Federal Telecom Issues

Transcription

1 Federal Telecom Issues NARUC Staff Subcommittee on Accounting & Finance March 9, 2016 Jeff Dupree Vice President Government Relations mechanical, photocopying, or otherwise, without prior written permission of NECA. 1

2 For Discussion USF reform for rate-of-return local exchange carriers (RLECs) Intended purpose Public Notice Part 32 accounting reform mechanical, photocopying, or otherwise, without prior written permission of NECA. 2

3 Who s Who at the FCC mechanical, photocopying, or otherwise, without prior written permission of NECA. 3

4 There are known knowns; these are things we know we know. We also know there are known unknowns; that is to say, there are some things that we know we don't know. But there are also unknown unknowns the ones we don't know we don't know. -- Donald Rumsfeld mechanical, photocopying, or otherwise, without prior written permission of NECA. 4

5 USF RLEC Reform 7th Reconsideration Order and FNPRM (rel. June 10, 2014) FNPRM included comment on CAF mechanisms for RLECs: Standalone broadband proposal Voluntary model support Standalone broadband support mechanism needs to: Remain within budget Distribute support equitably and efficiently Based on forward-looking costs Ensure no double recovery mechanical, photocopying, or otherwise, without prior written permission of NECA. 5

6 USF RLEC Reform Known knowns: Order to be adopted on circulation Began circulating with Commissioners on February 12 3 initial votes expected Reforms to address rate-of-return issues: Standalone broadband support Incentives for broadband investment to connect unserved customers Strengthen rate-of-return system for certainty and stability mechanical, photocopying, or otherwise, without prior written permission of NECA. 6

7 USF RLEC Reform More known knowns: Two paths: rate-of-return and model-based support ROR path: ROR to transition from 11.25% to 9.75% over 6 years Include support for standalone broadband Limitations for CAPEX, OPEX and unsubsidized competitor Election of model-based support to be voluntary Based on Alternative Connect America Cost Model (A-CAM) 10-year term Each path to have build-out obligations to unserved locations mechanical, photocopying, or otherwise, without prior written permission of NECA. 7

8 USF RLEC Reform Known unknowns: Details, details, details When various provisions will go into effect Build-out obligation thresholds for both ROR and model paths Criteria for determining unsubsidized competitor for ROR path Timing/process for electing model path Use/amount of CAF reserves for model path mechanical, photocopying, or otherwise, without prior written permission of NECA. 8

9 USF RLEC Reform Unknown unknowns: Implementation issues Problems? Errors? Further Notice of Proposed Rulemaking (FNPRM) issues mechanical, photocopying, or otherwise, without prior written permission of NECA. 9

10 USF Intended Purpose Public Notice Public Notice released on October 19, 2015 (FCC ) Reminder to eligible telecommunications carriers to use support only for intended purposes : Provision, maintenance and upgrading of facilities and services... any other purpose is misuse likewise... inclusion of inappropriate expenses for recovery by ratepayers. State commissions urged to look carefully at information provided to them when certifying as ETCs Some expenses noted include: personal travel/expenses, alcohol, gifts, membership fees/dues, political contributions More addressed in FNPRM? mechanical, photocopying, or otherwise, without prior written permission of NECA. 10

11 Part 32 Reform Reform of uniform system of accounts used by telcos Notice of proposed rulemaking (Aug. 20, 2014) Larger companies seeking to fully align Part 32 with Generally Accepted Accounting Principles (GAAP) Typically not subject to federal rate regulation Received forbearance from most cost reporting Smaller companies still subject to on-going federal regulation for rate, USF Ensure no unintended consequences mechanical, photocopying, or otherwise, without prior written permission of NECA. 11

12 Other Challenges/Opportunities... Spectrum auction Court challenges: Net Neutrality, Muni Broadband Broadband Lifeline support for low-income consumers IP Transition: TDM-to-IP/Copper-to-fiber Rural broadband experiments Call completion Congress/legislation mechanical, photocopying, or otherwise, without prior written permission of NECA. 12

13 Questions? mechanical, photocopying, or otherwise, without prior written permission of NECA. 13