Chairman Ajit Pai called the FCC's USF rate floor policy "crazy" philosophically, and cited plans for remedial actions. The idea that government forces rural telco phone rates up to reflect a national average, or lose high-cost USF support, doesn't make sense, he said in Q&A with NTCA CEO Shirley Bloomfield webcast from a rural telecom show in New Orleans. He hopes to "move with dispatch" to get fellow commissioners to agree with him on near-term relief and a longer-term solution. He recently criticized the rate floor and told lawmakers he planned to seek action in coming months (see 1901310036). Separately, Pai said he's seeking a "balance" on broadband performance testing that holds USF-backed providers accountable for their data-speed commitments while streamlining the process as much as possible to ease industry burdens. He said the FCC is focused on coordinating with the Agriculture and Commerce departments on broadband infrastructure efforts to ensure "we speak with one voice" so parties "aren't running over each other" and "we get the most bang for our buck." He said the commission wants to encourage more rural fiber deployment to feed nascent 5G wireless systems, which he believes have much potential in rural areas, though he recognized the business plan is difficult. It's important to create small geographic license sizes in spectrum auctions to "incentivize" bidding by small as well as big providers, he said: "Stay tuned." He spoke enthusiastically about the opportunities broadband can create in rural America through remote healthcare and other applications, noting when he was growing up in rural Kansas, his doctor father used to drive 45 miles to visit patients. His overall focus remains on ensuring every American is "empowered" in the digital age: "That requires broadband."

FCC staff announced new soft and hard launches of the Lifeline national verifier (NV) of consumer low-income eligibility in a dozen states and other U.S. jurisdictions. The Wireline Bureau said a soft launch, allowing Lifeline providers voluntarily to use the NV to test their enrollment systems and processes, begins Wednesday in Alaska, American Samoa, Delaware, the District of Columbia, Maine, the Northern Mariana Islands, Rhode Island and the U.S. Virgin Islands. A hard launch, when all parties must use the NV to determine consumer eligibility, begins March 5 in Missouri, North Carolina, Pennsylvania and Tennessee, said a public notice Tuesday in docket 11-42. Those states had a soft launch Dec. 4 (see 1811280008). Lifeline providers and advocates voiced concerns (see 1901230036) about consumer enrollment difficulties and de-enrollment of existing users under the NV's systems -- which lack an application programming interface for carriers and full access to national low-income program databases -- starting with less-populated states in the first two batches to undergo hard launches. They fear the March 5 hard launch of four more-heavily-populated states could greatly increase the magnitude of the problems. Comments on privacy in NV use of computer matching programs are due March 7 (see 1902050008). An American Enterprise Institute scholar said the FCC's proposed Lifeline reseller ban was likely "dead" after court reversal of limits on enhanced tribal support, including a reseller ban (see 1902050010).

The FCC "can do better" on Lifeline USF, new Commissioner Geoffrey Starks tweeted Monday, after the U.S. Court of Appeals for the D.C. Circuit Friday "struck down @FCC rules that limited Tribal #Lifeline and threatened affordable phone and internet access on Tribal lands" (see 1902010051). "The Court said the @FCC failed to consider harms to people depending on the program and ignored relevant data," he added.

The FCC approved establishing an Enforcement Bureau Fraud Division to combat waste, fraud and abuse in USF and other programs, said an order released Monday after being adopted unanimously Jan. 29 before new Commissioner Geoffrey Starks was sworn in. Noting bureau staffers already investigate and prosecute fraud in FCC programs, the order said its purpose "is to create a division, comprised of existing staff, that will be dedicated to taking enforcement actions against fraud in the USF and other funding programs." The division "will work collaboratively with other law enforcement entities," including the FCC Office of Inspector General, and "will consist of the individuals who presently focus on fraud cases." Rakesh Patel, the bureau's USF Strike Force director, will be division chief, joined by other bureau staff, emailed an FCC spokesperson. "It is vital that we maintain a steady eye on [USF] programs to address the unfortunate reality that, over the years, too much money that should have gone to connect American consumers and businesses has been lost, stolen, or misused," said EB Chief Rosemary Harold. The division will be established following review and approval by the Office of Management and Budget and the House and Senate Appropriations committees, and after Federal Register publication. The order said the division's creation will be a structural change, not a substantive one, and doesn't require any rule changes: "The notice and comment and effective date provisions of the Administrative Procedure Act contained in 5 U.S.C. §§ 553(b) and (d) do not apply."

