The FCC’s USF strike force is “actively investigating Lifeline service providers suspected of violating program rules and federal law,” Chairman Tom Wheeler told Sen. David Vitter, R-La., a prominent critic of the Lifeline program. Wheeler described how Lifeline disbursements have fallen in recent years along with changes to the program, writing to Vitter in an April 21 letter released Tuesday.
The FCC offered 10 telcos a total of up to $10.1 billion over six years to extend broadband to almost 9 million rural residents. If the companies accept the full amount of the Connect America Fund Phase II USF money, at $1.68 billion annually, they would have to build out service of at least 10 Mbps downstream and 1 Mbps upstream by the end of 2020, the agency said Wednesday. The telcos have until Aug. 27 to decide whether to accept the CAF Phase II offers state by state, and in states where the price-cap carriers decline, "the subsidies will be offered to providers on a competitive basis," according to a commission news release and Wireline Bureau public notice (see here and here).
Any Communications Act overhaul probably won't advance as comprehensive legislation, a key backer of the GOP initiative told us this week, addressing a long-running question of whether the telecom rewrite may be piecemeal or in one larger package. Nearly 18 months have passed since House Republicans first outlined plans to overhaul the act, comparing the effort to the comprehensive overhaul that created the 1996 Telecom Act.
Lawmakers in both chambers are preparing a letter to the FCC to address one of NTCA’s USF priorities on stand-alone broadband, reviving a bicameral, bipartisan letter sent to the FCC last Congress. NTCA also received promises from two lawmakers Tuesday that they will take the group’s priorities to heart, with legislation if need be. Prominent topics included overhaul of the USF, call completion problems and net neutrality, a controversial and partisan item in Congress.
Sprint and T-Mobile spent less on lobbying so far this year, Q1 lobbying reports showed. Monday was the deadline for quarterly lobbying reports, but many trade associations and companies hadn't filed theirs by our deadline. Observers have said net neutrality and proposed acquisitions are big drivers of spending in the telecom space, and those issues turned up repeatedly in the Q1 forms posted this week.
FCC Commissioner Mignon Clyburn urged on the FCC to move forward on overhaul of the USF Lifeline program. “The criticism that Lifeline does not serve its targeted audience because people already have phone service is a myth,” Clyburn said in a speech Monday at NTCA. “Too many consumers are struggling to maintain service, and we have a duty to respond.” FCC officials said Monday the agency appears headed toward an NPRM on a Lifeline overhaul, possibly this summer.
The FCC’s opposition to Allband Communications Cooperative’s petition for Supreme Court review of the agency’s 2011 USF/intercarrier compensation order should be rejected, the company said in a reply brief Wednesday. The company is contesting the order’s $250 per-line-per-month USF cap. The agency had argued Allband lacks standing to challenge the order because it had been granted a three-year waiver from the cap, has a pending petition to renew the waiver and thus hasn't been subject to the cap, said Allband’s brief. But the company said “’the ripeness doctrine’” shouldn't apply because the matter involves “issues of continuing public interest, capable of repetition and capable of evading review.” The agency also has no deadline for acting on the renewal request, and absent action, Allband would be subject to the cap July 1, the company said. The FCC also didn't respond to the company’s claims in its petition for review, including that the agency didn't follow applicable statutory provisions or congressional intent, the reply brief said. NARUC, U.S. Cellular and Cellular South have also asked the court to review a 10th U.S. Circuit Court of Appeals decision upholding the order on various grounds (see 1504090054).
The February FCC net neutrality order may provide momentum to any congressional proposal to end the FTC’s common carrier exemption, industry observers told us. That exemption precludes FTC Act Section 5 jurisdiction over common carriers subject to the Communications Act, and the FCC order reclassifies broadband as a common carrier service under Title II of the Communications Act, potentially upsetting jurisdictional boundaries. Any proposal may get entangled in net neutrality, complicating the issue in a messy legislative battlefield over agency authority for the FCC and FTC, observers said.
Beyond the usual difficulty in getting the Supreme Court to take a case, petitions (see 1504080050) seeking review of the 2011 USF/intercarrier compensation order (see 1405270045) face some obstacles, former FCC Chairman Reed Hundt and other telecom attorneys told us. U.S. Cellular’s argument that the net neutrality order adds to the urgency to deal with the agency’s Telecommunications Act 706 authority through the Universal Service Fund/ICC case is unlikely to move justices, they said.
U.S. Cellular urged the U.S. Supreme Court to decide the FCC doesn't have authority under Telecommunications Act Section 706 to regulate broadband, and said in its Wednesday brief that if the court agrees it would remove the “strong legal foundation” of both the net neutrality and the USF/intercarrier compensation order (ICC). “The validity of both sets of rules will have to be addressed in further rulemakings,” the brief said. The argument came as the company replied to the FCC’s opposition to various petitions for the court to review the 2011 USF/intercarrier compensation order (see 1405270045).