FCC Chairman Ajit Pai said he plans to circulate a draft order "later this year" intended to ensure rural carrier high-cost USF support is adequate and efficient over the long term. Noting a March NPRM, Pai agreed the commission "must take a close look at expanding access to and funding for our small-carrier cost model and that we must end the unpredictable cuts to carriers not on the model," said his response to a letter from Kevin Cramer, R-N.D., and 129 House colleagues (exchange posted Monday in docket 18-5). "Increased funding will boost broadband deployment in rural America, and additional reforms will put our high-cost system on a more efficient path so that every American can benefit from the digital revolution," he said. Pai cited recent FCC actions aimed at boosting RLEC high-cost USF support and rural healthcare support, responding to concerns from Reps. Ben Ray Lujan, D-N.M., and Peter Welch, D-Vt. (exchange). The chairman defended FCC efforts to better target Lifeline USF support and combat abuse in the program, responding to concerns of Rep. Gregory Meeks, D-N.Y., and 57 House colleagues about agency proposals (exchange). Pai cited FCC Lifeline and high-cost efforts to help Puerto Rico and the U.S. Virgin Islands recover from hurricane damage, responding to the concerns of Rep. Nydia Velazquez, D-N.Y., and 47 House and Senate colleagues about the storm devastation and the Lifeline proposals' potential impact on the islands (exchange). Pai said the recent transfer of USF funds from a private bank to the U.S. Treasury "reduces risks" and maintains "rigorous management practices and regulatory safeguards," without disrupting revenue flows; he was responding to a letter from Gwen Moore, D-Wis., and eight House colleagues (exchange).
The FCC approved enhanced USF support for Puerto Rico and the U.S. Virgin Islands to help them recover from 2017 hurricanes Irma and Maria, as expected (see 1803060039). Commissioners voted 4-1 May 8 to adopt an order and NPRM, which was released Tuesday, with Commissioner Jessica Rosenworcel partially dissenting and departing Commissioner Mignon Clyburn participating. The agency will make available $750 million in subsidies through an "Uniendo a (Bringing Together) Puerto Rico Fund" and $204 million through a "Connect USVI Fund." About $256 million of it is additional funding, the rest repurposed; and about $64 million will be provided immediately and almost $900 million over the mid-to-long term.
NARUC "strongly disagrees" with an FCC Lifeline proposal to prohibit pure resellers from being part of the low-income consumer telecom subsidy program. "Non-facilities-based carriers, currently serving 75 percent of eligible users, should continue to receive Lifeline funds, in part, because, even with a transition period, the potential to disrupt and even eliminate service to literally millions of eligible users is obvious," said a filing Monday in docket 17-287 by General Counsel Brad Ramsay on meetings with aides to Chairman Ajit Pai and Commissioner Brendan Carr. He said the record shows almost no support for the proposal, or evidence it would spur additional broadband investment. NARUC backs the FCC's "determination" that the commission can't bypass state authority to designate Lifeline eligible telecom carriers. An NPRM proposed to end federal designation of Lifeline broadband providers and pre-emption of states' role in designating certain ETCs (see 1711160021).
A court consolidated challenges to FCC Lifeline tribal limits and set a briefing schedule. The National Lifeline Association and resellers filed a January petition (in Pacer) seeking relief from the commission's late 2017 order, which restricted enhanced Tribal Lifeline USF support by targeting it to "facilities-based" service and newly defined "rural" areas (see 1801290020). The U.S. Court of Appeals for the D.C. Circuit had established a briefing schedule for that case, but this week it granted (in Pacer) a motion to consolidate the case with Crow Creek Sioux Tribe's March petition (in Pacer). Crow Creek challenges the same decisions and alleges "the commission did not meaningfully consult with Tribal authorities about the impact of these changes on native communities as required by law." Both petitioner opening briefs are now due May 9, the government's response brief June 25 and petitioner reply briefs July 16 in National Lifeline Association v. FCC, No. 18-1026, consolidated.
The Retail Industry Leaders Association objected to FCC Lifeline USF proposals that would "weaken" the program and reduce or eliminate "availability to thousands -- perhaps millions -- of low income families." A "proposal to categorically exclude wireless resellers from Lifeline would be especially problematic," RILA filed Wednesday in docket 17-287. "Removal of those providers from the Lifeline program would leave low-income households with no available wireless Lifeline options." It also criticized a possible FCC budget cap that would deny services to qualifying households and a proposal to require low-income participant co-pays. The group said its 200-plus members have $1.5 trillion in annual sales and many are vendors of wireless services for major carriers. The FCC didn't comment Friday.
