The_Mix_logo3.pngThe 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 Briefing.



Rate of Return Reform


The FCC’s Wireline Competition Bureau staff announced it will hold a webinar on April 4, 2016, from 2-3:30 EDT, to provide a summary of the reforms to the high-cost support mechanisms for rate-of-return carriers adopted by the FCC on March 30, 2016. Interested parties may register at the following link:


Among other things, that Order modernizes the universal service program for rate-of-return carriers by:

  • providing support for standalone broadband for the first time;

  • providing greater capital expenditure allowances for carriers with below average deployment, and limiting allowable investments for those with above average deployment;

  • requiring broadband deployment, based on number of locations lacking service, the cost of providing service, and support to be received;

  • reducing the allowable rate-of-return from the current 11.25% to 9.75%, with a phased transition; and

  • limiting operational and capital expenditures to help target support to those areas with less broadband deployment and adopting an enforceable $2 billion budget.


The Order also creates two paths to a Connect America Fund for rate-of-return carriers; one where a carrier voluntarily transitions from legacy rate-of-return support to model-based support (similar to the offer to price cap ILECs); and one where the carrier remains on the legacy mechanism, with some reforms. Carriers accepting model based support must deploy service providing 10 Mbps downloads/1 Mbps uploads to all funded locations, with faster 25/3 service required in areas of higher population density.


          FCC Open Meeting

At its March 31, 2016, Open Meeting, the FCC voted to: reform the Lifeline program by providing support for stand-alone broadband service (mobile or fixed) as well as bundled voice and data service packages; and adopt a Notice of Proposed Rulemaking to establish privacy guidelines for broadband Internet access service providers.  See our 4/1/16 blog FCC Votes on Lifeline and ISP Privacy.

Also at the meeting, the FCC adopted a Notice of Proposed Rulemaking aimed at updating its video description rules to expand the availability of — and consumer access to — video described programming. Among other things, the FCC proposes to: (1) Increase the required amount of video described programming on each included network carried by a covered broadcast station or MVPD from 50 hours per calendar quarter to 87.5 hours; (2) Increase the number of networks subject to the video description rules from four broadcast and five non-broadcast networks to five broadcast and ten non-broadcast networks; (3) Adopt a no-backsliding rule, which would ensure that included networks remain subject to the requirements even if they fall out of the top five or top ten ranking; and (4) Remove the threshold requirement that non-broadcast networks must reach 50 percent of pay-TV households in order to be subject to our video description rules.




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