FCC Grants Forbearance from UNE Loop and Resale Requirements

At the statutory deadline on Friday, the FCC announced it had granted US Telecom’s petition asking it to forbear from requiring price cap ILECs to continue offering: (1) analog voice-grade copper loops on an unbundled basis at regulated rates and (2) legacy services for resale at regulated rates. The FCC found that the communications marketplace has transformed over the past  twenty years, with consumers migrating away from plain old telephone service provided over copper wires by their local telephone company toward newer, any-distance voice services provided over next-generation networks by cable, mobile and fixed wireless, and over-the-top VoIP providers.  The Order adopts a three-year transition period which will start on August 2, 2019 (the effective date of the Order).  For the first six months of the transition period CLECs may continue to order new UNE Analog Loops and Avoided-Cost Resale facilities.  Existing UNE Analog Loops and Avoided-Cost Resale facilities (including those ordered during the six-month transition period) must be grandfathered and maintained at regulated rates until the end of the three year transition,  The Order also provides a five-year transition period for Puerto Rico to account for the devastation to communications infrastructure in that territory from the 2017 hurricanes.

The Order does not forbear from unbundling obligations enabling the provision of broadband services.

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The Regulatory Mix Today: FCC Grants Forbearance from UNE Loop and Resale Requirements, FCC Proposes $20.4 Billion Rural Digital Opportunity Fund, FCC Promotes Telehealth in Rural America

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FCC Proposes $20.4 Billion Rural Digital Opportunity Fund

In a news release, the FCC announced a proposal that would direct up to $20.4 billion to expand broadband in unserved rural areas.  The proposal would make more areas eligible for support and requiring faster service than last year’s Connect America Fund (CAF) Phase II reverse auction.  If the FCC ultimately approves these proposals, millions more rural homes and small businesses would be connected to high-speed broadband networks providing up to gigabit speeds. 

In a Notice of Proposed Rulemaking the FCC seeks comment on continuing the expansion of broadband where it’s lacking by using an efficient reverse auction that builds on the success of last year’s CAF Phase II auction.  The Rural Digital Opportunity Fund would focus on areas currently served by “price cap” carriers, along with areas that were not won in the CAF Phase II auction and other areas that do not currently receive any high-cost universal service support.

         The Notice seeks comment on, among other things, proposals to:

• Make eligible for support any price cap area currently receiving CAF Phase II model-based support but lacking broadband at speeds of 25 Megabits per second (Mbps) downstream, 3 Mbps upstream, as well as the areas unawarded in the CAF Phase II auction.
• Make additional homes and businesses eligible for support by including areas that remain unserved, despite previous expectations that they would be served without subsidies due to estimated lower costs.
• Raise the standard for broadband deployment from the CAF’s 10 Mbps/1 Mbps minimum to at least 25 Mbps/3 Mbps, with incentives for faster speeds.
• Allocate support through a multi-round reverse auction like that used in last year’s CAF Phase II auction.  In that auction, competition reduced the cost of reaching over 700,000 unserved homes and businesses from the $5 billion auction reserve price to $1.488 billion.

FCC Promotes Telehealth in Rural America

At its Open Meeting last week, the FCC voted it took action to promote telehealth in rural America through reforms to the Rural Health Care Program that ensure limited program funds are disbursed efficiently and equitably, promote transparency and predictability in the program’s administration, and strengthen safeguards against waste, fraud, and abuse.  The RHC Program has long supported vital telehealth services and helps rural communities overcome obstacles to accessing healthcare.  The FCC’s action takes several steps to reform the distribution of RHC funding, in particular by revising the rules governing the Telecom Program to simplify calculation of the urban rate—the amount health care providers pay—and the rural rate—the amount that service providers receive.

          The Report and Order outlines a number of program reforms to:

• Target funding to rural areas in the most need of health care services and ensure that, when demand exceeds available funding, eligible rural health care providers continue to benefit from RHC Program funding by prioritizing support based on rurality and whether the area is medically underserved.
• Reform competitive bidding in the RHC Program to make it a more productive mechanism for health care providers to identify and select cost-effective service offerings available to them in rural areas; and
• Adopt a series of Program-wide rules and procedures to simplify the application process for program participants and provide more clarity regarding the RHC Program procedures.

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The Regulatory Mix, Inteserra’s blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of an Inteserra Briefing.