An FCC rulemaking on potential changes to the federal E-rate program has touched a political nerve in a Washington, where the debate takes place against the backdrop of a bigger fight between Republicans and Democrats over entitlement reform. The NPRM, teed up for a vote Friday, builds on a June speech by President Barack Obama urging the commission to make high-speed Internet available to enough schools and libraries to connect 99 percent of American students (CD June 7 p7).
FCC Chairman Julius Genachowski said work on the incentive auction of broadcast TV spectrum is moving forward as well as could be expected. Genachowski is pleased the agency has launched a critical debate headed into an auction that could start as early as next year, he said in an interview Friday as he prepared to leave the commission. Genachowski, a friend of President Barack Obama, chaired the Technology, Media and Telecommunications Policy Working Group during the 2008 Obama presidential campaign, and has been on the job since June 2009.
FCC Commissioner Robert McDowell leaves office expressing some concerns about work left undone, especially on rules for an incentive auction of broadcast TV spectrum and media ownership reform. McDowell, a commissioner since 2006, was a surprise choice when nominated, but was viewed as a top candidate for chairman if Mitt Romney was elected president last year. Like Chairman Julius Genachowski he plans to leave Friday, leaving behind a 2-1 commission. McDowell said Tuesday his first stop will be the Hudson Institute’s Center for Economics of the Internet, where he will be a visiting fellow.
House Communications Subcommittee Chairman Greg Walden, R-Ore., said there is “plenty of blame to go around” but the current data on the program “doesn’t paint a picture of success,” in his opening remarks. He said the Lifeline fund grew 226 percent since 2008 and, in 2012, the FCC spent $2.2 billion on the program. “Specifically, it spent $2.2 billion of your money, my money -- virtually every American’s money -- since the Lifeline program and the entire Universal Service Fund is paid for through a charge on phone bills,” he said. “We are spending large sums of money and probably squandering much of it.”
Commenters generally supported a process proposed by the FCC Wireline Bureau to let parties challenge census blocks misidentified by the National Broadband Map (NBM). The process would let parties challenge census blocks identified as eligible to receive Connect America Fund Phase II support, when the parties argue they're actually unserved by an unsubsidized competitor. Cable and wireless ISPs offered some tweaks to the process. USTelecom and several rural associations offered alternative proposals that would involve recommendations by state authorities.
The FCC mass-media agenda may be light in 2013, compared with work on USF and spectrum issues that will take up much of the eighth floor’s and many bureaus’ and offices’ attention, commission and industry officials predicted in interviews last week. They said Media Bureau staff may find the new year sharpens their focus on spectrum, with Chairman Julius Genachowski hoping to finish an order for the voluntary incentive auction by the end of next year. He would need rules for how to change the channels of stations that don’t agree to sell all or some of their frequencies.
Higher education is ready to work with the commission on a connections-based contribution system, or an adjusted revenues-based system, the nonprofit association Educause told FCC officials (http://xrl.us/bnodj9). Under a numbers-based regime, higher education would pay up to 20 times more in USF fees than under the current revenues-based system, Educause said. Without end-users from whom to recover these additional fees, the added funds would ultimately have to come from staff salaries, and reduced student services, the group said.
FCC Commissioner Robert McDowell will continue to push for USF contribution reform, though he still has an “open mind” about steps to take next, he said in an interview. McDowell has long championed taking on the contribution side of USF (CD Jan 9 p1). The FCC approved an order in October addressing the distribution side of USF and an order on the USF’s Lifeline program in January. In May, the FCC released a 182-page further notice of proposed rulemaking on contribution reform.
Comments filed on USF contribution reform show little agreement and point to the need for more discussion, Verizon and Verizon Wireless said in FCC reply comments. That conclusion was seconded by many companies and groups filing replies this week. Though many suggested short-term fixes, most agreed there is little consensus to move to a numbers-based or connections-based approach.
Of the dozens of comments filed this week in response to the FCC’s rulemaking on USF contribution reform, there was little agreement about whether to stick with a revenue-based system for assessing contribution fees, to move to a system that uses connections or numbers, or even whether to assess fees on broadband service. The only universal sentiment that might be teased out of the plethora of comments filed is that, as AT&T put it, the current system is “dysfunctional.” Carriers differed, but generally supported a modified revenue-based system, while VoIP providers preferred a connections-based system.