June 2018
News and Updates
Here are some updates from the Texas Telephone Association. View as Webpage
Update from Executive Director Lyn Kamerman
Proposed Texas PUC rules to implement Senate Bill 586 moving forward
The Public Utility Commission of Texas on May 25 approved for publication staff’s proposed rule in Project No. 47669 to enact universal service funding reform for smaller telecommunications providers in Texas.

The proposed rule has been published in the Texas Register with initial formal comments due on July 9 and reply comments due on July 20. 

Representatives from the Texas Telephone Association and the Texas Statewide Telephone Cooperative Inc. have been working with commission staff and industry stakeholders on comments and reply comments as well as revisions to the instructions and reporting forms for the new enhanced earning monitoring reports that will be filed with the PUC by companies opting into the Senate Bill 586 universal service mechanism. 

The TTA Regulatory committee met on June 11 to discuss the first draft of those comments.
In there are a few other related matters of interest at the Texas PUC, including:
  • Recipients of Connect America Fund-Intercarrier Compensation (CAF-ICC) support are required to file CAF-ICC data and certifications with the Texas PUC when they submit their annual federal access tariff filing under federal rules. The Texas PUC has established Project No. 48406 for price cap carriers to submit CAF-ICC data and certifications and Project No. 48407 for rate of return carriers.

  • Recipients of high cost loop support and frozen high cost model support are required to report to the Federal Communications Commission and the Universal Service Administrative Company any residential lines with local rates – including any mandatory Extended Area Service fees and state Universal Service Fund fees – that are below the FCC’s local rate floor of $25.50. Recipients of funding under the Alternative-Connect America Cost Model (A-CAM) are no longer obligated to report lines below the FCC’s local rate floor. TTA reminds members they should file copies of these federal reports with the Texas PUC no later than July 2. The Texas PUC has established Project No. 41583 for companies to submit local rate floor compliance reports. 
Association News
Legislative Update – John Hubbard and Ian Randolph
We are only seven months away from the start of the regular session of the 86 th Texas Legislature and the budget situation is becoming a little clearer. Unfortunately, the picture is far from rosy.
The largest portion of the two-year state budget is dedicated to public education and there are some high-dollar needs in that area. Each year, Texas adds about 90,000 new students to its classrooms — the equivalent of adding an entire Fort Worth Independent School District each year. Under current funding formulas, the cost of these additional students to the state is projected to amount to about an additional $1 billion per year just for enrollment growth. When you take into account other portions of the funding formulas that are tied to variable property values, it will mean an additional cost of another $1 billion per year in state funding. In addition, new funding for special education services will cost about $1 billion per year. It all adds up to the need for an additional $6 billion in state funding for the two-year 2019-2020 budget cycle.
In addition, a recent report by the Texas Comptroller for Public Accounts  has identified the need for additional funds for transportation. Specifically, that report says Texas will need about $21 billion in additional transportation funding between now and 2040 to keep current roads in a “good state of repair.” That represents almost $1 billion a year more than current transportation expenditures and more than twice as much funding as the state currently anticipates for that time frame.
Of course, funding for education and transportation don’t take into account funds needed for rebuilding after Hurricane Harvey. Through the end of April 2018, state agencies and institutions of higher education have spent about $2.2 billion for hurricane relief. However, there are projected costs of about $4.6 billion through the end of the current 2018 fiscal year. It is very possible that the state will need a supplemental budget item to deal with some costs in the current budget cycle. However, repairs not addressed in the current budget will have to be funded in the 2019-2020 budget. How much of that will be will depend to a large extent on the amount of federal funds that will be made available to Texas.
The good news is that oil prices have been on the rise over the last year which has spurred an increase in oil and gas production. This increased production will result in increased revenue to the state through the oil and gas excise tax. Some estimates are showing that the state will collect $1.4 billion more from the oil and gas excise taxes than budget writers had previously anticipated which will clearly be welcome additional revenue when the budget committees meet to craft the 2019-2020 budget.
We will continue to keep you up to date on all the happenings here in Austin. Please let us know what you’re hearing or if you have any questions. We’re here to help.
Sen. Brian Birdwell to address TTA Convention and Product Showcase
Registration is open for the Texas Telephone Association Convention and Product Showcase set for Sept. 9-12 at Horseshoe Bay Resort.

