The digital divide is the FCC's “top policy priority” and the Connect America Fund reverse auction is “a milestone” in modernizing a key USF program, FCC Chairman Ajit Pai told an American Cable Association conference Wednesday. Pai slammed Title II Communications Act regulation of broadband service, which he said was the result of “Silicon Valley giants” claiming small ISPs such as ACA's members “posed a greater threat to a free and open internet” than Google, Facebook and Twitter.

The FCC approved Shentel's request to give up nTelos' USF eligible telecom carrier status in Virginia. When it acquired nTelos, Shentel agreed to assign Sprint all the spectrum licenses held by nTelos, plus certain spectrum leases nTelos acquired, said a Wireline Bureau order Tuesday in docket 09-197. It said Shentel indicated it will continue to manage the former nTelos wireless network "through its affiliate relationship with Sprint, and Sprint will continue to provide service as a non-ETC in these areas." Shentel also indicated it provided advance notice to nTelos' Lifeline customers "to migrate to the Assurance Wireless Lifeline service, which continues to be offered throughout the former [nTelos] service area; thus, any affected Lifeline customers will continue to be served by an ETC," the order added.

FCC Commissioner Mignon Clyburn said the digital divide will grow wider if the agency's recent Lifeline USF proposals are implemented, adding to the net neutrality reversal. The proposals "would establish punitive caps on the Lifeline program, and effectively remove mobile wireless options from the program by banning wireless resellers from participating in Lifeline," she said in remarks prepared for delivery to The New School's Digital Equity Lab in New York City. "To destroy or weaken a program, that so many Americans rely on as their only means to dial 911, do their homework, or find a job, is not putting #ConsumersFirst, is heartless and I am hopeful that by giving voice to such a regulatory wrong, will derail this wrong-headed effort." The FCC's net neutrality repeal will allow "a handful of multibillion-dollar corporations" to "use this regulatory-free zone of opportunity, to disadvantage those without deep pockets, including consumers and small businesses," she said, also citing "a devastating effect on consumer privacy." The Lifeline proposals and net neutrality repeal "will actually widen digital and opportunities divides," she said, calling for allies to rally and “turn the tide.”

A court set a briefing schedule on Lifeline USF resellers' challenge to an FCC order targeting enhanced tribal support to "facilities-based" service and restricting support to "rural" tribal areas under a new definition (see 1801290020). The brief of petitioners is due April 25, the FCC's is due June 11, and petitioners' reply is due June 25, said an order (in Pacer) Friday of the U.S. Court of Appeals for the D.C. Circuit in National Lifeline Association et al. v. FCC, No. 18-1026. NLA, a trade group representing Lifeline providers and vendors, was joined on a petition by Assist Wireless, Boomerang Wireless (enTouch) and Easy Telephone Services.

An FCC order on a FairPoint Communications petition was sent to commissioners last week, said the agency's circulation list updated Friday. An agency spokesman said the draft order and declaratory ruling addresses a FairPoint petition from December 2015. FairPoint, bought by Consolidated Communications in 2017, sought to recover annual costs it said were being blocked by rules barring "duplicate recovery" of price-cap USF support and rate-of-return intercarrier compensation. FairPoint said there was no duplicate recovery, and $3.5 million in ICC transition support had been improperly deducted in 2015, with amounts edging down in subsequent years (see 1512110070 and 1703060046).

USF rural healthcare subsidies will be cut 16 percent to individual providers and by 26 percent to consortia for the 2017 funding year ending June 30, said the Universal Service Administrative Co. Because RHC fund demand in recent years exceeded an FCC $400 million annual cap, pro rata cuts have been applied to providers. The commission in December waived the cap for this year (see 1712140054). The order "directed USAC to use any unused RHC Program funds from prior funding years to offset the proration for individual rural health care providers (HCPs), and afterwards for consortia if there were funds remaining," USAC said. "After applying these unused funds to individual HCPs, there were not sufficient funds to offset the proration for consortia as well. So, as per the FCC Order, only individual HCPs will receive this prior year funding. USAC will commit the unused funds, which amount to $31.35 million, for individual HCPs in both the Telecommunications (Telecom) and Healthcare Connect Fund (HCF) programs." The proration factor for consortia in the HCF program is 74.47 percent, and for individual HCPs in both programs is 84.4 percent, it said. The Schools, Health & Libraries Broadband Coalition is "extremely disappointed" with cuts exceeding last year's 7.5 percent reduction, said Executive Director John Windhausen, citing market changes driving demand. "When rural Americans are struggling to obtain high-quality Internet connections and are also suffering from the closure of rural hospitals, the announced funding reductions -- which will lead to price increases for health care providers across the country -- will have a devastating impact on the quality of rural healthcare," he said, urging the FCC to "substantially increase" the cap for FY 2018. Numerous NPRM commenters backed a funding increase, though some said reforms were needed first (see 1802050026 and 1803070043).

