Senate Homeland Security Committee ranking member Claire McCaskill, D-Mo., is again pressing the FCC for answers about “waste, fraud and abuse” in the Lifeline USF program in the wake of recent findings from the agency's Office of Inspector General. Rep. Nydia Velázquez, D-N.Y., and 47 other Democrats, meanwhile, wrote FCC Chairman Ajit Pai, as expected (see 1805020061), urging him not to cut the Lifeline budget as part of his revamp plan. Democrats repeatedly criticized Pai's Lifeline revamp plan (see 1801230075, 1803210061, 1803300045 and 1804260068).
FCC Chairman Ajit Pai could be close to gaining majority support for his proposals to provide additional USF support to Puerto Rico and the U.S. Virgin Islands, in response to last year's hurricanes. Commissioner Brendan Carr said this week he voted for an order, and Commissioner Mike O'Rielly's office told us Thursday he's optimistic his concerns will be resolved and he will soon be able to vote on the item. Pai circulated a draft order and NPRM in March seeking to provide $256 million in additional USF support and repurpose another $698 million to help restore and upgrade storm-damaged communications networks, with $750 million for Puerto Rico and $204 million for the U.S. Virgin Islands (see 1803060039 and 1803160051).
DOD said Wednesday it’s barring stores on U.S. military bases from selling phones made by Chinese companies Huawei and ZTE, citing ongoing national security concerns about Chinese telecom equipment manufacturers. The White House and National Security Council meanwhile didn’t comment on a report that President Donald Trump’s administration is considering an executive order that would further restrict some Chinese telecom equipment manufacturers’ ability to sell their products in the U.S. Huawei and ZTE devices “may pose an unacceptable risk to [the department's] personnel, information and mission," a Pentagon spokesman said in an email. "In light of this information, it was not prudent for the Department's exchanges to continue selling them to DoD personnel.” Defense can’t dictate that troops won't buy Huawei or ZTE phones from other stores but they “should be mindful of the security risks posed by the use” of the devices, the spokesman said. The House Intelligence Committee warned beginning in 2012 about the companies’ ties to the Chinese government. The committee’s 2012 report recommended the U.S. “view with suspicion” attempts by the companies to continue making inroads into the U.S. market (see 1210100053 or 1210100091). The White House's pending executive order could bar companies doing business with the federal government from using network or telecom equipment made by companies the U.S. deems a national security risk, The Wall Street Journal reported. "While we have no comment on individual actions, protecting critical infrastructure, including the supply chains associated with such infrastructure, is a critical part of protecting America’s national security and public safety," a White House spokeswoman emailed. Communications industry lawyers previously told us they anticipated executive actions from the White House on national security issues involving Chinese telecom equipment manufacturers and to address pressure for modifications of the "Team Telecom" reviews of foreign takeovers of U.S. communications assets (see 1804250045). The FCC approved 5-0 last month an NPRM that proposes to bar use of money in any USF program to buy equipment or services from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain (see 1804170038). FCC Chairman Ajit Pai initiated the NPRM amid pressure from Hill lawmakers about reports Huawei was set to begin selling its consumer products in the U.S. as soon as this year “with little or no modifications" to address privacy and cybersecurity concerns (see 1803230063). Huawei meets “the highest standards of security, privacy and engineering in every country,” including the U.S., the company said in a statement. “We remain committed to openness and transparency in everything we do and want to be clear that no government has ever asked us to compromise the security or integrity of any of our networks or devices.” ZTE didn’t comment.
General Communication Inc. urged "rapid completion" of rural healthcare USF commitments for funding year 2017 (ending June 30), and sought FCC relief from a $400 million program annual budget cap. "The delay in completing the commitments and disbursement process is threatening to disrupt GCI’s ability to undertake key network improvements to improve wireless and wireline broadband in Alaska during the coming construction season," said company filings (here and here) posted this week in docket 02-60 on meetings with Chairman Ajit Pai, Commissioners Brendan Carr, Michael O'Rielly and Jessica Rosenworcel, and their aides. Budget relief is needed for FY 2017 and "likely" for FY 2018, "given the large, continued increases in overall demand and the delayed announcement of the pro-rata reductions," GCI said (see 1803160040). "Finding additional funds to meet current demand in the short term, pending longer-term reforms in the rulemaking proceeding, will prevent disruption that would result from health care providers having to find additional funds in their health care budgets or being unable to pay their unexpectedly high costs of service due to the proration." Longer term, GCI stressed the need to prioritize support as the current pro-rata reductions "hit the highest cost to serve areas the hardest."
