May 2019
News and Updates
Here are some updates from the Texas Telephone Association. View as Webpage
Update from Executive Director Lyn Kamerman
Texas Legislature in final week
As the Texas Legislature rushes through its final week before adjourning on May 27, the Texas Telephone Association team has been working with state lawmakers on the remaining telecommunications and broadband issues under consideration.
 
Throughout this session, the TTA government affairs team has worked closely with TTA member companies to advocate for policies to support a strong telecommunications industry in Texas.
 
It has been a strong team effort as we have worked on issues ranging from broadband deployment in rural Texas to enacting a new program that would allow Texans to securely register contact information for friends and family members for immediate notification in the event of an emergency.

As the same time, the TTA team has been working on some regulatory issues at the Public Utility Commission of Texas that impact the state’s telecommunications industry. There also, has been a flurry of activity in Washington and at the Federal Communications Commission on broadband deployments and the federal universal service fund.
 
Here are a few items of note.
 
TTA files comments on Q Link Lifeline application
 
Q Link Wireless’s application with the PUC to be designated eligible to receive state low-income support for its Lifeline customers within the AT&T, Frontier, and CenturyLink service areas in Texas is moving forward at the Texas PUC.

To participate in the state Lifeline program in Texas, carriers must be designated as an eligible telecommunications provider (ETP) by the Texas PUC.

TTA filed comments   on May 9 pointing out the various discrepancies in Q Link’s public positions in the current Texas proceeding as well as prior cases before both the Texas PUC and the FCC. Among the discrepancies, TTA points to Q-Link’s request pending with the FCC seeking to expand its eligible telecommunications carrier (ETC) designated service territory in Texas. In the FCC application, Q Link indicates it is not a facility-based provider and therefore does not need to seek PUC approval of its expansion request. At the same time, Q-Link is arguing before the PUC it is a facility-based provider under state rules.

TTA has been at the forefront of cases involving mobile virtual network operators that are seeking to be designated eligible telecommunications providers (ETP) by the PUC, including the recent Virgin Mobile proceeding. In TTA’s reply comments i n the PUC’s review of its rules, TTA and highlighted the potential impact on the Texas universal service fund of allowing wireless resellers such as Q Link to receive Lifeline support. ) 

The TTA team will continue to work with the Texas PUC staff on these issues and will keep members informed of any significant developments.

SB 586 report reviews

As the Texas PUC staff considers earnings reports filed by small companies that have opted into the new Texas universal service fund funding mechanism as part of SB 586 enacted in 2017, the TTA team remains involved in the process. 

On May 2, the Texas PUC staff released its final recommendation r elated to Eastex Telephone Cooperative, Inc. The staff recommended Eastex be classified as a Category 1 – or under-earning – provider. The PUC staff did not make any additional adjustments to Eastex’s reported earnings other than accepting those adjustments proposed by the company.

The Texas PUC staff has sought extensions of deadlines to file final recommendations in most of the companies’ cases. In addition, a discovery dispute with PUC staff related to executive, compensation associated with earnings reports was resolved.

Texas PUC evaluating competition in deregulated areas

The Texas PUC is evaluating competition in parts of Texas served by deregulated telecommunications companies.

The Texas Legislature during the 2017 session approved SB 1476 to create a process to review the continued support through the Texas universal service fund given to certain competitive local phone companies and determine whether the support should be eliminated. Previously, the support would have automatically been eliminated after a set period of time (generally two years after the incumbent’s support is eliminated). Under the 2017 legislation, competitive company support is only reduced after the PUC has performed an analysis to determine that the support should be eliminated based on a reduction of access lines.

The PUC opened an initial rulemaking in project no. 47668 i n October 2017, but the rulemaking has sat silent until now. On May 2, the PUC staff released a proposed rule for publication that was not approved by the commissioners at the May 9 open meeting after Chairman DeeAnn Walker indicated she has extensive concerns about this docket and called for a better process in rulemakings. She asked staff to develop in internal process for rulemakings.

Under the draft proposed new rule, the Texas universal service fund administrator is required to report to the PUC the number of access lines in service in deregulated exchanges and the exchanges in which the number of access lines served by competitive carriers has decreased by 50 percent from the number of access lines served by the provider on December 31, 2016. 

Under the initial draft proposed rule, at least every three years, PUC staff will review the state support for each exchange and make a recommendation as to whether universal service support should be eliminated in any particular exchanges, the number of competitors providing comparable service and whether continuing support is in the public interest.  

USAC addresses E-rate overbuilds

Many TTA members have expressed concern with the use of the federal Universal Service Fund’s Schools and Libraries program – known as E-rate -- to build over existing broadband networks throughout Texas.

