Boozman Wants FCC IG To Eye 'Potential Violations' in Rate-of-Return Proceeding

“Universal service reform, the promulgation of the new alternative Connect America, seems to be done intentionally behind closed doors, which is why we will be meeting with the FCC’s IG shortly to discuss the potential violations of the Sunshine Act,” said Senate Appropriations Financial Services Subcommittee Chairman John Boozman, R-Ark. “So we’re going to put pressure on them, that’s what's going on. We’ve also requested a report from the GAO on the efficacy of the model. We’re going to continue to ratchet things up.” The goal is to “let the FCC know that we’re watching them and we expect things to be done in a fair and open manner,” Boozman added.

Boozman told us later no specific meeting with FCC Inspector David Hunt has been scheduled. “We just want to make sure all of this is being done in an open and fair process,” Boozman said in an interview. Although some Sunshine Act discussion surrounded the FCC’s March 31 Lifeline overhaul vote, similar scrutiny didn’t come up on the bipartisan rate-of-return overhaul the commission adopted last month. Boozman said he had no specific violation in mind that's prompting the outreach to the IG. The FCC declined to comment on Boozman's remarks.

“No, no, just lots of complaints from at home, from the people who have been dealing with this,” Boozman told us. “Lots of complaints from the people that it’s affecting. They just don’t feel like it has been open, transparent, all those kind of things. And [wonder] if the model itself is a model that works.” The aim in requesting a GAO study is “making sure the model is going to do what they say it’s going to do,” he said. Boozman confirmed the inquiry is independent of the appropriations measure he's putting together, saying his intent is to “get with some members and gin up some interest and go forward.”

A Boozman spokesman confirmed in an email to us concerns that the rate-of-return overhaul has "been hammered out behind closed doors, as that is what has been shared with him by sources close to the proceedings." If that's the case, the spokesman said, "it raises a number of red flags in terms of compliance with the sunshine law. ... We were informed that Chairman [Tom] Wheeler along with two Commissioners and a Commissioner’s COS [chief of staff]/Counsel attended an early February meeting to discuss the proposed USF Reform Order (A-CAM Model) with only two representatives from stakeholder groups. While the attendance of a Commissioner’s COS/Counsel is not completely out of the ordinary nor a direct violation of the Sunshine Act, it raised concerns about the COS being a proxy for their boss as was conveyed to us after the meeting ended. We also are aware of the possible Sunshine Act violations during the Lifeline discussion. This appears to be the modus operandi of the current leadership at the FCC." Boozman worries about these instances and others that appear to be FCC leadership's "blatant disregard for the legal framework" that Congress established, his spokesman said.

Boozman and other appropriators are putting together FY 2017 funding measures. He referred to the importance of spending USF money on rural broadband deployment and slammed the FCC for proposing using such money on agency operations such as enforcement. Appropriators shot down an FCC attempt to do so in FY 2016, and Wheeler again raised the idea this year.

Transferring such USF spending “aggravates that all-too-real perception of taking money and growing bureaucracy,” Boozman said. “I will do all I can to make sure that we don’t honor that request this year.”

“We still recognize the need to expand broadband” despite a tough year with limited funds, Rep. Robert Aderholt, R-Ala., chairman of the House Appropriations Agriculture Subcommittee, told NTCA members in a separate speech. The Agriculture Subcommittee has $451 million less in FY 2017 than in FY 2016 but Aderholt is maintaining levels of funding for the Rural Utilities Service (RUS) and is increasing the money for broadband under the Distance Learning, Telemedicine and Broadband Program. FY 2016 funding for that program is $36.87 million and the FY 2017 committee provision is $62.56 million. “These programs, along with others, narrow that digital divide that we’re trying to narrow as we move forward,” he said.

The House Appropriations Committee marked up the FY 2017 agriculture funding bill later Tuesday in a markup session lasting many hours into the afternoon. The bill is “fair and balanced,” Appropriations Committee Chairman Hal Rogers, R-Ky., said during the markup. “The Committee recognizes the advantages of extending broadband services, including the economic development opportunities and improved health care services that broadband technology provides,” said the draft committee report for the House agriculture funding bill. “Funding provided for the broadband programs is intended to promote availability in those areas where there is not otherwise a business case for private investment in a broadband network. The Committee directs RUS to focus expenditures on projects that bring broadband service to underserved households and areas.” House Appropriations staff also “encourages the Secretary to provide a report that identifies the specific challenges Indian Tribal Organizations (ITOs) have in gaining access to broadband service and provide a plan for addressing these challenges, including how the Community Connect program can assist ITOs.”

“We really are fighting the battle up here and pushing back,” Boozman told NTCA members. “And you’re getting ready to storm the Hill, and that’s a good thing.” He criticized the state of the U.S. economy but “we’re poised to get back on track again if we can just get some confidence back in the system,” he said. “We need to start building things again and balancing our economy out.”

During NTCA members’ Hill visits, “communicate that rural America has lagged behind and we need to do what we can to narrow that digital divide as a nation,” Aderholt recommended. “You can’t vote for us, but we can vote for you.”