Industry lawyers are watching a pledge by FCC Commissioner Mike O'Rielly to develop rules to prevent new E-rate-subsidized fiber networks from overbuilding existing USF-funded broadband providers and "stealing" their prime customers, such as schools. Kelley Drye said in a Thursday email blast that "one of the most significant things to watch may be Commissioner O'Rielly's questioning of USAC [Universal Service Administrative Co.] over possible use of USF money to overbuild existing broadband networks." Joel Miller, O'Rielly's chief of staff, emailed us that "Commissioner O'Rielly has made fixing the problem of overbuilding a high priority." Several Texas telcos this week offered suggestions for an FCC rulemaking to oversee the matter (see 1905230005). O'Rielly also calls for legislative fixes to prevent duplicative spending on broadband across federal agencies, and if other agencies and departments become involved, to ensure proper coordination.

FCC Chairman Ajit Pai told the leaders of the Senate Appropriations Financial Services Subcommittee the agency spent more than $27,300 on business-class airline travel from FY 2017 through the first two quarters of FY 2019 but is fully compliant with federal travel regulations. Subcommittee Chairman John Kennedy, R-La., and ranking member Chris Coons, D-Del., asked for details May 1 amid concerns about “frivolous and wasteful spending on premium-class airline tickets for government employees.” The FCC posted both letters Thursday. “The FCC’s travel policies are documented in a travel manual as well as travel bulletins that are issued periodically for specific issues,” Pai said: “These documents are available to all FCC employees. In addition, the FCC’s Travel and Operations Group has its own set of internal policies and procedures for the functions it performs related to the FCC’s travel processes as part of the FCC’s financial operations team.” Pai also said that “all travel documents … must be approved by a designated approving official (who must be someone other than the traveler). The approving official’s name and title, the date of the approval, and an original signature must be recorded in order for the travel documents to be processed.” The FCC's spending on business-class flights included $12,650 for an Oct. 25 flight to Dubai and more than $14,700 for two 2018 flights to Buenos Aires, Pai said. The FCC authorized spending for all of those flights under federal statute that allows an agency to “authorize business class accommodations when the use of other than coach-class is necessary to accommodate a medical disability or other special need,” he wrote. “In each of the three instances … the authorization was given because of a medical disability of a career staff member.” Kennedy told us Thursday he still needs to review responses from the FCC and other agencies but said he understood extenuating circumstances necessitating an official's use of first-class and business-class seats on a flight, including “health reasons or if there are no other seats available” for flights to a location.

Rumors swirl that DOJ could part ways with the FCC and end up blocking T-Mobile’s buy of Sprint (see 1905210038). Lawyers involved in the proceeding said reports about DOJ concerns could be real or just Antitrust Division Chief Makan Delrahim adding to his leverage in negotiations with the two companies. DOJ didn't comment Wednesday. Approval is now a “coin toss,” New Street’s Jonathan Chaplin told investors Wednesday after a colleague earlier gave it an 80 percent likelihood. “DOJ could take two paths: they could sue to block the deal, or they could seek additional conditions to those agreed between the parties and the FCC,” Chaplin said. In the midst of uncertainty, he downgraded Sprint to neutral. That company is “precarious, with upside to $10 [share] if the deal is approved and downside to $2, and ultimately to $0, if blocked,” Chaplin said. T-Mobile revealed Wednesday that CEO John Legere spoke with FCC Chairman Ajit Pai on Sunday, the day before the release of his statement endorsing the deal. Legere spoke with Commissioners Brendan Carr and Mike O’Rielly on Monday, said a filing in docket 18-197. The FCC has “done the heavy lifting” on conditions and support in Congress is bipartisan, said a lawyer working for the deal: “Now, it is a short putt to get the ball into the 18th hole." Others were heartened by reports that DOJ might say no. “The public record is clear that permitting T-Mobile to acquire Sprint will harm consumers and substantially reduce competition and innovation in the wireless market,” said Phillip Berenbroick, senior policy counsel at Public Knowledge: “This transaction is not even a close call under the DOJ’s prior precedents and Section 7 of the Sherman Act, and the Department of Justice should file suit to block the deal.” Sprint shares closed down 7.6 percent at $6.67 on Wednesday. That's a wider discount to the per-share takeover price than earlier this week when Pai announced he would vote "yes" on the deal.

Microsoft worries how Secure Handling of Asserted Information Using Tokens (Shaken) technology will be implemented. Commissioners take up a rulemaking asking questions about giving carriers more tools to block robocalls at their June 6 meeting (see 1905150041). Microsoft representatives met with aides to all five FCC members, said a filing in docket 17-59 posted Tuesday. “We raised concerns about the possibility that voice providers may implement SHAKEN in a non-uniform manner,” the company said, giving as an example, "if the same call is treated significantly differently depending on which provider’s network is terminating the call.” Nonuniform rollout “could significantly increase the difficulty for calling service providers to build originating calling services that comply with each provider's differing approach to SHAKEN and to ensure, ultimately, that their outbound calls receive the proper designation and termination,” the company said.

