O'Rielly Hints at Rural Telco USF Increase; Pai Aide Cites Need for More Predictability

A recent Further NPRM seeks ways to make rate-of-return USF more predictable, a statutory mandate, said Jay Schwarz, Chairman Ajit Pai's wireline aide, on a panel with colleagues. Schwarz noted an accompanying order provided more than $500 million in rural telco relief over time, but he said continuing budget controls complicate long-term planning. The FNPRM suggests some ideas for adding predictability to rate-of-return high-cost funding, particularly for legacy RLECs not receiving model-based support, he said. Responding to a question from NTCA Senior Vice President Mike Romano about new budget controls the Universal Service Administrative Co. is to announce starting July 1, Schwarz said the commission was "well aware" of the issue and encouraged parties to file comments.

Commissioner Jessica Rosenworcel "starts with the law" and its "reasonable comparability" mandate that high-cost rural and other areas should have service and rates that are similar to urban offerings, said her wireline aide Travis Litman. She also favors regulatory "simplicity," where possible. Jamie Susskind, chief of staff to Commissioner Brendan Carr, said her boss is focused on streamlining "outdated" regulations to increase private-sector incentives for broadband deployment. Where that's not enough, USF is a "valuable tool," she said.

The Department of Agriculture is seeking to expand "E-connectivity" through broadband deployment in rural America, as part of President Donald Trump's broader rural infrastructure initiative, said Rural Utilities Service Administrator Ken Johnson, in a short speech to NTCA in his first day on the job. He said the recent omnibus appropriations bill provided a "wonderful opportunity" by creating a $600 million RUS rural broadband program. He said the agency was focused on targeting the funding to parties where it can do the most good.

O'Rielly again voiced concern that new funding not be used to overbuild existing broadband infrastructure. Bloomfield said 5G deployment in rural areas could be difficult and noted "wireless needs wires" as cellsites aren't connected by "pixie dust." O'Rielly said that's not lost on the commission: "The future is wired and wireless. Both of these go hand in glove." The FCC is aware of the "need to address the fiber side of the equation," he said.

O'Rielly said the FCC needs to get more auction capability bang for its buck from the roughly $100 million it's budgeted annually to run spectrum auctions and other competitive bidding, including upcoming fixed and mobile broadband auctions: "We're about as far from eBay as you can humanly imagine." Addressing mid-band spectrum at 3.1-3.5 GHz, 3.5 GHz and 3.7-4.2 GHz, he said the FCC is trying to balance the interests: "We are trying to make sure there isn't any segment that's completely unhappy."

O'Rielly appeared optimistic about Tuesday's commissioners' meeting. "I think things generally are heading in the right direction on all the items," he told reporters after his NTCA appearance, when asked about a rural call completion order and NPRM. Another FCC official said the agency appeared headed toward a consensus vote on the rural calling item.

The new $600 million RUS broadband grant and loan program is a testbed and "down payment" on the rural infrastructure proposals of the Trump administration, said Jannine Miller, senior adviser for rural infrastructure to Agriculture Secretary Sonny Perdue. She said Congress told USDA to "do something new" in the pilot program. Asked about "buzz" regarding electric utility broadband initiatives, she said, "This is an all-of-the-above solution." The approach will be "technology neutral," but there's recognition that fiber is "reliable" and should be rolled out in more rural areas. The department and the RUS will be "laser focused" on ensuring loans are paid back and don't fund projects that overbuild broadband networks, she said. "We need to do this right. This has to be about results for rural America" and not about "pushing" money "out the door."

Miller said USDA would work with the FCC and NTIA to coordinate rural broadband deployment and mapping, noting they have to navigate "complex" and "sometimes conflicting" mandates. The department wants to "leverage" existing infrastructure and promote broader partnerships, including with local authorities. She said the administration is doing a broad review and "laying the foundation" to remove broadband deployment barriers across government agencies. The U.S. was recently ranked 10th among countries in its average broadband speed, she said: "Our president is not interested in being No. 10, so we have some work to do."

NTCA Notebook

Perdue, Pai, Johnson and others Wednesday will kick off a series of listening sessions on "E-connectivity" efforts to expand broadband connectivity in rural America, said a release from NTCA and others members of a coalition organizing the sessions: the Farm Foundation, CoBank, National Rural Electric Cooperative Association and the National Rural Utilities Cooperative Finance Corporation. The event is at the Department of Agriculture's Whitten Patio from 9:15 to 11:30 a.m.