NARUC Telecom Committee Agrees to Modified Draft Resolution Backing Lifeline Resellers

The committee's staff Monday backed the pro-reseller Lifeline draft resolution of Vermont Commissioner Sarah Hofmann over the competing one from District of Columbia Chairman Betty Ann Kane welcoming an FCC proposal to retarget low-income funding to facilities-based providers (see 1802120029). Industry comments were "pretty much supportive" of maintaining the reseller funding, said Hofmann aide George Young Tuesday. Hofmann said she agreed to add some language from Kane's draft.

Nebraska Commissioner Crystal Rhoades said she had "grave concern" about the FCC plan. "This would have a devastating impact on the working poor," she said, noting again that she had received Lifeline benefits. "This is an attack on working people who are trying to find a way to work their way out of poverty. ... This is about wanting to punish poor people. This is about gutting the Lifeline program." The FCC proposal is "not about waste, fraud and abuse," because Lifeline has "one of the lowest" improper-payment rates among federal agencies, she said.

Kane was pleased two of her draft's three main points were added: urging the FCC to follow through on its proposals to reverse its pre-emption of state ETC designation authority and to eliminate federal stand-alone Lifeline broadband provider designations. She said broadband providers should be required to offer voice service: "Lifeline is a lifeline" and "if you can't reach 911, it's not Lifeline." She said the third point backing facilities-based funding "had nothing to do with an attack on poor people." It was simply a statement that funding should go toward infrastructure deployment to invest "in the future," she said, suggesting the facilities issue would return.

South Dakota Commissioner Chris Nelson offered an amendment to replace draft language supporting "reasonable and rational growth in the Lifeline fund to serve subscribers" with language backing a budget that "does not exceed the current soft budget notification amount." (Under the FCC's rules, staff is to notify the commission when funding nears the $2.25 billion budget, for possible action.) Noting current Lifeline funding is in the $1.3 billion to $1.5 billion range, he said the other three FCC programs had hard budgets and it would be "irresponsible" to support funding growth without a "firm cap."

Rhoades opposed the amendment, saying that only 30-35 percent of eligible consumers participate, in part because many aren't aware of it. Indiana Utility Regulatory Commissioner Sarah Freeman agreed with Nelson's concept but offered an amendment to the amendment to keep the draft's call for reasonable funding growth -- up to the current $2.25 billion soft budget, as firmed up by Nelson's language. Other commissioners supported the Nelson amendment, with some citing room for continued funding growth under a hard cap if it's kept at $2.25 billion. Freeman's "friendly" amendment was accepted, and the committee approved the revised amendment by voice vote with some dissent, and the amended resolution unanimously.

The modified Lifeline draft resolution "shouldn't have any issues" before the board Wednesday, Nelson told us.

The FCC proposal, particularly given the absence of a transition plan, would be harmful because resellers serve over 75 percent of Lifeline subscribers, said Free Press Policy Director Matt Wood during public comments. "Incumbents have not stepped forward," he said. "Resellers are essential" to the program, agreed Harris Wiltshire's John Nakahata, representing Q Link, which he said serves many rural Lifeline subscribers. TracFone Wireless Senior Executive Mark Rubin asked Nelson to urge Senate Commerce Committee Chairman John Thune, R-S.D., to "lend some sanity" to the debate in support of the draft's aims.

Kane's NNP draft resolution was approved unanimously, urging the FCC to further review the issues, including carrier costs, potential consumer fees and a timeline. It was modified to urge the agency to study the "nexus," between NNP and the IP transition, said Cary Hinton, a Kane aide. U.S. Virgin Islands Commissioner John Clendenin withdrew his overlashing resolution in the hopes of working out an agreement with NARUC's energy committee.

