After the Texas Legislature left Austin at the end of May, we have moved into the quiet summer months.
In cities and towns across Texas, local telecommunications companies and employees continue to make their communities a better place to live and to work. State telecommunications companies not only make financial and in-kind donations to numerous local charitable organizations, employees also volunteer thousands of hours of their time each year in local communities.
We are readying plans for the Texas Telephone Association Convention and Product Showcase set for August 25-28 in San Antonio. I hope you plan to join us at that event where we will be discussing some of the more pressing issues impacting the telecommunications industry today.
At the same time, the regulatory wheels continue to turn in proceedings at the Public Utility Commission of Texas and at the Federal Communications Commission on issues impacting the state’s telecommunications industry. There are a few items of note.
TTA and TSTCI jointly file waiver petition on five-year network improvement plans
The Texas PUC currently requires recipients of state high-cost universal service support to prepare and file a five-year network improvement plan and update it annually in an effort to ensure transparency and accountability in how recipients use state support. When originally adopted, this rule mirrored the federal requirements for recipients of federal high-cost support. However, in 2016 the FCC eliminated the mandate to file federal five-year network improvement plans and adopted a new reporting requirement for federal high-cost recipients to report broadband capable locations.
In 2017, the Texas Telephone Association and the Texas Statewide Telephone Cooperative Inc. worked together to seek a waiver of the state requirement to file five-year network improvement plans because such plans were no longer required by the FCC. The PUC granted a temporary two-year waiver, which expired this year and TTA and TSTCI filed a new joint
waiver request and a petition for rulemaking
on asking the PUC to permanently eliminate the requirements.
The commission has not taken action on this request. Given the recent focus on broadband availability during the last session of the Texas Legislature, TTA encourages members to develop network improvement plans to demonstrate to state policy makers how members plan to use state universal service support to expand and improve broadband availability.
Virgin Mobile Lifeline application still pending
Virgin Mobile’s application to provide expanded Lifeline services in parts of Texas is still pending at the Texas PUC.
The PUC was scheduled to make a final decision on Virgin Mobile’s application to be designated an Eligible Telecommunications Carrier (ETC) and Eligible Telecommunications Provider (ETP) that would allow Virgin Mobile to receive state low-income support for Lifeline customers in certain areas on June 17. However, the item was unexpectedly pulled from the agenda at the last moment.
Virgin Mobile previously agreed to extend until July 1 the PUC’s jurisdictional deadline to issue a final decision – but that deadline has now passed leaving the case in regulatory limbo.
Sprint on June 28 filed
tariff revisions
on behalf of Virgin Mobile in Tariff Control No. 42242 to expand its Lifeline service areas in Texas with a requested effective date of July 1, apparently in anticipation of Virgin Mobile receiving the go-ahead to expand its Lifeline services. The Texas PUC staff on July 8 filed
comments
in the Virgin Mobile case and indicated the commission will consider the case during the July 18 open meeting with staff indicating its position that Virgin Mobile’s tariff is not currently effective.
It is unclear whether Virgin Mobile’s attempt to file a tariff change to expand its Lifeline services in certain parts of Texas before the commission approves the expansion will have any negative impact on the company’s still-pending request. We will continue to monitor developments in the case as it moves toward final resolution.
Texas PUC still reviewing SB 586 reports
The Texas PUC staff continues to review Texas telecommunications companies’ reports under SB 586 that was adopted by the Legislature in 2017. But those reviews are occurring at a slow pace.
The PUC staff has recently filed several amended recommendations related to many Texas telecommunications companies’ reports. While the details of those amended recommendations are contained in confidential staff memos, we understand most of the changes are related to correcting errors regarding federally-authorized rate of return benchmarks. Only a few of the recommendations resulted in a change in earnings categories for members.
We continue to await final action from the commission on staff recommendations. We are aware some members are already preparing the necessary paperwork to apply for increases and that individual companies are working with commission staff to streamline Texas universal service fund adjustment filings.
We will continue to alert our membership of developments.
Texas telecommunications companies seek federal E-Rate rule changes
Texas telecommunications companies push for changes in the E-rate program is moving forward at the Federal Communications Commission.
Central Texas Telephone Cooperative, Peoples Telephone Cooperative and Totelcom Communications filed a
petition
on May 22 with the FCC to urge the commission to initiate a rulemaking proceeding to consider change the E-rate program competitive bidding requirements to include safeguards that discourage overbuilding of existing federally supported fiber networks.
The Texas companies expressed concern about the use of E-Rate funds to overbuild existing networks that have been constructed using other universal service or government funds and proposed several rule changes.
Initial comments of support were filed this month by numerous local phone companies in Texas, Arizona, Georgia, South Carolina and Michigan. In addition, several industry associations supported the petition, including the Oregon Telecommunications Association, Washington Independent Telecommunications Association, NTCA, USTelecom and WTA – Advocates for Rural Broadband. Supporting comments generally provided additional examples of overbuilding and the challenges of small rural carriers in bidding on requests for proposals covering large regions. NTCA’s comments also repeated concerns raised during the E-rate modernization proceedings in 2014 and called for steps to be taken to bring the federal universal service fund’s high-cost program and the E-rate program into harmony with each other.
Some opponents to the rule changes include several E-rate consortia, consulting firms, education and technology associations that argue the changes would harm competition, create higher prices for affected schools and add a lengthy challenge and negotiation process to an already lengthy E-rate funding process. Opponents said the existing rules are working well and there is insufficient evidence to support rule changes. In addition, some of the opposing comments filed, such as those filed by Education Superhighway, charge the petitioners with “submitting bureaucratic proposals to Washington instead of submitting bids.”
Any Texas company planning visits to Washington D.C. should consider adding this issue to their agenda for discussion with staff. FCC Chairman Ajit Pai and Commissioner Michael O’Rielly have vocally opposed the E-rate Modernization efforts enacted in 2014. Commissioner O’Rielly, in particular, has continually criticized Universal Service Administrative Company’s processes for evaluating special construction funding requests as well as the use of E-rate funds to overbuild networks funded by high-cost support.
We will continue to monitor this important issue.
FCC provides more insight into broadband testing
The FCC published a
notice
in the Federal Register on June 7 on broadband speed and latency testing and reporting requirements. The FCC in May delayed the requirement for carriers to implement broadband testing during the third quarter of 2019 until the first quarter of 2020 while the FCC works on some of the outstanding technical aspects of how testing will be implemented.
One of those technical issues to be addressed was how locations would be randomly selected by Universal Service Administrative Company for carriers to test for speed and latency compliance. The FCC’s notice indicated carriers will be required to identify the locations where they have an active subscriber and the USAC will then select a random sample from which the carrier will be required to perform broadband testing.
We will continue to monitor developments related to broadband testing and will alert our members of any significant new developments.
