FCC Chairman Ajit Pai recommitted to “implementing measures” GAO recommended in a report released in June on continued "weaknesses" in Lifeline USF program management, saying in letters to the leaders of the Senate Homeland Security Committee and the House Oversight Committee he intends agency staff to “follow through in implementing these actions.” Pai also copied the letter, released Friday, to Sen. Rob Portman, R-Ohio. Portman and Senate Homeland Security ranking member Claire McCaskill, D-Mo., jointly sought the GAO report. GAO found Lifeline management remains deficient despite FCC and Universal Service Administrative Co. efforts to improve controls over finances and enrollment by low-income consumers (see 1706290037). McCaskill and Senate Homeland Security Chairman Ron Johnson, R-WIs., said last week they will delay pursuing legislation to revamp Lifeline while FCC fixes take effect (see 1709140059). Pai also noted his July order to USAC to impose safeguards "to mitigate the risk of waste, fraud, and abuse" (see 1707110051). “These safeguards are designed to strengthen program integrity through in-depth examinations of subscriber eligibility, oversubscribed addresses, phantom Lifeline subscribers, deceased Lifeline subscribers, and duplicate subscribers, and through increased oversight over sales agents,” Pai said.

FCC Chairman Ajit Pai said "bridging the digital divide" is his "highest priority" and vital to free expression and America's civic future. "To work, to learn, to educate, to heal, but most relevant here, to speak -- these are incredibly important functions, and so in this mission we simply cannot fail and we cannot falter," he said Friday at a Center for Democracy & Technology conference on online speech (he deviated at times from prepared remarks). Pai said free speech is being both challenged and stimulated by modern communications, but on balance, "the positives outweigh the negatives." He cited polls showing a lack of appreciation among Americans for freedom of speech, along with "regular demands" the FCC pull the licenses of Fox News, MSNBC or CNN because people disagree with opinions expressed on the networks. "Setting aside the fact that the FCC doesn’t license cable channels, these demands are fundamentally at odds with our legal and cultural traditions," he said. Pai also sees positive signs, with expansion of internet access particularly hopeful. But for "too many," the discussion "is academic," he said, because they are on the wrong side of the digital divide, lacking adequate access to high-speed broadband. "The most significant digital divides are along economic and geographic lines," he said. "Basically, if you’re wealthy and live in a city, you should be in good shape. If you’re low-income and/or live in a rural area, you’re much more likely to have a problem." He said the FCC is trying to close those gaps, including by revamping $6.5 billion in USF subsidies to support both mobile and fixed broadband services over the next 10 years, and by removing regulatory barriers to network investment.

Rural interests supported a request for RLEC broadband relief from USF contributions while regulators review the industry mechanism funding the subsidy system. WTA urged the FCC to grant an NTCA/USTelecom petition for temporary forbearance from application of USF contribution requirements to RLEC-provided broadband internet transmission services until the FCC decides on how all broadband services should be treated. The relief "would put an end to the anomaly whereby some rural Internet access service customers bear the cost of substantial federal USF contributions on broadband transmission services while urban and most rural Internet access service customers do not," WTA commented this week in docket 17-206 responding to a public notice (see 1708140059). Granting the petition would be "a simple matter of fundamental fairness and good public policy," said GVNW Consulting, which works with rural carriers. It said forbearance also would "avoid the anti-competitive implications of a regime that picks 'winners and losers' in the broadband marketplace," somewhat mitigate the "high cost of broadband for rural consumers" and be "fully consistent" with other FCC pronouncements, including in its Communications Act "Title II proceeding and more recent USF reform efforts." Without opposing or supporting the petition, the Pennsylvania Public Utility Commission said the request "demonstrates disparate treatment" of broadband services and "underlines the need for the timely reform of the federal USF contribution base reform."

Administration and oversight of the Lifeline USF program drew criticism during Thursday's Senate Homeland Security Committee hearing, as expected (see 1709130053), and committee leaders sought major improvements. Chairman Ron Johnson, R-Wis., and ranking member Claire McCaskill, D-Mo., indicated they will hold off on a legislative response until the national verifier program and other fixes instituted in the FCC 2016 Lifeline overhaul order fully roll out. McCaskill had said she would consider a possible bill, depending on results of the hearing, including a restructuring and budget cap (see 1709060063).

The FCC-proposed USF contribution factor for Q4 is 18.8 percent of net carrier revenue from interstate and international telecom service end users, said an Office of Managing Director public notice in docket 96-45 in Wednesday's Daily Digest, as expected (see 1709050050). Up from Q3's 17.1 percent factor, it takes effect in 14 days absent further action.