Cable and telco executives said Congress should resolve the net neutrality dispute and end policy flip-flops that, one suggested, threaten broadband investment more than heavy regulation. "It's time to put the rules in place and move on," said Comcast Senior Executive Vice President David Cohen at a Free State Foundation conference Tuesday. But the executives expressed more hope than optimism, with some pessimistic about the near-term prospects. Recent revelations and concerns about the use of Facebook data could drive privacy legislation discussions, some said. Others focused on 5G wireless and fiber deployment efforts.
Sens. Tammy Duckworth, D-Ill., and Rob Portman, R-Ohio, led Thursday filing of the Inmate Calling Technical Corrections Act, which would update rules for inmate calling services rate settings and clarify FCC authority to adjust the rules in the future. Commissioners Mignon Clyburn and Jessica Rosenworcel, along with Capitol Hill Democrats and others, meanwhile, voiced concerns during a Thursday Voices for Internet Freedom Coalition event about FCC policy direction on ICS, net neutrality and changes to the USF Lifeline program.
Bitcoin-derived blockchain technology might improve an FCC Lifeline program that is ineffective and has seen "considerable fraud," said Mark Jamison, American Enterprise Institute visiting scholar and director of the University of Florida's Public Utility Research Center. "Studies consistently demonstrate" the low-income USF support program "has little impact and is costly," he blogged Tuesday. Blockchain transactions are conducted using "wallet" software that contains private and public keys to protect security, along with computer "miners" to verify transactions, he wrote. For Lifeline, "each person that is enrolled in one of the qualifying federal programs and that does not have a phone would be assigned a wallet suitable for the service for which the person wants to use the subsidy," he said. "The wallet might be an app on a secure smartphone if the person wants to use the subsidy for mobile service or on a piece of hardware that could plug into a smartphone, laptop, or tablet computer." Universal Service Administrative Co. each month "could transfer the Lifeline subsidy from a USAC wallet to the recipient’s wallet," he wrote. "The recipient could then use the currency to pay all or part of the service fee, depending on how much the person is paying for service. This payment would be made from the recipient’s wallet to a wallet designated by his or her service provider."
State regulators face competing Lifeline draft resolutions at NARUC's winter meeting on an FCC proposal to target low-income USF subsidies to facilities-based providers (see 1801300023 and 1801300023). A draft resolution to urge the FCC to continue allowing resellers to receive Lifeline funding appears to have more support than a draft that welcomed the proposed shift, some told us Friday, though compromise or postponement of consideration is always possible. Competing Lifeline draft resolutions were pulled from the last meeting (see 1711130035). At the winter meeting, which was to begin Sunday and run through Wednesday, NARUC is also to consider draft telecom resolutions on nationwide number portability and pole-attachment overlashing.
Most early commenters resisted FCC Lifeline proposals to retarget low-income USF subsidy support toward facilities-based broadband providers and away from resellers. Consumer groups and state regulators opposed the plan, NTCH was supportive, and a group against government waste urged the agency to pause for now. Some comments were filed last week in docket 11-42 on an NPRM and notice of inquiry, even though the FCC Tuesday extended the Jan. 24 deadline to Feb. 21 (see 1801230042). The proposals would eliminate subsidies for wireless resellers, cutting off about 70 percent of Lifeline participants, and move support from urban to rural areas, said Consumer Action, opposing capping program funding and requiring subscriber co-pays. A Pennsylvania collection of low-income individuals, service providers, organizations and consumer groups objected to the proposed facilities-based focus, said voice-only support shouldn't be phased out, and opposed proposals for a hard budget cap and lifetime limits. The LGBT Technology Partnership also opposed cutting off support to resellers. State regulatory commissions from Michigan, Missouri, Indiana and Minnesota expressed concerns about the proposed move to facilities-based support. New York City Council Member Peter Koo of Queens opposed FCC proposals that would scrap service to "75 percent of current participants," shift voice support to rural areas, cap Lifeline benefits and cap the program's funding. Backing the FCC proposals and asking that its previous petition for reconsideration be deemed granted, NTCH said that agency "forbearance" from applying a "facilities-based requirement" of the Communications Act "has led to massive fraud and abuse, a drain on the USF Treasury, and hoodwinking of consumers." Citizens Against Government Waste urged the FCC to wait and reconsider the proposal after it sees whether implementing a national verifier of consumer eligibility cuts down on abuse. Minnesota supported FCC proposals to restore full state ETC authority; Michigan backed removing federal broadband designations, with modifications for states lacking broadband regulatory authority; and Missouri said states need flexibility to make Lifeline program adjustments.