The FCC’s Enforcement Bureau opened investigations into allegations that Lifeline carriers aren’t properly checking whether their customers are eligible to receive the subsidy, the commission said Monday in an enforcement advisory (http://xrl.us/bmkcfs). “We are actively investigating these allegations, and issue this Enforcement Advisory to alert Lifeline service providers that they face stiff penalties, potentially including revocation of their [eligible telecommunications carrier service] status or their section 214 authorization to operate as carriers, if they do not strictly adhere to the Commission’s rules,” the FCC said.
The Washington Independent Telecommunications Association, which represents small telcos in the state, alleged that competitive local exchange carrier PAETEC has been avoiding access charges. The group asked the state commission to stop PAETEC from its activities and revoke its authority to operate in the state. It’s uncertain what the FCC’s order on Universal Service Fund and intercarrier compensation would do to state access charge disputes, said the group and PAETEC.
Core Communications appealed the FCC’s Universal Service Fund and intercarrier compensation order Friday. The USF/ICC appeal is apparently the first legal challenge to the commission’s USF overhaul (CD Oct 28 p1). But it will not be the last, telecom experts have predicted. It was filed in the 4th U.S. Circuit Court of Appeals in Richmond, Va. It’s a mere two pages.
New FCC ex parte rules were violated at least 11 times since taking effect June 1, a Communications Daily review of all filings and the agency’s own checks found. Some filings were made late -- from a day in many instances to a few weeks -- and others didn’t contain enough information on what was discussed during lobbying meetings. The filings were made by companies and associations big and small. They covered proceedings ranging from changing the Universal Service Fund to pay for broadband deployment to retransmission consent, ISP speeds, disabilities access legislation passed in 2010 and getting low-power TV stations to fully vacate the 700 MHz band for wireless broadband in the small portion they occupy.
No decision was made regarding whether NARUC will appeal the FCC’s USF order at NARUC’s telecom committee conference call (CD Nov 30 p8) Wednesday, John Burke, chair of the committee, told us. NARUC, which has until the end of December to file an appeal, is in no rush to make a decision, he said. Meanwhile, it appears that several states were considering appealing particular issues in the order, said Burke. As a board member of the Vermont Public Service Board, Burke said he was looking at preemption issues and some Vermont-specific issues. If Vermont appeals, it will file before Dec. 9, Burke said.
House Commerce Committee Republicans questioned FCC transparency during the agency’s Universal Service Fund proceeding. “Given the keen interest of Congress in seeing the FCC’s internal procedures subjected to public scrutiny, we are particularly concerned with the Commission’s recent conduct with respect to the universal service item adopted at the Commission’s October open agenda meeting,” Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore., wrote in a Monday letter to Chairman Julius Genachowski. The chairmen complained of another last-minute “data dump” by the commission. Also, the agency’s “practice of negotiating up to, and sometimes after, the Commission’s open agenda meeting appears to have reached an apex in the universal service proceeding,” they said. The Republicans asked Genachowski to say what changes were made to the USF order between the time it was considered and adopted. Meanwhile, the FCC sought comment Tuesday on additional ways to improve “transparency and efficiency” in Commission proceedings. “In particular, we seek comment on whether we should require commenters to file materials they cite in pleadings submitted in rulemaking proceedings, so that those materials are more easily accessible to all interested parties,” the FCC said. Comments are due 30 days after the notice’s publication in the Federal Register. Replies are due 45 days after publication. The House Commerce Committee marks up FCC process reform legislation Wednesday. Committee Democrats continued to oppose Walden’s HR-3309 in a memo that circulated late Monday.
NARUC might not appeal the FCC’s order on Universal Service Fund as a single bloc because states have varying views on the order, telecom industry officials told us. Though it’s uncertain if NARUC will appeal, the decision would depend on how much common ground there is among states, John Burke, chair of NARUC’s telecom committee, told us. Meanwhile, the industry has been lobbying at states to prevent appeals, a state official said. Despite a few states’ different views on preemption, NARUC has been consistent with its opposition to state preemption (CD Aug 26 p5).