State Sen. Brian Birdwell, R-Granbury, will provide the keynote address the morning of Sept. 11. Birdwell serves as chairman of the Senate Committee on Nominations and is a member of the Senate committees on Finance, State Affairs and Criminal Justice. In addition to these duties, Birdwell serves as chairman of the Sunset Advisory Commission, a joint, bipartisan committee working to identify and eradicate inefficiency, waste and noncompliance within state government. His biography can be found here .

A complete agenda and registration information on the TTA convention can be found online here . A complete agenda and registration is available for download here .
Registration now open for JSI fall financial seminars
Registration is open for JSI’s fall 2018 financial seminars to be held in Nashville, Tennessee, in September
JSI’s "Part 32 & Part 64 Accounting Seminar” will be held on September 25 and will provide a detailed review and explanation of the Federal Communications Commission’s Part 32 and Part 64 accounting principles and applications. JSI staff will discuss and analyze specific issues raised by the Federal Communications Commission’s recent changes to accounting procedures, including detailed discussion of “allowable” expenses.

JSI’s "Separations & Access Seminar’’ will be held on September 26 and will focus on responding to today’s broadband network and services as well as cost settlements, regulated and non-regulated allocations, jurisdictional categorizations, access procedures, and intercarrier compensation. This year’s seminar will include the latest perspectives on the FCC’s recent order on Universal Service Fund changes.

For more information about CPE credits, hotel and to register, visit the JSI website . Early bird discounts are available through July 1.
Member Spotlight
With a new name, BBT focuses on future

With an evolving telecommunications industry and a focus on the future, Big Bend Telephone Company has changed its’ name to BBT.
The new BBT – which includes Big Bend Telephone and its affiliate Big Bend Telecom – are focusing on growth.
“As our family of companies continue to evolve and change with the expectations and needs of our customers, so does our name. BBT combines the past with the present and takes us into the future of communications, ’’ said Russell “Rusty’’ Moore, BBT’s general manager and chief operating officer.
“It is part of this huge cultural shift that we initiated internally,’’ Moore said. “We began really focusing on changing our spots and changing the way we looked at ourselves – where we wanted to go and where we needed to be.’’

Founded in 1960, BBT is a third-generation, family-owned company based in Alpine. BBT’s service area spans some 17,594 square miles, which is larger than nine states. With a solid team of 54 employees, BBT serves about 5,000 access lines – some .25 customers per square mile – in an area characterized with rocky, mountainous terrain and unpaved roads. BBT serves some 485 miles of the Texas-Mexico border.
BBT through its incumbent local phone company provides voice and advanced broadband services to consumers, businesses, schools and state and federal government customers throughout the Big Bend region. BBT’s competitive local exchange carrier affiliate provides advanced services such as broadband, Voice over Internet Protocol (VoIP), hosted voice solutions, metro ethernet and managed network services. As BBT grows, it has expanded and now serves Alpine, McCamey, Fort Stockton, Valentine, Fort Davis, Marathon, Marfa, Del Rio, Eagle Pass, Terminal and Uvalde.

With the business challenges that come with serving a rugged and sparsely populated region, BBT is deploying cost-effective strategies, equipment, and technology to provide voice and broadband service. BBT continually looks for ways to scale and adjust its staffing to meet the evolving demands of its business. One strategy is to deploy highly skilled contractors to construct larger fiber projects. This approach keeps full-time staff at a minimum while not compromising the integrity of the network investment.
“We are promoting and investing in fiber-based technologies,’’ Moore said. “We’re using everything but the kitchen sink to get advanced services to customers.’’
BBT operates a network that mixes copper, fiber, fixed wireless and satellite to provide high-speed broadband services throughout the craggy terrain. BBT has invested in more than 3,700 route miles of fiber and copper networks throughout its service area.
“Broadband service is extremely important to our customers because cellular service is not there over the vast majority of our territory,’’ Moore said.

