#RuralisCool, Volume 1, Issue 40 | September 26, 2019

Perdue Offers ReConnect Update at NTCA 2019 Fall Conference

The U.S. Department of Agriculture (USDA) expects to begin announcing companies that will receive broadband funding through its ReConnect grant and loan program in October, said Agriculture Secretary Sonny Perdue at the NTCA 2019 Fall Conference in Denver. USDA received 146 applications requesting a total of $1.4 billion in the program, which has a $600 million budget, he said.

Speaking about rural prosperity, Perdue told attendees that “one of the most transformative things we could do would be to connect our country with rural broadband all across the country, and you’re the ones to do it.” 

Regarding the grants and loans, Perdue said, “I’m interested in a return on investment.” He said he wants USDA to do such a good job with the program that Congress will trust the agency to continue to award funding moving forward. He noted that Congress already has authorized an additional $550 million for a second ReConnect funding round to be announced in early 2020. 

Perdue expressed concern about the accuracy of federal broadband availability data and praised NTCA Chief Executive Officer Shirley Bloomfield for her recent testimony about the flaws in that data. USDA is working to validate availability data to make sure ReConnect funding goes to areas that need it, Perdue said.

NTCA Smart Rural Communities Showcase Awards Go to Eleven Rural Broadband Providers

On Monday, 11 broadband providers in nine states received Smart Rural Communities Showcase Awards from NTCA–The Rural Broadband Association, which has made the awards since 2013. The awards are designed to recognize the commitment of rural broadband providers and forward-thinking community members to drive growth and create opportunities within their communities.

The companies receiving the awards were:

  • Arvig (Pelican Rapids, Minn.)
  • Bulloch Telephone Cooperative (Statesboro, Ga.)
  • Chariton Valley (Macon, Mo.)
  • Green Hills Communications (Breckenridge, Mo.)
  • GRM Networks (Princeton, Mo.)
  • Kalona Cooperative Technology Company (Kalona, Iowa)
  • KanOkla Networks (Caldwell, Kan.)
  • Lynxx Networks (Camp Douglas, Wis.)
  • Mountain Telephone (West Liberty, Ky.)
  • RTC Communications (Montgomery, Ind.)
  • Wilkes Communications (Wilkes County, N.C.)

Honorees received their awards at the NTCA 2019 Fall Conference. More than 80 rural broadband providers have now received Smart Rural Communities Showcase Awards.

FCC Modifies Access Stimulation Rules

The FCC today adopted a report and order and modification of Section 214 aimed at reducing arbitrage of the intercarrier compensation system between local and long-distance providers. 

As the FCC explained, the arbitrage at issue involves certain rural local exchange carriers with high access charges that are alleged, often in conjunction with an intermediate carrier, to stimulate large volumes of incoming traffic by, for example, partnering with a free conference calling or chat line. 

Although past FCC reforms limited the ability of access-stimulating phone companies to collect terminating end-office access charges, tandem switching and tandem transport access charges still apply in certain cases. 

The actions taken today aim to reduce the financial incentives for carriers to engage in such practices by making an access-stimulating local exchange carrier financially responsible for covering the transport and tandem switching costs for incoming traffic. To do so, the order expands the definition of “access stimulation” to include situations in which the access-stimulating phone company does not have a revenue sharing agreement with a conference calling, chat line or similar service but merely has a high ratio of inbound calling traffic as compared to outbound traffic. According to the commission, however, the revised definition has been calibrated to avoid mislabeling “innocent” local exchange carriers as access stimulators.

Prior to today’s vote on the access arbitrage item, NTCA and other rural and telecom representatives had several meetings and phone calls with the FCC to express their concerns about certain aspects of the proposed item. 

On September 16, Mike Romano, senior vice president of industry affairs & business development for NTCA, and Rebekah Goodheart of Jenner & Block LLP met separately with Randy Clarke, acting legal advisor for wireline and public safety to Commissioner Geoffrey Starks and Joseph Calascione, legal advisor to Commissioner Brendan Carr, on the issue.

NTCA noted that it supports the commission’s efforts to eliminate inefficient arbitrage but has repeatedly highlighted that any effort should take care to prevent unintended harms to local exchange carriers. NTCA proposed specific steps that the commission could take to eliminate access arbitrage while also avoiding those unintentional harms.

In particular, NTCA expressed concern about a proposal that would cause rate-of-return incumbent local exchange carriers (RLECs) to be considered access stimulators merely because they have a 6:1 ratio of terminating-to-originating interstate traffic, even if they are not actually engaged in access stimulation practices. Instead, NTCA urged in the first instance that the FCC retain revenue sharing as a component of access stimulation, but to clarify its application and enforce that provision. In the alternative, NTCA advocated for adoption of different traffic-based tests for RLECs specifically in defining access stimulation, along with the opportunity for a RLEC to rebut any claim that it is engaged in access stimulation based only upon traffic-based tests. 