Sprint Nextel began in Kansas its Lifeline program Assurance Wireless, the company said. The service includes a free cellphone and 250 free monthly voice minutes for eligible residents. Customers eligible for the program, which is funded by federal Universal Service Fund, include those who participate in Medicaid, Food Stamps/SNAP, General Assistance, Head Start, Supplemental Security Income, Temporary Assistance to Needy Families, United Tribes Food Distribution Program, Bureau of Indian Affairs General Assistance, Tribally Administered Temporary Assistance for Needy Families or the National School Lunch Program’s Free Lunch Program. Customers may also qualify based on low household income.
There seem to be many legal issues with the FCC’s USF Order, Wayne Jortner, senior counsel with Maine’s consumer advocate office, board member of USAC and a member of the NASUCA telecom committee, told us. Parts of the order don’t sufficiently adhere to the Telecom Act of 1996, he said. The FCC isn’t authorized to support a service (broadband) that it refuses to designate as a telecom service, he said. The cost model is the “brains behind the broadband plan” but it doesn’t yet exist, causing a great deal of uncertainty and making it hard to evaluate the merits of the program, he said. Consumer advocates aren’t in favor of impeding progress with unnecessary litigation but “if we determine that consumers are being harmed, we will consider legal challenges,” he said. The mandated broadband speeds would be too challenging for some companies while, and in the long term, insufficient for growing bandwidth needs, he said. Additionally, $4.5 billion as a total for all high-cost support, including new broadband subsidies, may not be sufficient to meet the broadband needs, he said. The real cost could be far higher, according to some analysts. But consumer advocates aren’t yet able to project the right number, Jortner said. The intercarrier compensation parts of the order would “artificially” remove a cost of doing business (use of incumbent’s networks) and leave revenue holes to be filled by rate increases, he said. The order also “unlawfully” preempts state jurisdiction of interstate access, he said. The order would increase prices for ILEC customers just as ILECs are losing customers to competitors, he said. Access recovery charge is “unnecessary and deceptive,” he said. The order also fails to address the downside of IP networks, he said.
TracFone took aim at the Link Up for America Coalition in a meeting with FCC staff, according to an ex parte notice filed by TracFone and published on docket 11-42 on Tuesday. “At the outset, there is no need to divert millions of dollars a year from the USF to provide Link Up subsidies (especially to wireless resellers) to provide service to low income households,” TracFone said in its letter, responding to a coalition filing from last week (http://xrl.us/bmjabi): “The Coalition asserts that Link Up support is somehow necessary to enable ETCs to initiate wireless services to low income consumers. That statement is unsupported and is facially false.” TracFone said it’s disturbed that the coalition views Link-Up as “a revenue replacement mechanism” and about the Coalition’s apparent belief that its members are entitled to Link-Up reimbursements for activation fees. “Nowhere has the Coalition provided any documentation as to which of its members -- if any -- are charged activation fees and how much -- if anything -- those members pay in activation fees,” TracFone said, saying the coalition’s claims of other wireless carriers’ activation fees “are especially curious.” Speaking of the coalition’s ex parte notice, TracFone said: “Nowhere does the Coalition offer any explanation as to why its two members’ activation fees are nearly double those charged by every other wireless carrier identified by the Coalition as having an activation fee. Neither does the Coalition indicate whether any of those seven named carriers impose activation fees on Lifeline customers. Not one of those carriers charges Lifeline customers activation fees. Apparently, only the Coalition members and a handful of minor carriers with similar strategies have the temerity to subject Lifeline customers to activation fees and even the greater temerity to ask the USF -- and those who fund the USF -- to subsidize those activation fees.” The FCC was expected to circulate an order on Lifeline Tuesday evening, and much of the recent lobbying has focused on Link-Up reimbursements. The coalition’s lawyer couldn’t be reached for comment Tuesday.