Online video watching is skyrocketing, NTIA said Tuesday, citing its latest internet-use survey results. Seventy percent of internet users watched video online in 2017, up from 45 percent in 2013. That viewing rate varies with age, it said, with 86 percent of internet users between the ages of 15 and 24 watching, compared with 40 percent of users 65 and older. It added questions to the 2017 survey about pay-TV consumption and of the 27 percent of U.S. households that lack an MVPD subscription, 60 percent never had one and 40 percent were cord cutters. "Cord never" households tended to be younger, lower income and less likely to be non-Hispanic white than those with cable. Cable-subscribing households typically are over 50 and less likely to have children in the household than cord cutters.

Fresh T-Mobile/Sprint commitments to the FCC underscore promises made in California and give “further assurance” that T-Mobile will “build a world-leading 5G network,” rural residents will get 5G, and in-home broadband competition will increase, said the companies' motion at the California Public Utilities Commission in docket A.18-07-011. Divesting Boost Mobile won’t affect a LifeLine pilot recently OK’d by the California agency (see 1904250028), the carrier said. “T-Mobile reaffirms its strong support for that program and its willingness to work with the Commission staff to determine how to best support the pilot, including but not limited to having one of New T-Mobile’s brands (e.g. MetroPCS) assume Boost’s responsibilities under the pilot.” FCC Chairman Ajit Pai supported the deal, but the CPUC’s decision could be delayed into late summer or longer if the state agency decides changes to the application like Boost divestiture require additional review (see 1905200051). Also Monday, the carriers urged the CPUC to deny consumer groups's motion to strike material based on the carriers' memorandum of understanding (MOU) with the California Emerging Technology Fund (CETF). "To insist that the Commission disregard T-Mobile’s commitments in the CETF MOU as it reviews the merger is to ignore a host of promises that will only have a positive impact on the State," the carriers said.

"Largely successful" in bringing rural broadband there, Lake County, Minnesota, wants to end its experiment as a rural broadband provider. In an FCC docket 10-90 petition Monday, it asked to relinquish its status as a rural broadband experiment (RBE) support recipient as part of its plan to sell the fiber optic network to Pinpoint Holdings. The county said it "dramatically" expanded broadband availability in unserved and underserved areas north and northeast of Duluth, but the project also was rife with "unexpected challenges and delays" that hampered its ability to meet its economic commitments and it was unable to secure financing to continue operating and expanding the network. It said Pinpoint was the winning bidder for the network, and has indicated it doesn't want to continue with the RBE grant program once it closes on the sale. The county said since the RBE program doesn't have a specific process for discontinuing participation, the agency should follow the same process as for relinquishment of Connect America Funds. It said out of an RBE grant award of $3.49 million OK'd by the FCC in 2016 (see 1612130006), it's so far received $1.63 million and that as of Aug. 1, it had built out to serve 3,102 locations, or 36.51 percent of those eligible. It said that, along with giving up its RBE grant status, it and the FCC should agree the county would retain 36.51 percent of the grant support it was awarded, $1.27 million, and return any more funds. Mediacom in 2011 challenged the Rural Utilities Service Broadband Infrastructure Program project as not financially viable, prompting a congressional investigation (see 1303140055 and 1205070046). Then-RUS Administrator Jonathan Adelstein, now Wireless Infrastructure Association president, testified government would seek full repayment of the loan to Lake County in event of a default (see 1205170068). The municipality said Pinpoint sale proceeds would to go the RUS. "From the moment it was conceived, anyone with even a cursory knowledge of the telecom business knew the Lake County broadband project did not add up," Mediacom emailed. "Lake Connections was an unquestionable financial disaster, and taxpayers deserve better."

The FCC Technology Advisory Council meets June 21 at 10 a.m. in the Commission Meeting Room. Entigenlogic Executive Chairman Dennis Roberson is chairman of TAC, which was rechartered for a two-year term that began Friday, said a public notice Monday. For a listing of other members, see the personals section of this issue.

Demand for upfront payments and multiyear commitments exceeded a $150 million cap for the first time in the history of the Rural Health Care Fund, said an FCC order Monday to provide full funding for all eligible requests for FY 2018. The agency said in docket 02-60 it has suspended its multiyear commitment rule for participants in the RHC program, which is backed by the Universal Service Administrative Co. and provides broadband assistance to rural healthcare providers. The order instructs USAC to designate contracts associated with multiyear funding requests as "evergreen" to exempt them from annual competitive bidding requirements. The commission extended the filing window for 2019 applications from May 31 to June 30, after some groups were concerned (see 1903190019). "We need to evaluate and better understand the growth in demand for the Healthcare Connect Fund, so we can stay ahead of changes and enable the program to meet the needs of those it serves," said Commissioner Geoffrey Starks in an accompanying statement.

Comments are due June 7 on two North American Numbering Council reports, said the FCC Wireline Bureau Friday. Comments on new findings related to nationwide number portability are due in docket 17-244, said one public notice. NANC delivered the NNP report May 13 in a letter from NANC Chairman Travis Kavulla. He said that an NNP Working Group narrowed its recommendations to two options, a national local routing number or an Internet Protocol routing number, and the choice “depends on the trajectory of technological change in the industry.” NANC’s NNP report didn't include a cost-benefit analysis, Kavulla adds, because doing so would require assumptions about the pace of stakeholders' technology upgrades. Docket 18-336 is for a report, also issued May 13, updating the FCC on recommendations for implementing 2018's National Suicide Hotline Improvement Act. The law looks to designate a 3-digit dialing code for national use. There's no consensus on what that number should be (see 1905160054).