A Path for Mobility Fund Phase II? 888011000110888 Commission management recently indicated that we will problem final rules for a new mobile-only universal service subsidy program right at the end of this year. While I stay greatly skeptical about the timing and value of doing so, given our encounters and the changes that have occurred over the past five years, it seems reasonable that if we are going to have this fund it must be structured and operated far better than nowadays wireless universal service fund (USF) spending. We owe it to people Americans that could benefit from a functionally-sound program and, more importantly, to those customers and businesses that pay for our universal service programs. Since it appears that the purpose plus structure of the program are still on with discussion and debate, I am putting forth some key elements that will tutorial my review of any reform. With no addressing most, if not all, of those points, it is hard to see how the unanimous, bipartisan vote can be achieved. Background In the late 1990s, wi-fi carriers became eligible to receive federal government universal service high-cost support to provide voice services. Over the subsequent years, wireless carriers’ interest in FCC funding led to rampant and unexpected development in the program. This included multiple carriers receiving money for the same locations, as well as for areas that could be served without having subsidies. To restrain overall program spending until comprehensive high-cost USF reform was passed, the Commission implemented two changes in 2008. Specifically, the Commission payment proposed to suspend its identical support rule, which provided USF support to competitive eligible telecoms carriers (CETCs) based on the incumbent local telephone company’s cost rather than their own, and it enacted an interim cap (i. e., funding freeze) pertaining to existing support on a per state foundation. When the Commission passed comprehensive reform in 2011, it responded many, but not all, of the pending questions regarding wireless carrier involvement in the high-cost program. In particular, this established Mobility Fund Phase I actually, a one-time spend of up to $300 million awarded via reverse auction; adopted the general parameters for Mobility Fund Phase II, which would provide up to $500 million per year more than a longer-term; issued an FNPRM to deliver the granular details for the Flexibility Fund Phase II; and officially eliminated the identical support rule. Simultaneously, the Commission established a five-year phase down of existing wi-fi support, as a transition to Mobility Fund Phase II, contingent upon that fund being operational simply by June 30, 2014. Since the Commission did not complete final rules for Mobility Fund Stage II by the self-imposed deadline, the particular phase down of existing support was paused. By the best of the count, this means that, in 2015, 218 wireless carriers still received approximately $578 million, which is well over the Commission intended to devote to the wireless-only program. During this time, the requirements to receive the funding have not been adjusted, even as technology has advanced. More, the key flaws of the existing assistance (e. g., duplication, not targeting unserved areas, over-subsidization) have not been resolved. In fact , these flaws are actually magnified because wireless providers have got deployed 4G LTE service to 99 percent of Americans. Unsubsidized carriers are now overlapping and delivering broadband services to the very same people in which subsidized carriers are still receiving frozen funding tied to the supply of basic voice service. Fundamental Concerns Serious questions must be raised over whether there should be a separate subsidy program for wireless companies. Specifically, it seems illogical that we might have a technology-specific fund when the cellular and wired worlds are blending. Even the most objective person would see them as substitutes, instead of complements, which is backed up by user perspective and behavior. For example , Pew Research Center’s Home Broadband 2015 report states, “many ‘smartphone-only’ users say that the reason they do not have broadband at home is because their smartphone lets them do all they need to do online, underscoring the device’s tool for those without a home high-speed membership. ” To say otherwise would disregard the vast improvements made over the last couple of years regarding wireless broadband and voice capabilities. And it’s only going to get better as “5G” wireless efficiency is developed and deployed. Outside of just using wired and wireless systems for the same purposes, we are not far from the point when users can effortlessly jump back and forth between systems, including satellite, for all desired communications without having blinking an eye. Subsidizing a decade or more of construction and operating costs for a mobile provider in an area should also raise substantial budgetary concerns. At $500 mil, the new Mobility Fund would equal more than 10 percent of the total high-cost program budget. At a minimum, the budget should be re-evaluated in light of the widespread application of 4G LTE. This is particularly important because precious funding will be needed elsewhere. For instance, almost everyone realizes the strong likelihood that the Payment will run short of money to deal with today’s most difficult unserved portions associated with America, better known as remote locations, where consumers have no access to the Internet further than perhaps dial-up or legacy satellite television systems. A mobile-only fund can eat