T-Mobile misled the California Public Utilities Commission with false statements about its CDMA shutdown and should pay nearly $5.3 million for violating the commission rule 1.1, ruled CPUC Administrative Law Judges Karl Bemesderfer and Robert Mason Monday. The decision in docket A.18-07-011 will become final in about a month if no party appeals and no commissioner requests review. While penalizing T-Mobile for statements made to the commission, the CPUC rejected a Dish petition last month to modify the state commission’s April 2020 T-Mobile/Sprint OK (see 2203170072). T-Mobile "falsely represented that there would be a three-year customer migration period (2020-2023)" for Sprint customers to T-Mobile and Boost Mobile customers to Dish Network, the ALJs wrote. Saying that offense was serious, the ALJs said they scaled back the penalty in consideration of recent T-Mobile/Dish talks to resolve their dispute. The CPUC relied on various T-Mobile representations about "a three-year migration period, which were made on the record and under oath,” when it included that migration timeline in its order approving the deal, the ALJs said. "At no time prior to announcing that it planned to end the migration period" Dec. 31 "did T-Mobile alert the Commission and DISH that the various representations quoted above had been misinterpreted." They said it was "telling that, except for T-Mobile, the Commission and all other parties to the proceeding came away from” a Dec. 5, 2019, hearing “with the understanding that the migration period would be three years.” The ALJs rejected “T-Mobile’s attempt to whitewash” Chief Technology Officer Neville Ray’s testimony at a September 2021 hearing (see 2109210040 and 2109200065), saying “T-Mobile’s efforts to deny these promises and its expressed intent to shut down its CDMA network prior to the completion of the three-year migration period have misled the Commission.” T-Mobile suggested it was “nothing more than a misunderstanding that does not rise to the level of a Rule 1.1 violation,” but that argument is “factually and legally incorrect," since T-Mobile never tried to correct the record, they said. T-Mobile didn’t comment Tuesday. In a separate matter, the carrier disagreed Monday with the CPUC seeking up to $230 million in possible fines for subsidiary MetroPCS failing to remit California USF payments for prepaid phone service (see 2204250049).

The Oklahoma USF (OUSF) administrator expects to seek a 34% increase to the connections-based surcharge, to about $1.53, said Oklahoma Corporation Commission (OCC) Telecom Coordinator Mark Argenbright at a virtual workshop Tuesday. Increased support is needed to fulfill demand from transferring remaining support in the former high-cost fund to OUSF, increased demand for primary OUSF support, and an ongoing funding deficit for previously granted support, said a document displayed at the meeting. Oklahoma implemented connections-based contribution in November. Other states that adopted the method have had unstable surcharges, and the possible Oklahoma increase might show the same happening here, said Director-State Regulatory Benjamin Aron. If the OCC had kept a revenue-based method, the surcharge would have jumped to more than 17%, from about 6.3% before the commission shifted to connections, noted Argenbright. The OCC aims to propose statutory language to shift OUSF’s mission to broadband in time for the 2023 legislative session, he said. It’s an odd time to repurpose USF for broadband, considering so much federal money is flowing into the state, said Aron. It seems premature to talk about writing a OUSF bill to support broadband without a better understanding of what will happen with federal dollars, agreed Bill Bullard, attorney for Consolidated Communications and other rural LECs. The OUSF administrator is "sensitive" to other sources of broadband funding and gets that coordination will be needed with the newly formed state broadband council, said Argenbright: Talks to develop an OUSF revamp bill should continue.

MetroPCS faces up to $230 million in possible fines for failing to remit California USF payments for prepaid phone service, the California Public Utilities Commission said Friday. The CPUC ordered an investigation into whether T-Mobile’s Metro violated the state’s 2014 Prepaid Act. The agency said the carrier failed to remit the full amount of surcharges and user fees paid by customers in 2017 and 2018 for state public purpose programs that support low-income and disadvantaged consumers. CPUC staff tried to collect, but Metro claims it owes nothing, the agency said. A related 2017 lawsuit brought by MetroPCS (see 1811060005) is pending in the U.S. District Court in San Francisco (case 3:17-cv-05959-JD). The company challenged the Prepaid Act and related CPUC resolutions imposing surcharges as unlawful and preempted. The district court agreed with Metro in a 2018 decision, but the 9th U.S. Circuit Court of Appeals reversed and remanded in August 2020. The district court case awaits a new trial date and is scheduled for a case management conference May 12, the CPUC said. "This is a longstanding dispute with the CPUC that Metro has been litigating in federal court for well over four years," a T-Mobile spokesperson said. "We ... are confident in our position based on federal law. Metro has remitted and continues to remit surcharges to the Commission consistent with federal law and in a manner that is non-discriminatory to its prepaid customers."

The Oregon Public Utility Commission will open a rulemaking to update state USF rules. Commissioners voted 3-0 Tuesday to adopt staff's recommendation in docket AR 649. Telecom industry groups gave mixed reviews last month to the PUC’s plan to adopt a CostQuest model to decide the size of the Oregon USF (OUSF) starting Jan. 1 (see 2203310040). Deciding to issue an NPRM is merely a “jumping-off point” for the rulemaking, reminded Chair Megan Decker at Tuesday’s virtual PUC meeting. The PUC signed a contract earlier in the week to use a CostQuest model, said PUC senior telecom analyst Nicola Peterson. But the proposed NPRM is a framework to move forward while allowing input, she said. "I don't think putting it off is going to help make it an easier process." The Oregon Telecommunications Association doesn’t want to open a rulemaking that says the PUC will use a model when it doesn’t yet understand the model’s potential results, said OTA attorney Rick Finnigan: The PUC should take more time. "This is important and we need to get it right," he said. The Oregon Cable Telecommunications Association supports moving forward because it thinks the proposed framework is “flexible enough” to let parties work with the model, said Davis Wright’s Mark Trinchero. Commissioner Mark Thompson supported moving forward, while sympathizing with OTA’s concerns. “It is resonating with me that it feels a little weird to ... adopt a rule that says we're going to use a cost model when there seems to be concerns that we really don't know what that cost model is going to produce.” Commissioner Letha Tawney said she sees “outs” for the commission if “this goes off the rails.” Concerned parties should proactively engage, she said.