The Universal Service Administrative Company on April 1 sent a letter to FCC Commissioner Michael O’Rielly related to consortia that have received federal E-rate funding to build out broadband connectivity to various schools and libraries across the nation. Commissioner O’Rielly has expressed concern with E-rate funds being used to potentially overbuild existing fiber networks, some of which may be supported by other federal universal service programs and requested information from USAC.

USAC said it was following the FCC’s direction under the 2014 Second E-rate Modernization Order that allowed applicants to seek E-rate funding to construct high-speed broadband networks beginning in 2016. USAC indicated it reviews such E-rate funding requests to make sure: (1) self-constructed high-speed broadband services are the most cost-effective alternative; (2) the bidder is selected based on a fair and open competitive bid process; (3) the building and use of the self-constructed services fall within the same funding year. USAC indicated if an applicant does not meet these criteria, the application for E-rate funding is denied.

When asked by O’Rielly whether USAC authorizes the use of E-rate funding that would result in overbuilding another provider’s network in whole or in part, USAC indicated it was unable to answer the question because it does not have data to determine whether E-rate funded projects duplicate other provider’s networks. USAC indicated carrier’s fiber network deployment data is proprietary information and not publicly available from other sources. USAC indicated the National Broadband Map is not sufficiently detailed to evaluate whether E-rate funds are being used to overbuild other providers.

USAC releases updated broadband map

The Universal Service Administrative Company has released an updated interactive rural broadband map identifying areas where federal Connect America Fund funding has been used to deploy broadband services. The updated map includes information reported in the High Cost Universal Broadband (HUBB) portal in 2019 and includes areas where providers receive support and where broadband has been deployed.

Rural rate-of-return carriers receiving Connect America Fund Broadband Loop Support (CAF-BLS) that have built out broadband at speeds of at least 10 Mbps download/1 Mbps upload broadband services to more than 80 percent of their service area have not yet reported broadband buildout efforts and are not included in the latest broadband map. Next year, these carriers will be obligated to report broadband deployments and that data is expected to be included in future maps.

FCC Chairman Pai announces efforts to close digital divide

Federal Communications Commission Chairman Ajit Pai on April 12 announced during a White House briefing a new three-part strategy to close the digital divide that includes $20.4 billion for a rural digital opportunity fund.

Details associated with the program are scarce, but Pai released a summary of initiatives that includes an effort to win the 5G race as well as an injection of $20.4 billion into high-speed broadband networks over the next decade through reverse auctions to deploy infrastructure to support gigabit-speed broadband in those parts of the country that need it. 

According to Pai, the effort will connect up to 4 million homes and small businesses to high-speed networks. The FCC on April 30 released a public notice announcing an intention to create a Rural Digital Opportunity Fund (RDOF) allowing interested parties to initiate discussions with FCC staff related to the new program.

FCC examining USF contributions

The Federal Communications Commission on March 26 FCC placed an item on circulation entitled “Universal Service Contribution Methodology.” The TTA team has no additional details to report regarding what the FCC is considering, but concerns associated with the existing contribution base of interstate telecommunications service revenues have been percolating for some time. TTA will be interested to see if the FCC takes action to revise the contribution base that could include requiring universal service contributions from large companies that benefit from running services across broadband networks such as Netflix, Google, Facebook and Microsoft.
Around the Texas Capitol – John Hubbard and Ian Randolph
Texas Legislature in the home stretch
The regular session of the 86 th Texas Legislature is in its final week with an eye toward Sine Die, the last day of the legislative session on May 27.

But before the Legislature adjourns on Sine Die, there are a number of procedural deadlines that bills must navigate to become law. But, contrary to popular belief, the action doesn’t stop when the Legislature adjourns. Once session ends, action simply moves to the governor’s office.

In Texas, the governor has three options regarding legislation sent to him from the Legislature. The first option is to sign the bill into law. The second option is to veto a bill in which case the bill dies and does not become law. The third, and lesser-known option, is the governor can choose to neither sign nor veto the bill so it becomes law without the governor’s signature.

Each of these options sends its own message to the members of the Legislature and the public.

Signing a bill shows the governor supports a piece of legislation and has taken a positive action to ensure it becomes law. Vetoing a bill does the opposite. A veto sends a strong message that the governor does not support a particular measure and has taken action to ensure it will not become law. The Legislature can override a gubernatorial veto if lawmakers are still in session with a two-thirds vote of both the Senate and House of Representatives.

If the governor allows a bill to become law without a signature, it sends a more subtle message -- while the governor does not support the legislation enough to sign it, he or she will not stand in its way to becoming law. As a result, the governor can argue both support for and opposition to a bill at the same time.