Rep. Nydia Velázquez, D-N.Y., is collecting lawmakers’ signatures for a letter to FCC Chairman Ajit Pai that will cite the importance of the Lifeline USF program in Puerto Rico as it recovers from hurricanes Irma and Maria as a reason not to cut the Lifeline budget as part of his revamp plan for the program. Pai proposed providing $954 million in high-cost USF support to help Puerto Rico and the U.S. Virgin Islands restore and upgrade their communications networks, which were damaged in the 2017 hurricanes (see 1803060039). Pai’s current Lifeline revamp proposal, meanwhile, would mean an estimated “75 percent of existing Lifeline customers in Puerto Rico would lose their telecommunications carrier,” Velázquez said in a draft letter circulating among lawmakers. “After many communities endured widespread lack of communications” after Hurricane Maria, “they should not be forced to endure additional hardship.” Velázquez got support from more than three dozen House Democrats and Sens. Kirsten Gillibrand, D-N.Y., and Elizabeth Warren, D-Mass., one Hill aide said. Velázquez’s office didn’t comment.
Comments are due June 1, replies July 2 on an FCC national security NPRM in docket 18-89, said a proposed rule in Wednesday's Federal Register. The NPRM adopted April 17 proposes to bar the use of money in any USF program to buy equipment or services from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain (see 1804170038). It also explores broader related issues (see 1804180053).
The FCC directed the Universal Service Administrative Co. not to reject E-rate requests for fiber USF support in funding year 2018 (starting July 1) because of discrepancies caused by "apparent confusion" over USAC changes to its online menu for submitting a form to solicit competitive service bids. "While USAC's efforts in August 2017 were intended to simplify the application and competitive bidding process for stakeholders, it now appears that a significant number of applicants were unclear about how to navigate the FCC Form 470 drop-down menu consistent with USAC's guidance," said a letter to USAC from Wireline Bureau Chief Kris Monteith and Managing Director Mark Stephens posted Tuesday. The letter also directed USAC to add clarifying language to the dropdown menu for FY 2019. USAC didn't comment Wednesday but it takes orders from the FCC.
Blame the Obama administration for a projected 15.52 percent reduction in USF support for small rural carriers over the next year, FCC Chairman Ajit Pai said Tuesday. Universal Service Administrative Co. Tuesday announced support calculations for the budget control mechanism for July 2018 and June 2019. “The prior Administration’s budget control mechanism has created constant uncertainty for small, rural carriers, endangering their ability to make long-term investment decisions to bring high-speed broadband to the millions of Americans who still lack it,” Pai said. “That’s why earlier this year we allocated $180 million to such carriers as a stop-gap measure to avert budget cuts for the current funding year. But now small carriers are facing even more severe cuts in the coming year, which will only exacerbate the digital divide in rural America.” It shows importance of a recent NPRM to review the budget control mechanism (see 1803230025), Pai said. “We’re still accepting public input on the Notice, but once that period has ended, I hope my colleagues will support my efforts to take action in the coming months.” Commissioner Jessica Rosenworcel didn't comment.
AT&T pressed the FCC to increase USF support for Puerto Rico and the U.S. Virgin Islands, as proposed by Chairman Ajit Pai. The "communications network situation" on the islands after Hurricanes Irma and Maria "remains serious," said filings (here and here) posted Thursday and Friday in docket 10-90 on meetings with aides to Commissioners Jessica Rosenworcel, Brendan Carr and Mike O'Rielly, following up on a previous meeting with Wireline Bureau staffers (see 1804230065). ATN International, parent of Virgin Islands Telephone (Viya), also backed additional USF support, meeting with Wireline and Wireless bureau staff, said a filing posted Monday.
The FCC partially granted a FairPoint Communications USF waiver request and opened a pleading cycle for competitive challenges to previously unidentified areas where the ILEC is seeking belated initial Connect America Fund broadband-oriented support. FairPoint, now owned by Consolidated Communications, sought waiver of a rule requiring carriers accepting CAF Phase I, Round 2 incremental support to identify areas by wire center and census block where they will deploy broadband to meet deployment duties. Partial waiver "will preserve FairPoint’s efforts to advance broadband availability in unserved areas and promote the efficient and effective use" of CAF I support," said a Wireline Bureau order in docket 10-90 and in Monday's Daily Digest. It established "a limited challenge process for determining whether any unsubsidized competitors serve any of the 185 census blocks FairPoint did not identify during the earlier challenge process as of April 27." Challenges are due May 29 and a FairPoint response is due June 29, said a bureau public notice: challengers must show "they currently offer Internet service at speeds of 3 Mbps downstream and 768 kbps upstream or higher in the identified census blocks." FairPoint/Consolidated didn't comment.