Former FCC Commissioner Mignon Clyburn agreed to work as a paid adviser on T-Mobile’s proposed takeover of Sprint, she confirmed in an interview Monday. The Democrat had opposed some deals while at the FCC but voted in the 4-1 majority that approved Comcast/NBC Universal (see 1101190091). “I am advising T-Mobile/Sprint as they seek to accelerate the creation of an inclusive, nationwide 5G network, on how best to build a bridge across the digital divide,” Clyburn said. “Affordable broadband access is a critical priority of mine, it has been and always will be, particularly for those Americans who are underserved or currently have no viable options.” Clyburn noted other former government officials also signed on. Republicans including former Commissioner Robert McDowell and former NTIA administrators Nancy Victory and John Kneuer also have worked for the deal. Earlier Monday, T-Mobile CEO John Legere urged the FCC to “move forward expeditiously." His letter to Chairman Ajit Pai reassured that the deal won't mean higher prices. “Critics of our merger, largely employed by Big Telco and Big Cable, have principally argued that we are going to raise rates right after the merger closes,” he said in docket 18-197. “I want to reiterate, unequivocally, that New T-Mobile rates are NOT going to go up. Rather, our merger will ensure that American consumers will pay less and get more.” In a second filing Monday, the companies committed to keeping legacy rate plans in place for three years after the merger “or until better plans that offer a lower price or more data are made available, whichever occurs first.” The companies said plans could be adjusted to reflect “pass through” costs, such as increases in government taxes or fees. The 4Competition Coalition responded that "committing to not raise ‘rate plans’ for three years is an empty promise that does not provide any real price protection." The "pledge is riddled with loopholes and ensures that any network improvements will allow them to justify higher monthly bills," said the coalition that includes AFL-CIO, Communications Workers of America, Common Cause and other public interest groups, C Spire, Dish Network and NTCA. New Street’s Blair Levin told investors, meanwhile, DOJ apparently “never had to slow down its work in taking depositions, meaning that while the [federal] shutdown likely delayed the final resolution, the delay may not be as great as the 35 day shutdown." The FCC was on hold but "staff is working closely with the DOJ staff and can quickly come back up to speed,” he said: A House letter supporting approval (see 1901300044) was a positive for the deal, but a Feb. 13 House Commerce and Judiciary committees' hearing (see 1901280051) presents risks. Executives could say "things at odds with their filings or make other statements that could create problems,” Levin said. Another potential negative is the number of state investigations (see 1901040041), he said.

Diversity groups seeking increased enforcement of FCC broadcast equal employment opportunity rules pushed Chairman Ajit Pai and Commissioner Mike O’Rielly in calls Wednesday and Thursday to change the draft EEO order set for the agency’s Feb. 14 meeting, said a filing posted Friday in docket 18-23. Multicultural Media, Telecom and Internet Council President Maurita Coley and Senior Adviser David Honig represented the 33 groups -- which include the NAACP and the Urban League. As in previous calls to Commissioners Brendan Carr and Jessica Rosenworcel during the shutdown (see 1901110036), MMTC seeks changes to the draft midterm EEO order to revamp how the FCC enforces the rules and target “word of mouth” recruiting in broadcasting. The draft says the groups’ proposal is outside the order's scope, but MMTC argued the agency has a sufficient record. If the regulator seeks additional comment, it should be expedited, MMTC said. The FCC should act by July 4, MMTC said. The agency isn’t expected to accede to the requests (see 1901180043).