into our finite assets, which are appropriately limited given the impact on consumers and businesses that will pay extra fees on their expenses to support universal service. In hindsight, if we addressed extensive high-cost USF reform now, instead of in 2011, I suspect technology-specific funds for wireless networks would not can be found. We likely would have one standard fund, agnostic with regards to technology, with funds awarded via reverse auctions across the board. Thankfully, it’s not past too far to make a course correction without upsetting the progress made so far. I would respectfully suggest that as an alternative to a mobile-only fund, the Commission rate should combine this funding with all other undecided and unallocated high-cost programs and tackle the open funding needs holistically. This would simplify eligibility, reduce the overall cost with regard to serving an area, provide greater efficiency and avoid the technology-limiting or incumbent-biased mandates. In particular, it would seem to make more sense to complete the remaining Remote Places Fund (RAF) decisions in conjunction with Mobility Fund Phase II. First, several RAF-eligible citizens have no viable broadband option in their vicinity. It is not about having a wired but no wifi solution; it’s about not having any solution at all, which should probably be a higher priority than making sure some consumers have both. Also, addressing the RAF in light of the convergence of wired and wireless networks (including unlicensed Wi-Fi) would narrow the areas that need the Commission’s attention plus subsidies. To some degree, this is similar to how the Commission is approaching the CAF Phase II post right-of-first-refusal auction: all technologies can participate and then let the best provider win. Notwithstanding these views, proponents of the separate, new wireless fund seem to be carrying the day. To the extent they actually, below are reasonable principles that should be put on any new program for wireless carriers. Six Principles for Reform Prohibit Overlap & Target Support – It makes no sense in order to subsidize a wireless carrier in an area that has another unsubsidized competitor. If the market can support two carriers – especially one not receiving FCC money – why would we would like to subsidize anyone? A key goal should be to fund only those areas that do not already have wireless service of at least 4G capabilities. As such, this would limit any Mobility Fund to narrow areas of America not already overlapped by our nationwide companies. In particular, the Commission’s Eighteenth Cellular Wireless Competition Report indicates that 99. 6 percent of all Us citizens and 90. 7 percent from the country’s geographic area has at least one provider of LTE. Moreover, even in these limited areas, there nevertheless may be places that do not warrant subsidies because they are not high price. We need to exclude these areas rather than provide funding where the market will probably resolve the situation. Subsidize Only One Carrier – Assuming we are able to get funding targeted to where it really is needed, we should not fund several carriers to serve the same area. The main goal – especially along with limited resources – should be to offer subsidies where competition cannot create by itself and then only to one provider. Conducting a reverse auction can achieve this goal. Phase Out Current Support – Several existing recipients of funds underneath the current wireless program argue that without continued subsidies, they may have to turn off certain unprofitable towers. This has already been labelled the “Rusty Tower” problem. Much of this territory, however , has already been covered by multiple 4G carriers. For the most part, the Commission should design an extremely narrow phase-out of support just for existing recipients, perhaps two years. As stated above, it would be a waste to fund service, and towers, in areas where three or four other providers already provide alternatives. Populations, Not Roads – In determining places that remain unserved, the Payment has traditionally targeted population places. This makes complete sense as we are trying to serve where people in fact live, work and function. The alternative discussed of funding road places leads to huge outlays for tiny portions of mainly unused roads and represents an inefficient use of funds. In the end, this may mean that its not all single square inch of America receives wireless signals. Providers Should Offer Broadband – Currently, wireless carriers receiving existing support under the old program possess few real service obligations. This really is no longer tolerable. Every USF plan that has been reformed recently has installed requirements for subsidy recipients to provide broadband of certain capabilities. Wi-fi carriers under a Mobility Fund Stage II should be no different. Finish RAF – Since outlined above, I would prefer to address the RAF in conjunction with creating the Mobility Fund Phase II. In the event that that isn’t in the cards, the particular Commission needs to at least consider connection between RAF and Mobility Account Phase II when adopting Flexibility Fund Phase II rules. It might make no sense, for example , to fund a mobile provider in an region through the Mobility Fund Phase II only to end up funding another cellular provider through the RAF in the identical area. That would simply re-create the issue of subsidizing multiple providers in certain areas while other consumers are remaining completely unserved. Considering those varieties of issues now would also assist ensure that the RAF is not postponed.