In the Big Bend region – also known as the Trans-Pecos region – mobile phone service is spotty. BBT’s fiber network provides support for data and communications in the area, carrying wireless traffic via wired backhaul connections linking cell towers to voice and data networks that support everything from voice calling to machine-to-machine connections that make up the so-called Internet of Things.
“We don’t make mobility. We just make mobility better,’’ Moore said. “Our fiber networks bridge the digital divide and give rural 5G services a chance of becoming reality.”

BBT also provides technology and communications infrastructure to support the federal and state institutions securing the border between the United States and Mexico. In addition to numerous checkpoints and U.S. Department of Homeland Security installations BBT also supports two ports of entry on the Texas-Mexico border – a crossing at Presidio and an immigration station located in Big Bend National Park between Presidio and Del Rio. The immigration kiosk at Boquillas Crossing is supported by fiber networks and transmits data to border agents in other locations who check travelers’ documents.
In looking at the future, Moore is continuing to invest in infrastructure to support growth. “We have to grow,’’ Moore said. “We have to get outside our study area and outside of our comfort zone to remain viable.’’

BBT invests an average of 16 percent of gross revenues each year on fiber technologies and advanced communications services. This year, BBT is expected to invest about $5.2 million in deploying fiber and advanced communications technology.
In looking at the future of rural telecommunications, Moore said rural local phone companies must adapt and become more nimble and efficient to meet the demands of today’s telecommunications industry.

“Looking at the future, we are all truly startups with a rich history,’’ Moore said. “The future is going to look wildly different than our origins. If we are hanging our hat on the past, we are dying on the vine.’’
In the State and Around the Nation
Gov. Abbott appoints Shelly Botkin to Texas PUC
Texas Gov. Greg Abbott recently appointed Shelly Botkin to the Public Utility Commission of Texas.

Botkin, director of corporate communications and government affairs for the Electric Reliability Council of Texas, was appointed by Abbott to fill a vacancy on the three-member panel.

Botkin replaces commissioner Brandy Marty Marquez who resigned from the commission earlier this year. The term is scheduled to expire Sept. 1, 2019.

ERCOT manages the flow of electric power to 24 million Texas customers which represents about 90 percent of the state's electric load. The PUC regulates the state's electric, telecommunication, water and sewer utilities.

Botkin, who has worked at ERCOT since 2010, received a bachelor of arts in anthropology from Washington University in St. Louis.
FCC’s requires disclosure for Internet Service Providers
The Federal Communications Commission’s  Restoring Internet Freedom Order requires all Internet Service Providers to make certain disclosures related to their Internet services either through updated policies posted on their websites or through the FCC’s ISP disclosure portal . The order was effective June 11.
Under the FCC’s order, ISPs are required to disclose network management practices such as blocking, throttling, traffic prioritization --either paid or for any affiliates – as well as congestion management practices, application-specific behaviors, device attachment rules and security efforts. ISPs also are required to disclose network performance characteristics and describe commercial terms for services. TTA encourages its members to review Internet terms and conditions to ensure compliance with the new FCC disclosure requirements.
FCC poised to act on rural USF contribution reforms
The Federal Communications Commission on June 7 took under consideration an order that exempts rural incumbent local exchange carriers from contributions to the federal Universal Service Fund for broadband Internet services.
Currently, most large broadband providers do not pay federal USF charges on broadband Internet transmission service revenues. However, because most small ILECs continue to offer wholesale digital subscriber line service to ISPs on a common carrier basis, those small ILECs have been obligated to pay into the federal USF program based on revenues associated with those wholesale broadband Internet services. If approved by the FCC, the order will eliminate discriminatory treatment against small ILECs and place them at parity with larger broadband providers who are currently exempt from such federal fees.
For most small ILECs, federal USF charges associated with broadband Internet transmission service are the largest component of their federal USF assessments and these companies could see significant expense reductions. However, without meaningful USF contribution reform and as fewer and fewer providers and services are subject to federal USF contributions, we can expect to see continued rate increases.
In the News
The Texas Telephone Association recently awarded $48,000 in four-year scholarships to six Texas high school students entering college in the fall 2018 semester, including Wesley Sanders of Lexington High School. Wesley will be attending Texas A & M University and plans to major in Business. Read more.

