratic Chairman will not circulate draft orders to the Republican commissioners until just hours before the order is scheduled for a vote. That is ridiculous! Now this partisan divide, which was so obvious to those of us who follow the Commission, has become public, which can only make matters worse.

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Topics: regulatory updates, FCC, Universal Service Fund, special access, Broadband

Some Christmas Wishes For the FCC

Posted by Andrew Regitsky

Dec 23, 2015 9:53:23 AM

It is the holiday season and in the spirit of giving, we here at the CCMI TelcoExchange Blog thought it would be the perfect time to provide our friends at the FCC with some much needed (if not appreciated) Christmas wishes. So without further adieu, here we go!

Put Aside Political Differences - There are two themes that marked the FCC in 2015. The first is the tendency for every important decision to be decided on a 3-2 vote based on the political party of the five commissioners. Decisions such as the reclassification of broadband Internet access as a telecommunications service and the decision to usurp state authority over private broadband networks can easily be reversed once there is a Republican president and a Republican majority FCC. If the Democratic commissioners want to consolidate their gains, they would be better served through compromise rather than ramming through 3-2 partisan decisions.

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Topics: regulatory updates, FCC, Universal Service Fund, special access, Net Neutrality

Only One Rate-of-Return ILEC will Lose Federal Universal Service Support

Posted by Andrew Regitsky

Dec 18, 2015 10:30:00 AM

In an Order in Docket 10-90 (“Order”) released on December 14th, the FCC determined that Pineville Telephone Company (Pineville) in North Carolina is subject to a 100 percent overlap by an unsubsidized competitor offering competing voice and broadband services. Therefore, pursuant to the Commission’s rules, universal service support payments for Pineville will be frozen and phased out over a two-year period, beginning January 2016.   

For proponents of increased competition as a way to limit universal service dollars, this is extremely disappointing since, on July 29, 2015, the Commission published a preliminary list of 15 rate-of-return carrier study areas subject to a 100 percent overlap by an unsubsidized competitor or combination of unsubsidized competitors. Here was the original list:

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Topics: regulatory updates, FCC, Universal Service Fund

FCC Commissioner Proposes Universal Service Changes for Rural ILECs

Posted by Andrew Regitsky

Jul 2, 2015 9:53:22 AM

One of the interesting facets of covering the FCC for the last 30 years is the fact that the issue of universal service seems to go on forever. 

For every change or improvement the Commission makes to ensure the public has affordable telephone service, new problems always seem to arise. For example, since the 1996 Telecommunications Act made universal service into an explicit and dollar-specific program, the FCC has modified the contribution rules, developed cost model after cost model and increased and then limited the carriers eligible to receive funding. 

And yet, almost 20 years after the Act became effective, the Commission is still fiddling with the universal service fund (USF) rules. It has just expanded the Lifeline program to include broadband. It is contemplating requiring contributions from Internet service providers (ISPs). Most remarkably, the agency is still attempting to develop a workable cost model for rural rate-of-return (ROR) ILECs! The end is not in sight.

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Topics: regulatory updates, FCC, ILECs, Universal Service Fund, Broadband

FCC Proposes Expansion of Lifeline Program

Posted by Andrew Regitsky

Jun 5, 2015 9:39:39 AM

In his rebuttal to the FCC’s Open Internet Order, Commissioner Ajit Pai noted that one of the benefits of classifying broadband Internet access service as a Title II telecommunications service is that those revenues become fair game for the Universal Service Fund. Although the Commission chose to forbear from immediately enforcing this requirement pending a recommendation from the Federal-State Joint Board, Pai believes broadband Internet access providers will soon be contributing to the Fund and potentially financing an expansion in the Lifeline program.

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Topics: regulatory updates, FCC, Universal Service Fund, Open Internet, Broadband

The Ever-Expanding Universal Service Fund

Posted by Andrew Regitsky

Apr 24, 2015 9:16:00 AM

While the industry waits to see if the Federal-State Joint Board will recommend that broadband Internet access service providers must contribute to the Universal Service Fund (it will), and whether that recommendation is accepted by the FCC (it will be), it appears that the Commission is in search of even more ways to increase the flow of universal service dollars. Its latest effort is a back door attempt through the Universal Service Administrative Company (USAC) to require VoIP providers to contribute to the Fund based on their revenues from ancillary services such as call forwarding and call waiting. 

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Topics: regulatory updates, FCC, Universal Service Fund, VoIP

Universal Service Fund Exemption for Broadband Internet Access Providers Will not Last Long

Posted by Andrew Regitsky

Apr 3, 2015 9:43:29 AM

In its recently released Open Internet Order, the FCC congratulated itself on forbearing from the telecommunications requirement that  broadband Internet access services immediately begin contributing to the universal service Connect America Fund. This self-congratulation has become a habit.

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Topics: regulatory updates, FCC, Universal Service Fund, Open Internet, Broadband

Doubling Down on Universal Service Fund (USF)

Posted by George David

Feb 2, 2013 12:07:00 PM

Every once in a while, it pays to dismiss – or at least discount – policy arguments and look at the cold, hard facts. So, while the FCC’s interminable deliberations on Universal Service Fund (USF) reform continue consider this: in just under 10 years, the USF contribution rate has doubled. That’s right, doubled.

In the fourth quarter of 2003, the USF contribution rate was 8.7% – a number that at the time seemed extraordinarily high.  In the fourth quarter of 2012, the USF contribution rate hit 17.4% – a 100% increase from 2003!

Click the image to view a larger version.
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Topics: FCC, USF, Universal Service Fund