On September 19, Romano and Matthew Nodine of AT&T spoke with Nirali Patel, wireline advisor to Chairman Ajit Pai and Lisa Hone, deputy chief of the wireline competition bureau about access arbitrage.

NTCA and AT&T described their efforts to find common ground with respect to identifying when RLECs might be engaged in access stimulation. NTCA and AT&T discussed why a unique definition of access stimulation and other processes specifically adopted for these carriers would be appropriate, considering structural disincentives for RLECs to engage in access stimulation and limited evidence that these carriers have engaged in such practices and potential consequences. 

The final version of the FCC’s decision had not been released for further analysis as of press time.

NTCA Submits Comments to FCC on Rural Digital Opportunity Fund

NTCA submitted comments about the FCC Rural Digital Opportunity Fund (RDOF) proposal and the Digital Opportunity Data Collection initiative to the commission on September 20.  

In its comments about the RDOF proposal, NTCA noted that the commission should maximize cost efficiency by aiming for networks that will meet subscribers’ needs for at least a decade if not much longer. 

Specific recommendations include:

  • The commission should retain the four-tier structure used in the CAF Phase II auction but should update the tiers so that 25/3 Mbps is the “minimum” broadband speed that funding recipients must deploy, 100/20 Mbps is the “baseline,” 500/100 Mbps is “above baseline” and “gigabit” is 1 Gbps/500 Mbps.
  • Given the importance of applications such as telehealth, smart agriculture and distance learning, the commission should include a bonus for bidders committing to deploy symmetrical service.
  • The commission should adopt a maximum latency standard of 550 milliseconds and should adopt usage limits updated to reflect what consumers and businesses are likely to need over the next 10 years or longer. 
  • Census block groups should be the bidding unit. The commission also should clarify what qualifies as a location.
  • The Connect America Cost Model should again be used as the basis for determining RDOF auction reserve prices. 
  • To promote accountability and ensure that resources are not wasted, RDOF auction participants should be required to submit propagation maps and technical documentation in their short-form applications demonstrating the ability to meet their proposed performance metrics in the face of terrain, distance and other relevant factors. 
  • The commission should require those planning to use spectrum assets that are acquirable only through future auction or acquisition to flag this in their short-form applications and include a contingency plan in the event the applicants are unable to acquire the necessary spectrum assets.
  • The commission should require post-auction performance testing as well as a demonstrated 35% subscription rate that begins at the conclusion of the RDOF recipient’s final deployment benchmark and continues through the remainder of the support term.
  • The first stage of the RDOF auction should focus on census blocks that are indisputably unserved (as confirmed by a robust challenge process) to avoid concerns over partially served areas resulting from erroneous mapping and coverage data.
  • The commission should modify or clarify its anti-collusion rules to permit more than one RDOF auction participant to receive technical guidance from the same outside consultant during the auction.

NTCA Provides Further Recommendations on Creating Better Broadband Maps

In its latest comments on ways to improve broadband service mapping through the Digital Opportunity Data Collection, NTCA said it supported the initiative and offered suggestions to ensure that the move toward improved granularity of broadband availability data accounts for accuracy as well. 
Specific recommendations include:

  • Common technical standards underpinning reporting should be used to promote accuracy in data submitted.
  • A challenge process, separate from the use of crowdsourced data, should refine baseline data prior to its use in funding and other significant policy decisions.
  • Latency and the availability of voice service are important metrics that should be reflected on any DODC produced maps.

Notes in the News

The FCC and the Universal Service Administrative Co. (USAC) said the Lifeline National Verifier will fully launch in 11 states on October 23, 2019. The states are Arizona, Connecticut, Georgia, Iowa, Kansas, Nebraska, Nevada, New York, Vermont, Virginia, and West Virginia.

NTCA submitted comments to the FCC about performance testing measures related to the Connect America Fund. NTCA said it has identified aspects of the proposed data collection that indicate an average hourly burden that is larger than that anticipated by the FCC.

The FCC announced members for the six working groups of the Communications Security, Reliability and Interoperability Council.

FCC Commissioner Michael O’Rielly wrote a letter to Nevada Governor Steve Sisolak to say the state violated 9-1-1 funding rules by diverting money collected from consumers to support emergency 9-1-1 service to purchase police body cameras. O’Rielly noted that the decision to do this happened before Sisolak became governor but added that it is an ongoing problem. 

The FCC today adopted a public notice seeking comment on procedures to be used for Auction 105, the auction of Priority Access Licenses (PALs) in the 3550-3650 MHz band.