The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.
The FCC announced that $200 million in unused Schools and Libraries Universal Service funds will be carried forward to ensure funding is available for all eligible priority one funding requests received from schools and libraries in Funding Year 2014 in excess of the annual cap. On March 28, 2014, the FCC announced that the E-rate program funding cap for Funding Year 2014 is $2,413,817,693. On April 17, 2014, USAC submitted an estimate of demand for the E-rate program for Funding Year 2014 (July 1, 2014, to June 30, 2015) which included an estimated demand for priority one services (telecommunications, telecommunications services and Internet access) of $2.630 billion. USAC’s initial demand estimate is always higher than the commitments ultimately made by USAC because some applicants withdraw requests for funding and other requests are adjusted downward after review. Accordingly, USAC estimated that to fully fund priority one services it would need $200 million more than the Funding Year 2014 cap.
The FCC extended the deadline for submitting applications for certification to participate in the National Deaf-Blind Equipment Distribution Program (NDBEDP) pilot program for Nebraska to May 20, 2014. The original date was May 6, 2014. See the Regulatory Mix dated April 23, 2014. The deadline was extended to allow additional time for interested applicants to apply and to provide for maximum variety in the applicant pool from which to select an entity that can effectively fulfill the NDBEDP’s mission.
Guidance on High Cost Support Mechanism
The FCC provided guidance on the Universal Service Administrative Company’s (USAC) outstanding policy questions related to two aspects of the universal service high-cost support mechanism: document retention requirements and income taxes attributable to S corporations. First, the FCC clarified that, absent evidence of waste, fraud, and abuse, USAC should not take any further action against carriers for document retention inadequacies during time periods when there was no document retention rule in effect. (Effective January 23, 2008, §54.202(e) of the FCC’s rules required that recipients of high-cost support retain, for at least five years, all records required to demonstrate to auditors that the support received was consistent with the high-cost program rules.) The letter enumerates some of the factors that may suggest the presence of waste, fraud, and abuse. Second, the FCC clarified that USAC should allow rate-of-return carriers structured as S corporations to include in their revenue requirement the income taxes paid by their shareholders that result from their ownership of the corporation’s equity. Because these carriers receive high-cost support based on their revenue requirement, the inclusion of these taxes will result in these carriers receiving an income tax allowance from high-cost support.
TELECOM & ENERGY
The PUC of Texas released bill inserts for utilities to use during the 2014 hurricane season. The bill inserts must begin in June and end in November. They are intended for residential customers who live in the five hurricane evacuation zones. TMI Regulatory Bulletin Service subscribers see Texas Bulletin dated 5/2/14.