FCC staff posted USF budget control mechanism calculations affecting rural telcos in the first half of 2017 under a rate-of-return overhaul order issued in March. The mechanism is intended to maintain a $2 billion annual budget for rate-of-return carriers, said a Wireline Bureau public notice in docket 10-90 listed in Wednesday's Daily Digest. Representatives of NTCA, ITTA, WTA and USTelecom voiced concerns about the potential impact of budget controls on carriers' ability to meet reform goals under the order, said an NTCA filing posted Wednesday on a meeting Monday with bureau officials. They voiced concerns about (1) whether those sticking with revised "nonmodel" support would be able to deliver stand-alone broadband service at "reasonably comparable" rates or meet buildout obligations, and (2) whether those opting into new model-based support "would be able to achieve more aggressive buildout obligations (or even obtain such support at all) in the event of 'oversubscription' in the election process." NTCA expressed much interest in working "promptly" with the FCC to avoid a scenario in which "a lack of sufficient support could undermine the ability of carriers on both paths to carry out the mission of universal service, deter investment, and/or compel much higher prices" for rural broadband consumers. In a filing on a phone call with an aide to Chairman Tom Wheeler, NTCA called for "action immediately after November 1, 2016, with respect to the sorting of model elections and resolutions of any budget concerns that may arise should such elections result in 'oversubscription' for the model."

Comments are due Nov. 9, replies Nov. 16 on a telecom industry petition for FCC reconsideration of a policy statement instituting treble damages for violations of rules for payments to USF and other funding programs. The pleading cycle was triggered Wednesday by Federal Register publication of an FCC notice, which created docket 16-330. "The policy statement adopts a new treble damages formula for calculating forfeitures for telecommunications service providers' failure: (1) to timely pay their assessments for the federal Universal Service Fund (USF), Telecommunications Relay Service (TRS) Fund, local number portability (LNP), North American Numbering Plan (NANP) and regulatory fee programs; and (2) to file data required to assess payment obligations for these programs," said a petition filed March 6, 2015, by CTIA, NCTA, Comptel (now Incompas) and USTelecom (see 1503310052). The FCC's goals are laudable, the groups said, but the policy statement must be vacated because it wasn't promulgated with notice and comment under the Administrative Procedure Act. On substance, the treble damages policy is arbitrary and capricious, reflecting "a results-oriented effort by the Commission to drive the relevant forfeiture amounts as high as possible," said the groups, which pressed the agency in August to open a docket and seek comment on their petition (see 1608050061).

FCC Chairman Tom Wheeler expressed impatience with the industry-led Robocall Strike Force, which presented its initial report to the agency Wednesday. The release was a high-profile affair, with AT&T CEO Randall Stephenson, chairman of the strike force, and all five commissioners attending. Members of the task force have met more than 100 times leading up to the presentation, commission officials said. “We have not reached the goal,” Wheeler said. “We need solutions now."

Cox Communications said it will support the California Public Utilities Commission's request for an extension to the FCC Dec. 2 LifeLine implementation deadline. A CPUC spokeswoman confirmed Monday her agency will file at the FCC for an extension but hasn't yet. In replies posted Sunday, the operator said it “understands that the Commission will be filing a petition with the FCC requesting an extension of time to comply with the FCC rules concerning only eligibility criteria and the benefit portability freeze.” Cox heard that at the CPUC’s Oct. 14 LifeLine workshop, which went over federal changes to add broadband as a supported service, it said. “Cox supports the Commission seeking this extension and remains hopeful that the FCC will act promptly to grant the Commission’s petition well in advance of the December 2, 2016 deadline.” Industry and some states separately supported a USTelecom petition seeking a waiver of the deadline in 25 states, Puerto Rico and Washington, D.C. (see 1610210046). The D.C. Public Service Commission declined more time in comments posted in FCC docket 11-42 Friday: “Should unanticipated events prevent the DC PSC from amending its rules by December 2, 2016, the DC PSC will inform the Commission of this fact.” New York PSC comments to the FCC joined Michigan, Missouri and Puerto Rico regulators in supporting the USTelecom petition. In the Cox CPUC replies, the cable ISP urged the commission to “promptly adopt rules to align the California LifeLine eligibility requirements with the federal requirements.” AT&T told the CPUC any diversion from federal rules is risky and the commission shouldn’t adopt exceptions proposed by consumer groups (see 1610180028). “The potential for consumer confusion is too great for the Commission to go its own way on eligibility criteria,” AT&T said. Likewise, exceptions to FCC port freeze requirements “will be complex to implement and will ultimately only harm and confuse customers,” it said. The Office of Ratepayer Advocates supports aligning rules but worries about doing it too fast, it said. “An immediate transition will likely result in significant disruption and displacement of customers from the LifeLine program, particularly at a time when details of the FCC’s implementation have not been fully worked out. A gradual transition over a longer period is preferable because it will allow the Commission to better care for the needs of customers impacted by changes in eligibility requirements.”