Because a bill can become law without the governor’s signature, the Texas Constitution gives the governor a certain amount of time to take action. When the Legislature is in session, the governor has 10 days from when a bill is received by the governor to decide how to address it. However, if a bill passes within 10 days of the Legislature’s adjournment the governor has 20 days to decide. This year June 16 is the 20th day after Sine Die and the deadline for Gov. Greg Abbott to decide how to dispense with bills passed by the Legislature.

So far, a relatively small number of bills have made it to the governor’s desk. As of May 3, only 104 of the 7,540 pieces of legislation (bills and joint resolutions) have been passed out of both chambers and, of those, only eight measures bills have been signed by the governor. Those numbers are sure to increase as we move toward the end of the session. 

Of course, we’ll let you know any action the governor takes on bills that affect TTA and the telecommunications industry. In the meantime, please let us know if we can do anything for you in Austin or if you have any questions.
Association News
Registration is open for the Texas Telephone Association Convention and Product Showcase set for August 25-28
Registration is open for the Texas Telephone Association Convention and Product Showcase set for August 25 through 28.

Please join hundreds of telecommunications industry professionals as we discuss key issues impacting the telecommunications industry at the Hyatt Regency Hill Country Resort and Spa in San Antonio.

TTA convention registration information can be found online  here . To reserve a room at the Hyatt Hill Country, more information can be found  here .

For more information contact Joann Kamerman at joannkam@tta.org .
TTA Foundation awards $48,000 in scholarships
The Texas Telephone Association has awarded $48,000 in four-year scholarships to six Texas high school students entering college in fall 2019.

“Education is key to students having the skills to fill the jobs of tomorrow,’’ said Bill Colston, Jr. of Riviera Telephone Company Inc. and chairman of the TTA Foundation. “As tuition and fees continue to rise, the cost of attending college continues to increase. Through the TTA Foundation scholarship program, Texas telecommunications companies are investing in our communities and in the development of our future leaders.’’

The TTA foundation – a nonprofit, philanthropic organization founded to help further the understanding of telephony and advance telecommunications as a career choice – awarded six four-year scholarships of $2000 a year to students entering college for the 2019-2020 school year.
In the State and Around the Nation
Texas Legislature approves emergency contact information program to aid first responders
The Texas Senate and House of Representatives have approved legislation that would allow Texans to securely register contact information for friends and family members for immediate notification in the event of an emergency.

The House approved Senate Bill 1764, sponsored by Sen. Judith Zaffirini, D-Laredo, and Rep. Four Price, R-Amarillo, that would allow Texans with a driver’s license or state identification card to voluntarily update their emergency contact information at any time with the Texas Department of Public Safety. The emergency contact information would be accessed by law enforcement in the event of an emergency. The measure now goes to Gov. Greg Abbott for his signature. An identical bill, SB 1809 was also filed by Sen. Eddie Lucio, Jr., D-Brownsville.

“This legislation will go a long way to assist first responders in the event of an emergency while helping to bring peace of mind to family members. After an accident, it can often take hours for first responders to locate next-of-kin, which can lead to a painful wait for loved ones,’’ said Lyn Kamerman, executive director of the Texas Telephone Association.

“Our members work with first responders and provide telecommunications services – including 911 services – across rural Texas. Saving minutes often can mean saving lives,’’ Kamerman said. “This program will help save valuable hours for law enforcement.”
FCC offers incentives to deploy broadband 
The Federal Communications Commission on May 2 announced new steps that “could result in over 1 million rural homes getting faster broadband service,’’ according to an FCC news release .  

Specifically, the FCC’s Wireline Competition Bureau extended offers of broadband support under the revised Alternative Connect America Cost Model, or A-CAM II, to 516 small rural “rate-of-return” companies in 46 states, rather than the current legacy system Connect America Fund-Broadband Loop Support (CAF-BLS) program.

The FCC said A-CAM provides a “predictable cost model’’ and the legacy system “dates to the era of voice-only service.”

In return, these carriers opting into the A-CAM II program would be required to deploy broadband on a defined schedule over the next decade at speeds of at least 25 Mbps download/3 Mbps upload to homes and businesses funded by the program. The FCC projected that if all carriers opt in to the offer, they will be required to deploy 25 Mbps download/3 Mbps upload Mbps broadband to an estimated 1,126,082 homes and businesses.

“Bridging the digital divide that separates many Americans from digital opportunity is the FCC’s top priority,’’ the FCC said in its news release. “Because of the high cost of deploying and operating broadband networks in rural areas, the FCC provides support through its universal service programs so that high-speed Internet will be available and affordable in rural communities.”