This summer 25, 2016 – 4: 45 pm

Erina O' Rielly | Commissioner

Commission payment leadership recently indicated that we may issue final rules for a brand new mobile-only…


No Responses to “A Path for Mobility Fund Phase II? 888011000110888 Commission management recently indicated that we will problem final rules for a new mobile-only universal service subsidy program right at the end of this year. While I stay greatly skeptical about the timing and value of doing so, given our encounters and the changes that have occurred over the past five years, it seems reasonable that if we are going to have this fund it must be structured and operated far better than nowadays wireless universal service fund (USF) spending. We owe it to people Americans that could benefit from a functionally-sound program and, more importantly, to those customers and businesses that pay for our universal service programs. Since it appears that the purpose plus structure of the program are still on with discussion and debate, I am putting forth some key elements that will tutorial my review of any reform. With no addressing most, if not all, of those points, it is hard to see how the unanimous, bipartisan vote can be achieved. Background In the late 1990s, wi-fi carriers became eligible to receive federal government universal service high-cost support to provide voice services. Over the subsequent years, wireless carriers’ interest in FCC funding led to rampant and unexpected development in the program. This included multiple carriers receiving money for the same locations, as well as for areas that could be served without having subsidies. To restrain overall program spending until comprehensive high-cost USF reform was passed, the Commission implemented two changes in 2008. Specifically, the Commission payment proposed to suspend its identical support rule, which provided USF support to competitive eligible telecoms carriers (CETCs) based on the incumbent local telephone company’s cost rather than their own, and it enacted an interim cap (i. e., funding freeze) pertaining to existing support on a per state foundation. When the Commission passed comprehensive reform in 2011, it responded many, but not all, of the pending questions regarding wireless carrier involvement in the high-cost program. In particular, this established Mobility Fund Phase I actually, a one-time spend of up to $300 million awarded via reverse auction; adopted the general parameters for Mobility Fund Phase II, which would provide up to $500 million per year more than a longer-term; issued an FNPRM to deliver the granular details for the Flexibility Fund Phase II; and officially eliminated the identical support rule. Simultaneously, the Commission established a five-year phase down of existing wi-fi support, as a transition to Mobility Fund Phase II, contingent upon that fund being operational simply by June 30, 2014. Since the Commission did not complete final rules for Mobility Fund Stage II by the self-imposed deadline, the particular phase down of existing support was paused. By the best of the count, this means that, in 2015, 218 wireless carriers still received approximately $578 million, which is well over the Commission intended to devote to the wireless-only program. During this time, the requirements to receive the funding have not been adjusted, even as technology has advanced. More, the key flaws of the existing assistance (e. g., duplication, not targeting unserved areas, over-subsidization) have not been resolved. In fact , these flaws are actually magnified because wireless providers have got deployed 4G LTE service to 99 percent of Americans. Unsubsidized carriers are now overlapping and delivering broadband services to the very same people in which subsidized carriers are still receiving frozen funding tied to the supply of basic voice service. Fundamental Concerns Serious questions must be raised over whether there should be a separate subsidy program for wireless companies. Specifically, it seems illogical that we might have a technology-specific fund when the cellular and wired worlds are blending. Even the most objective person would see them as substitutes, instead of complements, which is backed up by user perspective and behavior. For example , Pew Research Center’s Home Broadband 2015 report states, “many ‘smartphone-only’ users say that the reason they do not have broadband at home is because their smartphone lets them do all they need to do online, underscoring the device’s tool for those without a home high-speed membership. ” To say otherwise would disregard the vast improvements made over the last couple of years regarding wireless broadband and voice capabilities. And it’s only going to get better as “5G” wireless efficiency is developed and deployed. Outside of just using wired and wireless systems for the same purposes, we are not far from the point when users can effortlessly jump back and forth between systems, including satellite, for all desired communications without having blinking an eye. Subsidizing a decade or more of construction and operating costs for a mobile provider in an area should also raise substantial budgetary concerns. At $500 mil, the new Mobility Fund would equal more than 10 percent of the total high-cost program budget. At a minimum, the budget should be re-evaluated in light of the widespread application of 4G LTE. This is particularly important because precious funding will be needed elsewhere. For instance, almost everyone realizes the strong likelihood that the Payment will run short of money to deal with today’s most difficult unserved portions associated with America, better known as remote locations, where consumers have no access to the Internet further than perhaps dial-up