With a lack of electricity and access to funding hampering recovery efforts for communications services in Puerto Rico and the U.S. Virgin Islands, some concerns about the FCC USF-based aid proposal have emerged, industry and government officials in Puerto Rico, the U.S. Virgin Islands and Washington told us. Some industry officials expressed concern about the proposal's goals and said the plan does nothing for affected broadcasters. A group of Puerto Rico broadcasters pitched a nationwide disaster relief plan for broadcasters to Chairman Ajit Pai during his visit earlier this month. “What happened in Puerto Rico can happen elsewhere in the U.S.,” said Eduardo Rivero of Puerto Rico station owner Media Power Group.

A California Senate panel is expected to hear net neutrality legislation by Sen. Scott Wiener (D) in early April, his office said Wednesday. Wiener summarized amendments to SB-822 in a fact sheet. The amended bill would prohibit “blocking or speeding up or slowing down of favored data, paid prioritization, charging services (whether businesses, nonprofits, government agencies, advocacy organizations, etc.) access fees to reach certain consumers, and economic discrimination practices that distort consumer choice,” including zero rating. The bill would charge the state attorney general authority with enforcement. SB-822 would prohibit public entities in California from contracting with ISPs that don’t follow net neutrality rules; restrict USF infrastructure funding under California’s Advanced Services Fund to net neutral ISPs; and condition video franchise agreements on compliance. The Senate earlier passed SB-460 by Democratic Senate President Kevin de León (D). The Electronic Frontier Foundation saidSB-460 is legally vulnerable and supports Wiener’s bill (see 1802010013).

Lifeline USF providers endorsed a request that program providers be reimbursed during a subscriber non-usage grace period. The National Lifeline Association recently petitioned the FCC to rule that Lifeline eligible telecom carriers (ETCs) be "permitted to seek reimbursement for all Lifeline eligible subscribers served as of the first day of the month ... including those subscribers that are in an applicable 15-day cure period following 30 days of non-usage." Universal Service Administrative Co. had reversed guidance that let Lifeline ETCs be reimbursed during the cure (grace) period, providers said in comments posted Monday and Tuesday in docket 11-42. "FCC rules require ETCs to provide Lifeline customers with service during the cure period (Section 54.405(e)(3)), and mandate provision of Lifeline support to eligible Lifeline subscribers served on the first day of the month (Section 54.407(a))," Sprint said. "The reasonable and logical import of these rules is that Lifeline support is due for Lifeline customers who are in the cure period as of the first of the month." It said providers incur "significant" costs for accounts during the cure period, and said if USAC's reversal is upheld, it should be applied only prospectively. Q Link Wireless and Smith Bagley filed supportive comments (here and here). Smith Bagley discussed with FCC staffers an upcoming transition to a national verifier of Lifeline eligibility and "ways to mitigate potential impacts on Tribal areas," said another filing. Tribal representatives affiliated with the National Congress of American Indians also voiced support for Lifeline on tribal lands, in discussions with Chairman Ajit Pai, other commissioners and staffers in conjunction with NCAI's meeting Feb. 15 (see 1803130057). Chickasaw Nation Lt. Gov. Jefferson Keel "expressed concern about changes to the geographic scope of the enhanced Tribal subsidy," filed Barbara Esbin, Consumer and Governmental Affairs Bureau deputy chief. "Teresa Hopkins, Navajo Nation Telecommunications Regulatory Commission, expressed concern about the loss of one-on-one relationships between providers and Lifeline recipients in the move to the National Eligibility Verifier, which have proven particularly important to those serving and living on Tribal lands, where many rely on mobile wireless and Smartphones as their only source of communications services." It said tribal leaders urged the FCC to act on a February 2017 draft order to exempt carriers primarily serving tribal lands from operating-expense limitations (see 1802020058), and supported a tribal broadband factor proposed by a recently circulated draft NPRM and order (see 1801160040).

A Tuesday Senate Communications Subcommittee hearing on broadband provisions in President Donald Trump's infrastructure legislative proposal discussed how the plan would deal with streamlining broadband-related regulations and funding to encourage deployments. Senators reserved their strongest criticisms for the state of connectivity data collection and mapping. All three issues were among those expected to be covered (see 1803120054). Secretaries of Transportation Elaine Chao, Agriculture Sonny Perdue and Commerce Wilbur Ross are among those expected to testify at a Wednesday Senate Commerce Committee hearing that also could involve broadband provisions in Trump's plan.