The FCC Wireline Bureau agenda is packed with proceedings under FCC Chairman Ajit Pai, who "likes to move things," said bureau Chief Kris Monteith at an FCBA event Wednesday attended by many of her top aides. She said the "blueprint" for nearer-term action comes from recent NPRMs and notices of inquiry, including wireline infrastructure items, a call authentication NOI, a Form 477 NPRM on broadband and voice data submissions, a Telecom Act Section 706 NOI on advanced telecom deployment, a payphone compensation auditing and reporting NPRM, and the high-profile "restoring internet freedom" (open internet) NPRM. Monteith also cited a draft NPRM proposing to update toll-free number assignments, on the Sept. 26 commissioners' meeting tentative agenda. Since Jan. 23, she said the bureau has issued 431 items, including 33 commission-level items -- "a big number." The bureau this year has opened 155 dockets -- bringing the total to 847 -- and received more than 23 million comments. "We have a fair amount on our plates," she said, noting the bureau now has 171 staffers: "We are stretched thin. Folks are doing double duty." She said there was a "reasonable prospect" for movement on USF contribution overhaul, though the chairman would decide timing. A federal-state joint board is examining possible USF contribution changes. Monteith and Associate bureau Chief Lisa Hone discussed two recent public notices seeking to refresh the record on intercarrier compensation. Officials had advocacy tips for attorneys. Monteith said the bureau recognizes that parties need to have meetings with the chairman's office but it appreciates a courtesy "heads-up." Hone suggested parties address -- before commissioner meetings -- implementation details of proposed actions in draft agenda items. Officials also stressed the need for detailed facts and proposals. "We get a lot of argument by anecdote" that's "not particularly helpful," said Deputy bureau Chief Madeleine Findley.

Democratic National Committee Vice Chairman and Rep. Keith Ellison, D-Minn., and three other House members urged FCC Chairman Ajit Pai Wednesday to reconsider a preliminary plan to move USF funds to the Treasury Department as early as next year, saying the proposal “would harm our constituents, and would be contrary to the congressional intent of the USF.” The FCC is planning to move the USF funds in response to a May GAO report on the Lifeline program that found broader problems in USF contribution system oversight and the commission's use of a private bank account rather than Treasury to store $9 billion in USF net assets (see 1706290037). The lawmakers noted their concerns that the report didn't include data following FCC's adoption of its 2016 Lifeline overhaul order in its analysis. The GAO's funds transfer recommendation “was specific” to Lifeline and it's “unclear if the adverse effects this move will have on the other programs that utilize the USF, such as the Connect America Fund, were considered when the suggestion was made,” Ellison and other lawmakers said in a letter to Pai. Reps. Michelle Lujan Grisham, D-N.M. Gwen Moore, D-Wis., and Steve Pearce, R-N.M., also signed. “Moving the USF to Treasury risks the only federal program directed to maintain rural broadband being zeroed out and having adverse effects on the overall livelihood of these communities,” the lawmakers said. “We do not condone waste or abuse in any program. However, there are other options to pursue the goal of reform without resorting to transferring” USF funds to Treasury. The FCC "received the letter" and is reviewing it, a spokesman said. The Senate Homeland Security Committee will hold a Lifeline hearing hearing Thursday (see 1709130053).

A Thursday Senate Homeland Security Committee hearing on “weaknesses" in the Lifeline USF program's management identified in a May GAO report is likely to be less balanced in the program's favor than a previous committee hearing, communications sector lobbyists from across the political spectrum said in interviews. The Senate Commerce hearing last week included a strong defense of the program from Free Press Deputy Director Jessica González and calls from Democrats for Congress to be patient before the national verifier program instituted in the FCC's 2016 Lifeline overhaul order fully rolls out in 2019 (see 1709060063).

Chairman Ajit Pai said when people call 911, they need to be able to get through and the FCC will do what it must to guarantee that occurs. Commissioner Jessica Rosenworcel said the FCC must do a complete report on hurricanes Harvey and Irma and communications failures seen in both storms. Both spoke Monday as the FCC marked the 16th anniversary of the Sept. 11, 2001, attacks with a workshop on improving situational awareness during 911 outages. It took place as Irma battered parts of the Southeast and as Florida started to deal with the damage inflicted by the massive storm. Public safety answering points and communications towers took a big hit, the FCC reported.

Citing Hurricane Irma, the FCC quickly granted Telrite a temporary Lifeline wavier from the USF program's nonusage and recertification rules for low-income consumers in Puerto Rico and the U.S. Virgin Islands, which felt the effects of the storm this week. Waived for 90 days are sections 54.405(e)(3), 54.405(e)(4), 54.407(c)(2), and 54.410(f) of rules for eligible telecom carriers serving Lifeline subscribers in those areas, said a Wireline Bureau order Thursday in docket 11-42 that partially granted Telrite's emergency petition Wednesday. "Strict compliance with these rules would be impracticable and would risk de-enrollment of Lifeline subscribers in the immediate aftermath of Hurricane Irma." The bureau declined Telrite's request for an indefinite waiver, absent further commission action. On its own motion, the bureau temporarily granted a waiver of number-assignment rules to allow service providers in Florida, Puerto Rico, USVI and any states where states of emergency are declared due to Irma, said an order in docket 95-116 in Thursday's Daily Digest. Former FCC Chairman Tom Wheeler tweeted, "Hurricane Harvey shows it is time for FCC to improve emergency alerts http://brook.gs/2gKlnYi," linking to a Brookings Institution piece he wrote.