AT&T, Amazon and CTIA spent much more money on lobbying this Q3 compared with the same period a year ago, according to disclosure forms due Thursday, some of which came in earlier (see 1610200059 and 1610200054). AT&T lobbying spending surged to $4.11 million, from $2.9 million, and CTIA lobbying spending reached $2.77 million, from $2.02 million. Amazon outlays rose significantly, too, to $2.71 million, from $2.02 million. Several other companies and trade groups showed more modest bumps: Comcast spent $3.41 million, up from $3.27 million, and Google at $3.81 million, compared with $3.65 million. Microsoft spent $2.22 million, up from $1.89 million. Dish Network was up $60,000 to $440,000. Many also reported declines. Facebook was down, $2.02 million vs. $2.59 million, as was CTA, $820,000 vs. $990,000, and Cisco $640,000 vs. $710,000. Several telecom industry groups showed a marked dip: USTelecom to $880,000 from $1.15 million; the Telecommunications Industry Association was down $10,000 to $50,000; and CenturyLink spent less than half what it did this quarter a year ago -- $410,000 compared to $840,000.

CTIA warned the FCC to avoid a “premature schism” between state eligibility programs for Lifeline and the updated federal program as a Dec. 2 implementation deadline nears. The group joined state commissions and industry groups supporting a USTelecom petition to give some states more time to align their Lifeline rules with changes to the federal program that added broadband as a supported service to the low-income program. USTelecom asked for temporary waiver of certain rules so Lifeline providers can continue enrolling consumers in the federal USF low-income subsidy support program based on state-specific criteria in 25 states, Puerto Rico and Washington, D.C. State support was expected in comments due Friday in docket 11-42 (see 1610180028).

The FCC and DOJ opposed a Full Service Network motion to respond to petitions for rehearing challenges to the commission's network neutrality and broadband reclassification order, which a court panel upheld in June (see 1606140023). FSN filed its response on Oct. 3 without court authorization and then filed its motion on Oct. 10, said the FCC/DOJ filing Wednesday to the U.S. Court of Appeals for the D.C. Circuit (USTelecom v. FCC, No. 15-1063). "Essentially, FSN's 'response' is an untimely petition for rehearing." FSN, a petitioner challenging the FCC order in the original case, said the statute required the commission to classify broadband as a telecom service under Title II of the Communications Act, but the commission decision to forbear from much ISP regulation was "unreasonable" (see 1610040032).

Sen. Ed Markey, D-Mass., joined public interest and consumer groups Thursday as expected (see 1610170062) in encouraging the FCC to adopt strong rules for ISP privacy, set for a vote at the Oct. 27 commissioner meeting. Meanwhile, government and industry officials told us, the provisions on how and when ISPs are allowed to offer broadband at a lower cost to consumers willing to give up some privacy protections are emerging as a big issue, but one that has gotten little attention. The FCC released its sunshine notice for next Thursday's meeting, which includes the privacy order. Business data service rules that are also on circulation didn't make the cut, as was expected (see 1610200047).

The Missouri Public Service Commission supported a USTelecom petition to give some states more time to align state Lifeline rules with changes to the federal program that added broadband as a supported service to the low-income program. With an FCC implementation deadline coming early in December, multiple states are expected to support the USTelecom petition in comments due to the commission Friday in docket 11-42 (see 1610180028). The association asked for temporary waiver of certain rules so Lifeline providers can continue enrolling consumers in the federal USF low-income subsidy support program based on state-specific criteria in 25 states, Puerto Rico and Washington, D.C. In comments posted Wednesday, the Missouri PSC said it won’t meet the FCC Dec. 2 deadline because it faces a lengthy rulemaking process. Historically, getting a required fiscal impact review from the state Department of Economic Development has taken “a few weeks to over a year,” it said. “As a general rule a minimum of six months is needed to complete a formal rulemaking.”

States are preparing low-income phone programs for federal changes to Lifeline, as the FCC Dec. 1 implementation deadline nears. With several Lifeline rules taking effect Dec. 2, under an FCC schedule (see 1610030040), NARUC General Counsel Brad Ramsay predicted some states will support a USTelecom petition to give some states more time. The Kentucky Public Service Commission plans to issue soon an order about how the changes affect its program, the Minnesota PUC released an order last week, and commissions in California and the District of Columbia are collecting comments. States have sued the FCC over the order, which added broadband internet access service (BIAS) as a supported service in the program.