NARUC Notebook

Cable operators and smaller, rural telcos, not just major carriers, play roles in wireless/broadband, NARUC's telecom committee was told as it concluded for Tuesday. Comcast and NTCA executives want policymakers to keep this in mind and not to heed requests of only major wireless carriers. Comcast thinks unlicensed spectrum like Wi-Fi should be "on an equal footing with policymakers" with licensed interests, said David Don, Comcast vice president-regulatory policy public affairs. Broadband doesn't just travel on cable and other wired networks, Don and others noted. Wi-Fi "is the way that most of the traffic on the internet is carried today" over the last 100 or so feet, he said. "We see that traffic only increasing." Comcast is also interested in licensed spectrum, having spent some $1 billion in the FCC incentive auction (see 1704130049), Don said. T-Mobile has been quickly deploying in frequencies it bought, said Christopher Wieczorek, director-spectrum policy. He showed a map of the U.S. with the company's 600 MHz deployments in magenta, a color it uses in marketing, showing how the coverage spread from Cheyenne initially (see 1708160038) to elsewhere. "We want to serve rural America," said Wieczorek. "We want to be competitive and provide that additional service." As TV stations change channels, share spectrum or go off air if they sold spectrum in the auction, the magenta will spread further, he and others noted. Big providers may not always serve rural areas well, said NTCA Assistant General Counsel Jill Canfield, and wireline networks are needed for broadband and not just wireless. "The wireless piece is really just a fraction of the phone call or whatever you are doing on your mobile device," she said: "You need a whole lot of fiber," and it's expensive.

Expect bidding on FCC fixed broadband subsidies to have similarities to a recent New York state broadband subsidy auction (see 1801310030), said telecom consultant Carol Mattey on a panel Tuesday about the Connect America Fund Phase II auction scheduled to start July 24. She said Hughes Network Systems won the subsidy rights to serve 70,000 of the targeted 120,000 New York locations, though it would receive only about $15 million of the $210 million up for grabs. Verizon, which turned down an initial CAF II offer to serve its wireline areas statewide, would receive about $70 million to serve selected areas. Mattey said other states should expect that some high-cost areas won't receive terrestrial bids in the CAF II auction and should not expect "mystery bidders" to show up, as most such bids will come from incumbent telcos, cable operators and electric power companies seeking to serve areas in or near their current territories. Asked if his company would bid outside its territory, Bob Hance, CEO of Midwest Energy & Communications in Michigan, said, "I suspect that we probably will." NTCA Senior Vice President Mike Romano said RLECs are interested in bidding, but he suggested the auction was something of an experiment. The big auction will be the one in a few years, after the end of the current CAF II funding accepted by large telcos, he said.

Local number portability administrator transition talks are running out of time as stakeholders seek to resolve a dispute over a manual contingency rollback plan if iconectiv's new systems fail, said Bill Reidway, Neustar vice president, at a panel Monday. FCC Chairman Ajit Pai demanded that parties report back by Friday on a workable plan, as an April 8 Southeast regional cutover from LNPA incumbent Neustar to iconectiv nears (see 1802020070). Representatives of North American Portability Management and its transition oversight manager (PwC) said a "catastrophic failure" in iconectiv's systems is highly unlikely, given extensive preparations and safeguards. It's a "long shot," said Greg Chiasson, PwC transition oversight manager. But if it occurs, he and others said an industry-led manual rollback to Neustar's systems is the best solution. They said it helps that demand for LNPA functions will be much lower on April 8, a Sunday, and any major problems should be apparent in the early hours when an extended "maintenance window" is scheduled to allow manual fixes. NAPM co-Chair Teresa Patton, of AT&T, said risks aren't "minimal," but the solution is "doable." Reidway suggested if LNPA demand will be lower on Sunday, it's possible major problems won't become apparent until Monday. Neustar believes an automated rollback plan and more testing are needed, but the problem is the deadline, he said. Speaking for herself and not her company, Betty Sanders, Charter Communications senior director, voiced concern manual resubmission of number-porting requests would be a huge burden for Charter. Eckert Seamans attorney Jim Falvey, representing smaller providers, fears that in a manual rollback, it will be "every man for himself" with smaller providers "last in line." He said there could be call-routing issues, including for 911 and law enforcement. Patton said call routing will be a problem only if number-porting requests aren't completed, and said a manual rollback plan is the only way to meet the LNPA deadline. Iconectiv LNPA Administrator Kathy Timco said a "cookie cutter" automated solution is impractical because every carrier's system is different.