The FCC's second 5G auction, of 24 GHz spectrum, will start March 14. Upfront payments are due Feb. 19, said a Wireless Bureau and Office of Economics and Analytics announcement Thursday. The FCC plans a bidding tutorial by Feb. 15 and mock auction March 11. The 28 GHz auction ended last week with $702.6 million in provisionally winning bids (see 1901240034). The 24 GHz auction is widely expected to get somewhat more interest and higher bids.

Lack of fiber connectivity everywhere, such as rural areas and poorer urban areas, reflects U.S. policy failure, said Susan Crawford, Harvard Law professor, Wednesday at a reading from her book Fiber: The Coming Tech Revolution -- and Why America Might Miss It, released in January. South Korea -- with its ubiquitous high-speed connectivity -- is "the future," she said. The U.S. "took a wrong turn" in 2004 when it assumed a fiber-wireline battle would lead to competitive markets, but instead phone companies have focused on wireless, and cable ISPs now dominate a stagnant market with little competition. She said broadband connectivity is following the same pattern electrification did last century, when a few companies dominated the market and largely bypassed rural and poorer residential areas until major efforts by the Franklin Roosevelt administration. She said the interest by hundreds of communities -- often with Republican mayors -- and cooperatives in municipal fiber networks shows it's not partisan. She hopes pressure from cities eventually will "embarrass" federal policymakers. She said federal tax policies are needed to make capital cheaper for such co-ops and startup network providers. Former FCC Chairman Tom Wheeler said a policy problem is the billions spent annually subsidizing carriers' operating expenses instead of paying for fiber network buildouts in specific areas. Crawford said a separate connectivity concern is China's plan to have 80 percent of its homes wired with fiber, and to extend that to developing countries, bringing an "essentially a Chinese internet." She said 5G almost surely isn't the route to closing the connectivity divide because it won't increase coverage but instead likely lead to markets being divided up, each with a single operator dominating.

5G's inefficiency as a fixed mobile broadband business, due to capital costs to get close to the home, means it's not a big competitive worry, Charter Communications CEO Tom Rutledge said during a Q4 call Thursday. "We're going to 10G," he said, citing cable industry plans for 10 gigabit networks (see 1901070048). That would provide better broadband at lower cost, and skyrocketing data consumption should help drive demand, he said. Charter ended 2018 with its national footprint nearly all digital and its 1 GB service available throughout. It said Q4 revenue was $11.2 billion, up 5.9 percent year over year. It ended 2018 with 16.1 million residential video customers, down 1.8 percent; 23.6 million broadband customers, up 4.9 percent; and 10.1 million voice customers, down 2.8 percent. Rutledge said Charter is embracing the video anywhere marketplace but bundled video remains its primary service. Capital expenditures for 2018 were $9.1 billion, and Rutledge said lower capital spending this year -- an estimated $7 billion -- comes as it increasingly employs IP-based and cloud-based services. Analyst Craig Moffett of MoffettNathanson called that $7 billion lower than expected to an "eye-popping" degree. New Street Research's Jonathan Chaplin said the decline in capex is much faster than expected. He said the broadband subscriber growth puts the company "on a strong path for faster growth in 2019." The stock closed at $331.05, up 14 percent.

The Federal Register ran two FCC NPRM notices Thursday, the first since the agency mostly shut Jan. 2 and subsequent resumption of operations Monday. The Office of the Federal Register said it couldn’t discuss any FCC backlog but has seen “a significant increase” in document submissions since Monday over what it usually would get during a three- or four-day span. It said 80 percent of the pending documents have been submitted since 8:45 a.m. Monday. The FCC didn't comment. Comments are due Feb. 15 on Ion’s request to change the community of license for Tennessee’s WNPX Cookeville to Franklin, replies Feb. 25. Comments are due March 18, replies April 16 on a draft NPRM for an optional unified license that covers satellites and earth stations in a geostationary fixed satellite service network, and repealing or streamlining some annual reporting requirements of satellite operators.