Fifty-eight years ago Neville Haynes recognized the need for communication in west Texas and filled out an application to the Motorola Corporation he found in a magazine. In answer to that application, coupled with Neville’s determination to serve the people of the Big Bend region, an FCC license was granted and in 1960 Big Bend Telephone Company was born. Read more.

BORGER, Texas – The state of the world has rapidly been changing to become intertwined with a basic need for reliable and fast internet access. State Representative Four Price and State Senator Charles Perry were joined by Thomas Visco, Blake Hudson, Amanda Barrera, and Nora Belcher for a town hall panel discussing the issue of broadband internet access in rural Texas. Read more.

A contractor building high-end houses in Minneapolis swung by Greg Hull’s sawmill on Friday, a timber operation located in deeply rural Lake County, Minnesota. The builder had seen Hull’s website and driven nearly 250 miles to the mill to inspect Hull’s high-end lumber as potential building material for his homes. These days that’s not unusual. In the past year-and-a-half, Hull has seen orders balloon and interest grow, and a significant factor is his recent ability to gain access to high-speed internet. Read more.

Republican-backed bills have been introduced in the House and Senate to ensure that government money targeted to subsidize rural broadband, a White House and FCC priority, is not going to overbuild existing service. The Reprioritizing Unserved Rural Areas and Locations (RURAL) for Broadband Act of 2018 has been introduced in the House by Rep. Kevin Cramer (R-N.D.) and the Senate by Sen. Steve Daines (R-Mont.), two states that are about as rural as they get. Read more.

A majority of FCC commissioners have voted to boost the Universal Service Fund's Rural Health Care Program by $171 million, according to FCC chairman Ajit Pai. The program is a Universal Service Fund subsidy for broadband-facilitated diagnosis and treatment. Read more.

The FCC has voted not to apply rules that make certain small rural broadband providers pay into the Universal Service Fund based on their broadband customers, a move billed as helping close the rural divide, lower consumer broadband costs, and perhaps put to rest questions of whether the FCC will start making ISPS pay into the USF based on their broadband service. Read more.

As planned , a set of 2015 Open Internet protections known as "net neutrality rules" has now expired, causing reaction across the web; according to internet experts, however, the impacts of this change won't be felt by consumers -- nor affect the battle for digital rights and control -- for at least a while longer. Today, the Obama-era protections were officially repealed as per the schedule of the Federal Communications Commission (FCC), which voted to repeal the rules in December along party lines. As  CNNMoney  reported, the order to abandon the rules required approval from the Office of Management and Budget, which the FCC reportedly received last month. Read more.

Microsoft is looking at investing $1 million to $2 million in West Virginia as part of a rural broadband expansion initiative, according to the head of the state Broadband Enhancement Council. Chairman Rob Hinton said at a council meeting Thursday that the technology giant “will be pushing very hard” to partner with an internet service provider in West Virginia for its Rural Airband Initiative once the program’s new fiscal year kicks off in July. Microsoft announced last week that West Virginia is among the states it is targeting for the initiative, which debuted last year. The technology giant has said it wants to partner with and give funding to internet providers, instead of jumping into competitive markets by itself. Read more.

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