FCC Commissioner Mike O'Rielly sought Universal Service Administrative Co. help in "identifying and eradicating potential waste in the E-rate program" for schools and libraries due to applicants seeking subsidy funding to overbuild existing broadband networks. O'Rielly noted he dissented from a 2014 order that allowed E-rate discounts for "self-construction" but rejected recommendations to prohibit funding such projects in areas that already had broadband. He said he continues to hear concerns that USF support is "being wasted by E-rate applicants" on overbuilds, which he said is "especially problematic" when the existing networks are being subsidized, including by the high-cost USF program. "In those instances, ratepayer dollars are being used to support artificial competition potentially jeopardizing service to the broader community," he wrote in a letter posted Friday to USAC CEO Chris Henderson. O'Rielly said he was particularly troubled by a recent news article in which the school system in Arlington County, Virginia, discussed plans to seek E-rate funding to pay for a backup fiber network. He said he doesn't believe that's permitted under the FCC's rules, and regardless, he saw no policy justification to support such projects. O'Rielly sought answers from Henderson by Feb. 17 to a series of questions to better understand the scope of overbuilding under the program. USAC and Arlington County Schools didn't comment.
ISPs supported an effort to spread broadband to Arizona rural schools through the state USF but urged the Arizona Corporation Commission to place limits on how money is used and how much is collected. The ACC held a workshop on the initiative last month (see 1701300033). “This initiative should target rural areas [and] should be of limited duration and for a limited amount, and should limit support to commercially-provisioned, finished services,” CenturyLink commented Tuesday in docket RT-00000H-97-0137. Cox said the program should be limited to last-mile projects and not support overbuilding where another carrier has facilities. Cox and CenturyLink agreed the program shouldn't fund dark fiber. AT&T supported CenturyLink and Cox in proposing to cap the rural schools broadband fund at $8 million. Cox and AT&T said the ACC should limit collection of the funds for one year, while CenturyLink proposed two years.
The Navajo Nation has "grave concerns" about a Universal Service Administrative Co. decision "that would force over 1,000 low-income Navajo Nation residents to lose essential phone service" under the Lifeline USF subsidy program. USAC has directed Cellular One (Smith Bagley) to obtain documentation from about 3,000 customers to verify their identities, said a filing by Navajo Nation President Russell Begaye posted Wednesday in FCC docket 11-42. Most of the residents live in "unreachable areas" and have limited access to mail and electric service, and many are elderly and disabled. He said travel is particularly difficult in winter, and a local state of emergency was declared in recent days. "Yet USAC demands that all of these people travel these distances by February 18, 2017, in the middle of the long Navajo winter or lose their phones," he wrote. Cellular One is doing extensive outreach, but more than 1,000 customers remain and need more time, Begaye said, asking the FCC to direct USAC to resolve the issue without jeopardizing the safety of Navajo people.
Two federal judges focused on whether a state regulatory group had legal standing to challenge an FCC order that allowed interconnected VoIP providers to acquire phone numbers directly from numbering authorities, rather than through telecom carriers. In oral argument at the U.S. Court of Appeals for the D.C. Circuit Wednesday, Chief Judge Merrick Garland and Judge Judith Rogers asked what harms NARUC's members suffered under the order, which didn't classify VoIP as a Title II telecom service under the Communications Act. NARUC General Counsel Brad Ramsay said state commissions lost VoIP certification authority and oversight over numbering issues, but FCC counsel Matthew Dunne said the order preserved most state numbering rights.
The National Association of State Utility Consumer Advocates said a court should overturn the FCC's new Lifeline broadband provider (LBP) process that bypasses state decisions to designate USF-eligible telecom carriers (ETCs). No provision of the Communications Act "gives the FCC authority to preempt congressional delegation to state commissions of this primary role in determining whether a common carrier qualifies for ETC designation," NASUCA told the U.S. Court of Appeals for the D.C. Circuit in an intervenor brief (in Pacer) filed Monday in NARUC v. FCC, No. 16-1170. "Section 214(e) does not give the FCC authority to create a subset of ETCs that, according to the FCC's preemption, can never be subject to state jurisdiction. The question of state jurisdiction is not ambiguous and is not the FCC's decision to make." The new Republican-run FCC Friday asked the court to hold the case in abeyance while it decides how to proceed, and it noted the petitioner (NARUC) and supporting intervenor (NASUCA) didn't oppose a 90-day delay (see 1702060060). The commission Friday also revoked nine previous LBP designations and said it would reconsider their petitions (see 1702030070).