The obligation to deploy high-speed broadband will increase even for those carriers that do not accept the A-CAM II offer. Under prior rules, legacy carriers were only required to deploy 10/ Mbps download/1 Mbps upload broadband to 115,441 locations. The FCC has increased those obligations so that legacy carriers will be required to deploy 25 Mbps download/3 Mbps upload broadband to at least 600,535 locations according to the FCC’s news release.

Small rate-of-return carriers have until June 17 to decide whether to accept support under the A-CAM II program or to remain on legacy support. The FCC’s public notice includes a hyperlink to spreadsheet with details on deployment obligations.

Rate-of-return carriers receive approximately $2.4 billion each year of the FCC’s $4.794 billion in universal service support for rural broadband, and of that, the 262 companies that have already elected A-CAM support get about $607 million per year. 

TTA recommends that those members eligible to participate in the A-CAM II program to carefully consider the long-term financial impact of opting into the new program or remaining on legacy support.

Depending upon buildout obligations, spending plans, and projected depreciation expenses over the next ten years, it is possible that lower A-CAM II support is more advantageous than remaining on legacy support. The TTA team encourages members to discuss these important federal universal service fund issues with their cost consultants.
FCC addresses Lifeline fraud
The Federal Communications Commission’s Office of Inspector General on April 16 issued an advisory to Lifeline stakeholders on potential fraud within the program.

In 2017, the Universal Service Administrative Company distributed nearly $1.3 billion to telecommunications companies, or Lifeline carriers, to subsidize service to low-income households who participate in qualifying programs, such as Medicaid, SNAP and Supplemental Security Income or whose income falls below certain poverty thresholds.

A recent U.S. Government Accountability Office report, after conducting a three-year audit of the Lifeline program, indicated “companies may have an incentive to enroll as many customers as possible” after it was unable to confirm whether 36 percent of Lifeline subscribers qualified for program enrollment.

According to the OIG advisory, fraudsters have developed various tricks to evade program enrollment safeguards that should easily be identified by Lifeline providers. Some of those tricks include using various versions of a person’s name during the enrollment process including the use of generational suffixes for females (i.e., junior), which OIG said are extremely rare in the general population.

FCC’s OIG reminds carriers of their obligations to comply with Lifeline rules to ward against fraud. The FCC encouraged anyone with information regarding fraud, waste, and abuse related to any FCC program to contact the FCC’s OIG hotline to report any allegations.
In the News
(Op-ed from Lyn Kamerman, executive director of the Texas Telephone Association) 
 From the Gulf Coast to the wide-open spaces of West Texas, connecting communities with voice and high-speed data connectivity is vital to Texas’ future in an increasingly digital world. Through decades of investing millions in miles of network infrastructure crisscrossing the state, Texas telecommunications companies are making strong progress in expanding access to voice and high-speed data — or broadband — to the most remote and hard-to-reach areas.  Read more.

1.8 million Texans lack broadband Internet access, and most of them live in rural Texas. Studies from the U.S. chamber and others have shown the massive impact connecting Texas could have. This is part one of a multi-part series focusing on Connecting Rural Texas.
Unlike cities, rural areas rarely have public right of ways. So today a rural electric cooperative trying to provide broadband has to go back to each property owner where the co-op already owns poles strung with electrical cabling to ask if they can string broadband fiber-optic cable. Read more.

1.8 million Texans lack broadband Internet access, and most of them live in rural Texas. Hundreds of millions of federal dollars could become available, but the government may not have an accurate picture of who has access and who doesn't. This is part two of a multi-part series focusing on Connecting Rural Texas. 
If the total number of people in the U.S. lacking broadband internet access was a state — at around 25 million — it would be roughly the population of Texas.
But many argue the maps showing who has access and who doesn’t are wrong. And it could impact who gets money and grants to increase access. Some Texas communities are creating their own maps to correct the record. Read more.

There’s yet another front in the war between your city and state government, and it’s cable TV. It’s not on TV. It’s about TV — specifically, about where cable companies hang or bury their lines, and whether they should keep paying rent to cities for that space. Read more.

FCC chair Ajit Pai told Congress that he definitely thinks Chinese telecom tech company Huawei is a threat to national security. That came in a Senate Appropriations Financial Services and General Government Subcommittee budget hearing featuring the chairman.
He was grilled on the issue from both Sen. Chris Van Hollen (D-Md.) and Sen. James Lankford (R-Okla.). Read more.

Legislation by District 87 Representative Four Price is on its way to the governor’s desk.
Both houses of the Texas Legislature overwhelmingly passed HB 1960, with the measure garnering 127 in favor to 14 opposed on Tuesday. The  proposed bill  would create a broadband council within the office of the governor. Read more.

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