Arizona could modify state USF into a rural-focused fund to expand broadband, said Smith Bagley in comments Monday at the Arizona Corporation Commission (ACC). "A narrowly tailored state universal service fund may be uniquely qualified to understand and address specific local needs in a manner that large temporary federal grant programs cannot.” The ACC could, through a rulemaking, amend Arizona USF rules “to create a rural universal service fund similar to the fund created by the New Mexico Public Utilities Commission,” it said in docket T-00000A-20-0336. Smith Bagley provides wireless and wireline service to tribes in remote parts of Arizona, but some areas in that territory remain unserved, and the company's voice, 3G and 4G networks "cannot be upgraded to 5G without substantial additional investment in wireless equipment and middle-mile fiber connections to its towers,” it said. "In areas with poor demographics and sparse population density (often less than ten people per square mile) there is no business plan supporting these additional investments without assistance from either a universal service mechanism or a grant program specifically designed to encourage investment.” Smith Bagley disagreed with Frontier Communications that the fund should be limited to voice. Tuscon Electric Power and UNS Electric on Friday supported using AUSF for “broadband development in rural and tribal communities, especially those that may be impacted by coal plant closures.” ACC Chairwoman Lea Marquez Peterson sought comments from tribes and cooperatives after only telecom companies commented initially on a possible AUSF update (see 2203280052).

The FCC Wireline Bureau released a set of best practices for domestic Communications Act Section 214 applicants seeking approval for transactions including a transfer of USF high-cost obligations, per a public notice Tuesday. The bureau "has recently received higher volumes" of such applications, it said, and recommended applicants include certain information to "expedite the timely acceptance ... and minimize the need for supplemental filings." Such information includes a list of all USF high cost support received that would be transferred, information about whether any entities are eligible telecom carriers, how a transfer may affect an entity's Connect America Fund Phase II or Rural Digital Opportunity Fund support, cost study areas to be transferred, and whether any entities currently participating in Lifeline, the emergency broadband benefit program, or affordable connectivity program would continue to do so.

The Communications Workers of America asked FCC Wireline Bureau staff to consider opening a proceeding "to determine the full scope" of FCC authority under Section 254 of the Communications Act to expand the USF's contribution base "to include broadband internet access service and relevant revenues of all entities whose services rely on telecommunications," said an ex parte posted Wednesday in docket 21-476 (see 2202180046). CWA also said expanding the contribution base to just broadband internet access service providers would create an "imbalance in the internet ecosystem between broadband and edge providers." The FCC should "explore how edge companies can participate in fair cost recovery, reduce the burden on broadband subscribers, and close the digital divide," CWA said.

Regulatory Commission of Alaska members voted 4-0, with one member absent, to seek comments on Alaska USF (AUSF) proposals by RCA staff and the Alaska Remote Carrier Coalition (ARCC). Comments will be due in 30 days, replies 20 days later, commissioners decided at a Wednesday virtual meeting. Chairman Bob Pickett said he will bring commissioners back April 27 to discuss staff questions, including on AUSF’s role and future funding amounts and methods. While not opposing taking extra comment, Pickett said he hopes the proceeding won’t stretch until fall. “This thing needs to be resolved ASAP.” Progress was “limited” at last month’s technical conference on the staff proposal (see 2203180066), RCA Common Carrier Specialist David Parrish told commissioners. It’s time for the "commission to make some tough policy calls,” he said. It appears support is needed, but it’s difficult for RCA members to tell how much support is required in the state that deregulated telecom, said Commissioner Antony Scott. Commissioners agreed the RCA’s limited authority to compel specific relevant data is a challenge. The ARCC filed an alternative proposal Tuesday, the second it filed in docket R-21-001. It proposes a voice connections-based contribution method and distributing most statewide support to remote areas disconnected from roads. It would defer for five years addressing middle-mile transport cost support so the state can assess the impact of the Infrastructure Investment and Jobs Act.

Broadband VI asked the FCC to establish a "formal process" for eligible telecom carriers receiving funding for at least one high-cost USF program to "seek additional funding due to unanticipated increased expenses" caused by the COVID-19 pandemic, inflation or supply chain issues, in comments posted Tuesday in docket 18-143 on Viya's request to extend its legacy high-cost funding (see 2203030071). Broadband VI didn't take a position on Viya's request, although it "does concur with Viya that unanticipated, extraordinary inflationary pressures ... have imposed unexpected and unplanned-for costs on entities providing and developing broadband service in the U.S. Virgin Islands."

California's Senate Appropriations Committee placed a state USF bill in its “suspense file," a category reserved for bills deemed to be costly and that will be taken up later. Nobody testified on the bill at a livestreamed hearing Monday. SB-857 would extend California High-Cost Fund A and B programs, set to expire Jan. 1, until Jan. 1, 2028. CHCF-A is for small independent telcos; CHCF-B is for telcos serving areas where cost exceeds rates charged by providers. The bill would extend CPUC authority to collect surcharges, but it doesn't "necessarily mean that surcharges will be collected for both funds,” said a March 31 fiscal note on SB-857. The CPUC hasn't collected the CHCF-B surcharge since December 2013 due to a surplus that’s now about $22 million, it said. "In recent budget years, the state has borrowed funds from the” B surplus to fund other USF programs. As those funds are repaid, the surplus could grow to $106 million, it said.