or legacy satellite television systems. A mobile-only fund can eat into our finite assets, which are appropriately limited given the impact on consumers and businesses that will pay extra fees on their expenses to support universal service. In hindsight, if we addressed extensive high-cost USF reform now, instead of in 2011, I suspect technology-specific funds for wireless networks would not can be found. We likely would have one standard fund, agnostic with regards to technology, with funds awarded via reverse auctions across the board. Thankfully, it’s not past too far to make a course correction without upsetting the progress made so far. I would respectfully suggest that as an alternative to a mobile-only fund, the Commission rate should combine this funding with all other undecided and unallocated high-cost programs and tackle the open funding needs holistically. This would simplify eligibility, reduce the overall cost with regard to serving an area, provide greater efficiency and avoid the technology-limiting or incumbent-biased mandates. In particular, it would seem to make more sense to complete the remaining Remote Places Fund (RAF) decisions in conjunction with Mobility Fund Phase II. First, several RAF-eligible citizens have no viable broadband option in their vicinity. It is not about having a wired but no wifi solution; it’s about not having any solution at all, which should probably be a higher priority than making sure some consumers have both. Also, addressing the RAF in light of the convergence of wired and wireless networks (including unlicensed Wi-Fi) would narrow the areas that need the Commission’s attention plus subsidies. To some degree, this is similar to how the Commission is approaching the CAF Phase II post right-of-first-refusal auction: all technologies can participate and then let the best provider win. Notwithstanding these views, proponents of the separate, new wireless fund seem to be carrying the day. To the extent they actually, below are reasonable principles that should be put on any new program for wireless carriers. Six Principles for Reform Prohibit Overlap & Target Support – It makes no sense in order to subsidize a wireless carrier in an area that has another unsubsidized competitor. If the market can support two carriers – especially one not receiving FCC money – why would we would like to subsidize anyone? A key goal should be to fund only those areas that do not already have wireless service of at least 4G capabilities. As such, this would limit any Mobility Fund to narrow areas of America not already overlapped by our nationwide companies. In particular, the Commission’s Eighteenth Cellular Wireless Competition Report indicates that 99. 6 percent of all Us citizens and 90. 7 percent from the country’s geographic area has at least one provider of LTE. Moreover, even in these limited areas, there nevertheless may be places that do not warrant subsidies because they are not high price. We need to exclude these areas rather than provide funding where the market will probably resolve the situation. Subsidize Only One Carrier – Assuming we are able to get funding targeted to where it really is needed, we should not fund several carriers to serve the same area. The main goal – especially along with limited resources – should be to offer subsidies where competition cannot create by itself and then only to one provider. Conducting a reverse auction can achieve this goal. Phase Out Current Support – Several existing recipients of funds underneath the current wireless program argue that without continued subsidies, they may have to turn off certain unprofitable towers. This has already been labelled the “Rusty Tower” problem. Much of this territory, however , has already been covered by multiple 4G carriers. For the most part, the Commission should design an extremely narrow phase-out of support just for existing recipients, perhaps two years. As stated above, it would be a waste to fund service, and towers, in areas where three or four other providers already provide alternatives. Populations, Not Roads – In determining places that remain unserved, the Payment has traditionally targeted population places. This makes complete sense as we are trying to serve where people in fact live, work and function. The alternative discussed of funding road places leads to huge outlays for tiny portions of mainly unused roads and represents an inefficient use of funds. In the end, this may mean that its not all single square inch of America receives wireless signals. Providers Should Offer Broadband – Currently, wireless carriers receiving existing support under the old program possess few real service obligations. This really is no longer tolerable. Every USF plan that has been reformed recently has installed requirements for subsidy recipients to provide broadband of certain capabilities. Wi-fi carriers under a Mobility Fund Stage II should be no different. Finish RAF – Since outlined above, I would prefer to address the RAF in conjunction with creating the Mobility Fund Phase II. In the event that that isn’t in the cards, the particular Commission needs to at least consider connection between RAF and Mobility Account Phase II when adopting Flexibility Fund Phase II rules. It might make no sense, for example , to fund a mobile provider in an region through the Mobility Fund Phase II only to end up funding another cellular provider through the RAF in the identical area. That would simply re-create the issue of subsidizing multiple providers in certain areas while other consumers are remaining completely unserved. Considering those varieties of issues now would also assist ensure that the RAF is not postponed.”




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