The FCC invited input on a Hawaii agency request for guidance on a Sandwich Isles exclusive license and whether it conflicts with a federal mandate against barriers to competitive telecom entry. Comments are due Feb. 20. replies Feb. 27, on a Department of Hawaiian Home Lands letter, said a Wireline Bureau public notice posted Tuesday in docket 10-90. The DHHL said Thursday it's "deeply troubled" by FCC findings that Sandwich Isles violated agency rules "to secure excessive and unwarranted USF support," and said it understood that if a study-area waiver is terminated, the company would be ineligible for subsidies. DHHL asked "that care be taken so that native Hawaiian homesteaders and other subscribers located on Hawaiian home lands are not inadvertently harmed in the process." DHHL said any Sandwich Isles' wrongdoing should be addressed without cutting USF support for broadband/telecom services to home land residents. Competition from other providers "may be viable in limited areas," but the agency believes "for the foreseeable future USF support will be needed in substantial areas" of the home lands. It sought guidance on whether an exclusive license it gave Sandwich Isles Communications (SIC) in 1995 is a potential barrier to competitive entry under Section 253(a) of the Communications Act. Meanwhile, the FCC's December notice of apparently liability and forfeiture order (see 1612060032) proposing a $49 million fine "is without merit, contrary to the record factual evidence, legally wrong and must be set aside," SIC said in a response posted Monday. SIC said the FCC didn't issue one of the public notices it promised in asking the company to show cause why its USF eligibility shouldn't be revoked and study-area waiver retroactively denied. The basis "for these proposed draconian actions is nowhere spelled out but is presumably predicated upon the alleged conduct of SIC and its former principal," the company said. "The conduct that is complained of will not support the massive forfeiture proposed," it said. "There is no basis for the imposition of even more severe penalties." In recent weeks, there have been more than 1,000 fillings (some with multiple signatures) in docket 10-90 from Hawaiians voicing support for SIC's waiver and concern about FCC actions.
The FCC asked a court to hold off its reviews of two more commission cases: one involving USTelecom challenges to a 2015 technology transitions and 2014 backup power declaratory ruling, and another involving AT&T and CenturyLink challenges to 2014 and 2015 orders granting ILECs only partial forbearance from telecom regulations that left them subject to unsubsidized USF voice obligations. Holding the cases in abeyance will allow the FCC's new leadership to decide how to proceed regarding the issues in the cases, said two agency motions (here and here, in Pacer) Monday to the U.S. Court of Appeals for D.C. Circuit. The court granted the second abeyance motion Tuesday in a brief order (in Pacer) in AT&T v. FCC, No. 15-1038, which directed the FCC to file a status report by April 10 and every 60 days thereafter. Then-Commissioner and now-Chairman Ajit Pai and fellow Republican Commissioner Mike O'Rielly dissented from the tech transitions and backup power orders, while Pai partially dissented from both ILEC forbearance orders, with O'Rielly concurring on the 2014 order and partially dissenting from the 2015 order, the motions said. In the first case (see 1511160063), the FCC said USTelecom doesn't oppose the motion and joint intervenors "have almost all advised the Commission that they take no position on this motion" (not including the Pennsylvania Public Utility Commission and XO Communications). In the second (see 1607120073), the FCC said AT&T, CenturyLink and intervenor USTelecom consented to the motion.
FCC Chairman Ajit Pai defended a rollback of Lifeline broadband provider designations amid criticisms from Commissioner Mignon Clyburn, Rep. Frank Pallone, D-N.J., and others (see 1702030070 and 1702060062). "It’s vital that low-income Americans have access to communications services, including broadband Internet, which Lifeline helps to achieve," Pai wrote in a Tuesday blog post, which also reiterated his broader, initial efforts to close the digital divide. He recognized there are questions about why the Wireline Bureau issued a Lifeline broadband provider (LBP) reconsideration order Friday.
Chairman Ajit Pai will further change the way the FCC releases information to the news media and public, he said in a statement Monday, vowing not to release items publicly or to the news media until all commissioners have seen them. “During the past few years, the Chairman’s Office often briefed reporters or issued a blog about matters to be voted upon at the FCC’s monthly meetings before sharing those matters with Commissioners,” Pai said in a statement. “As a Commissioner, I thought that actions like these were inappropriate and disrespectful of other Commissioners.”
FCC Chairman Ajit Pai has gotten off to an active start in his first two weeks in the job. Several former FCC officials said early on, in contrast to former Chairman Tom Wheeler, Pai could have a tough time figuring out what to do once designated to lead the regulator, especially given the Republican emphasis on less rather than more regulation and the strong possibility Congress, not the FCC, will address ISP privacy and net neutrality rules. But Pai is already moving forward with a busy agenda, teeing up six items for the Feb. 23 commissioners meeting. Much of his early emphasis has been on closing the digital divide. But controversy arose Friday (see 1702030070).