Texas Carriers Propose Rule to Prevent E-rate Fiber Overbuild

On May 22, 2019, a coalition of Texas Carriers (Central Texas Telephone Cooperative, Inc., Peoples Telephone Cooperative, Inc., and Totelcom Communications, LLC) called on the FCC to act against what they called the “overbuilding” of USF-supported fiber networks.  The coalition’s primary concern is that E-rate funds are being used to overbuild or duplicate existing USF-supported networks.  The Texas Carriers petitioned the FCC to initiate a rulemaking to address this omission.

To address their concerns, the Texas Carriers propose amending the rules to prohibit the use of USF funds for the construction of fiber networks that overbuild existing fiber networks.  Under the Texas Carriers’ proposed rule, special construction applicants would be subject to a 60-day challenge period, during which time service providers would have the opportunity to demonstrate that existing networks could provide the required fiber connection.  Applicants would then be eligible for USF support if, after the challenge period, they could affirm that no existing fiber facilities existed for their proposed fiber network.  The proposed rule would also prohibit the use of USF funds to construct new fiber for any portion of the proposed network where it is demonstrated that fiber already exists.  The Texas Carriers believe the proposed rule will reduce wasteful and inefficient use of E-rate program funds and free up more funding for schools and libraries that need fiber broadband connections.

When a party submits a request for a rulemaking, as these carriers have done so here, Commission rules require it to seek comment on whether it should initiate a rulemaking.  Then the Commission would decide whether to grant the petition and seek comment on the adoption of the proposed rule or a revised version of the proposed rule.