FCC USF Order Under Siege in 10th Circuit over State Preemption, Broadband Obligations
The 10th U.S. Circuit Court of Appeals must “invalidate this FCC regulatory ‘gun to the head'” that is the FCC’s November 2011 USF order, a coalition of regulators, telcos and consumer advocates said. NARUC led the charge on In re: FCC 11-161 two briefs representing multiple parties, which attacked the FCC on several fronts Tuesday (http://xrl.us/bnvuhd). The ongoing court case challenges the year-old order. The attack was one among many in the 10th Circuit this week. Industry forces weighed in with briefs assailing the FCC for its stances on VoIP and other elements of the order that let the fund pay for broadband and not only phone-service deployment.
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"The FCC’s effort to rewrite the [Communications] Act flounders under any careful examination of the unambiguous statutory text, legislative history, and controlling precedent,” said joint petitioners NARUC and others. “The FCC replaces State rate law and broadband network deployment benchmarks with federal mandates that force States to act -- even though not even Congress can force a State to regulate."
The FCC reform “supplants” these state rate decisions “in arbitrated agreements with an FCC-set rate of zero,” the petitioners said. In establishing rates, the FCC has overtaken “a task assigned by Congress to the States,” and the order should be vacated, they argued. It raises “serious Constitutional questions,” they said. NARUC was liaison counsel for a group including the Arizona Corporation Commission, Choctaw Telephone Co., Core Communications, Kansas Corporation Commission, several dozen telcos, and for certain parts of the filing the National Association of State Utility Consumer Advocates, tw telecom, CenturyLink and the state commissions of Connecticut, Pennsylvania, Virginia, Vermont, Ohio and Montana. The FCC order “eviscerates State authority over ICC [intercarrier compensation] arrangements for the stated goal of ensuring broadband service is widely available,” the filing said. Any “plain text reading” of law should exclude intrastate access from reciprocal compensation, and the FCC lacks the authority to preempt states on intrastate access and intrastate originating access, it said. The FCC’s legal arguments aren’t persuasive, the brief said. “The FCC’s ex parte process is so deficient as to constitute a denial of due process.”
The FCC provided “no coherent rationale for treating wireless-bound calls worse than VoIP-bound calls during this lengthy transition,” AT&T said. “The new VoIP access charge rule would unjustifiably impair the competitive position of wireless carriers vis-à-vis their cable VoIP competitors.” AT&T believes the government should “keep calls to cellphones on the same footing as calls to cable VoIP subscribers,” it said.
The FCC lacks “express authority” for its broadband plan, several carriers said. “Its actions constitute a bald arrogation of power not conferred by Congress that will result in the annual misappropriation of $4.5 billion of consumer-provided USF support.” The commission “lacks jurisdiction to redirect USF funds to broadband or to regulate broadband,” said Cellular Network Partnership, C Spire Wireless, DOCOMO Pacific, Nex-Tech Wireless, PR Wireless and U.S. Cellular. A second joint filing from NARUC and several telcos made the same point about “unlawful” broadband obligations: “The added unfunded burden of satisfying the broadband condition threatens the viability of rural carriers and the vital services they provide to rural consumers.” The Gila River Indian Community and Gila River Telecom attacked the FCC’s broadband obligations, too, calling them in their joint brief “blinking reality” and irrational rather than a sign of “efficiency.”
"The Commission’s once-in-a-generation reforms that created the Connect America Fund are delivering broadband to rural Americans who lack access while at the same time imposing much-needed fiscal discipline on the fund,” an FCC spokesman said in response. The order is legally sound, he said earlier about NASUCA’s challenge to the commission’s authority to implement access recovery charges (CD Oct 24 p11).
The second joint filing of NARUC and telcos also slammed the “predictability problem” of USF support and the FCC’s new quantile regression analysis: “A carrier simply cannot know from year to year which investment or expenses will be supported and which will not.” NARUC and other national groups loudly stressed these concerns for months (CD Oct 9 p2). The FCC failed in determining its support levels and in its “one-size-fits-all treatment of rate-of-return carriers,” Gila said.
Voice on the Net Coalition, representing VoIP interests, attacked the FCC’s no-blocking obligation. That obligation is for “IVoIP and one-way VoIP providers to refrain from blocking telephone traffic,” the coalition said. It’s “arbitrary, capricious, and an abuse of discretion” and “exceeds the FCC’s jurisdiction and authority under the Act,” VON said. The 10th Circuit should vacate the order, Transcom Enhanced Services said. “The FCC is acting under the statute it wishes it had, not the statute it has.” The commission is “conflating the distinctly different rights, duties, and obligations assigned to carriers on the one hand and end-users on the other” and is trying to “so casually assign the duties of one on the other, or confer the benefits of one on the other, in the absence of specific authority,” it said. Transcom said it’s an enhanced service provider, not a carrier but an end-user, an identity debated in several state commission rulings against the company which it then appealed in court (CD Oct 17 p9).