Sen. Dan Sullivan, R-Alaska, told reporters he will meet Thursday with FCC Chairman Ajit Pai on the senator's concerns with commission handling of the USF Rural Health Care Program that led him to place a hold on Senate confirmation of Commissioner Brendan Carr to a term ending in 2023, as expected (see 1809120056). A planned October meeting between Sullivan and Pai was postponed after the Senate moved to adjourn early for campaigning (see 1810110062). “Hopefully, we'll get to a spot” where concerns about FCC handling of RHC are “resolved,” Sullivan said. Alaska-based GCI Communications appealed this week Wireline Bureau's reduction in its FY 2017 RHC support by 26 percent to $77.8 million (see 1811130040). “This isn't just about” GCI, Sullivan said. “This is about broader issues of predictability, transparency, how we're going to move forward on this writ large.” Sullivan's hold means the Senate must wait to confirm Democratic FCC nominee Geoffrey Starks because the intent is to advance the two as a pair (see 1809130059). Senate Commerce Committee Chairman John Thune, R-S.D., told reporters he's “trying to work with” Sullivan and the FCC “to see if there's some arrangement that can be worked out or some way that we can get this resolved” to allow confirmation of Carr and Starks this year. The agency didn't comment.
GCI Communications asked the FCC to reverse a Wireline Bureau reduction in its USF Rural Health Care Program support by 26 percent to $77.8 million for FY 2017 (see 1810110062). The decision "prescribes rates $28 million below those determined through competitive bidding in a competitive market -- which were also in line with commercial rates for comparable services, and supported by GCI cost studies -- and imposes an unstated methodology for FY2018 and FY2019," said an application for review posted Tuesday in docket 17-310, after GCI criticism of the cut (see 1810120057). Absent full commission review, the bureau order "will have dramatic and far-reaching consequences" for the RHC program, said the application. "The FCC has been a steadfast partner" in efforts to improve rural service, "which is why the abrupt reduction was so unexpected and puzzling," said GCI General Counsel Tina Pidgeon, calling the bureau decision "a disincentive" to Alaska carrier investment.
ORLANDO -- The FCC should extend the Mobility Fund II challenge process by more than three months to fix a deficient process, said a NARUC resolution cleared Monday by the Telecom Committee and Tuesday by the board. At NARUC's annual meeting (see 1811130035), the committee voted unanimously for the resolution after tweaking some language to address other commissioners’ concerns. Idaho Commissioner Paul Kjellander will step down as Telecom Committee chairman to join NARUC leadership, he said Monday.
Telecom interests view the shift to split partisan control next Congress as improving prospects for compromise on a broadband title in a likely revisit of an infrastructure package. President Donald Trump and House Minority Leader Nancy Pelosi, D-Calif., said after the Democrats gained control of the House in last week's elections that they believe a deal is possible on infrastructure (see 1811070054). Democrats as of Tuesday won 228 House seats to the Republicans' 199, with eight races undecided. The GOP held a 51-47 Senate edge, with two races undecided.
ATN International urged the FCC to give subsidiary Viya Stage 2 fixed-service USF support for improving storm-damaged broadband and voice service in U.S. Virgin Islands. It's the only ILEC "charged with serving the USVI in its entirety as the carrier of last resort, and the sole operator of a Territory-wide wireline broadband network," filed ATN on a meeting Wireline Bureau staffers, posted Thursday in docket 18-143. ATN noted "enormous differences between the USVI and Puerto Rico markets." It said Viya has restored services to all locations it served on its hybrid fiber-coaxial network before the 2017 hurricanes, with FCC Stage 1 fixed support (see 1808080011) covering $6.9 million of its $80 million in recovery costs. Viya needs "sufficient and stable" USF support and has deferred decisions on further hardening and extending its network, pending the FCC outcome. Competitors oppose allocating $186.5 million in USVI Stage 2 fixed support to Viya (see 1808090021).
FCC staff approved transfer of magicJack VocalTel's YMax Communications, magicJack SMB and Broadsmart Global licensees to B. Riley Financial. It's conditioned on B. Riley compliance with what was in a declaration and letter of agreement (LOA) with DOJ (see 1808160028), said the Wireline and International bureaus' public notice in docket 17-356 and Wednesday's Daily Digest. The PN said the LOA terms will automatically take effect if B. Riley doesn't "undertake a reorganization to remove the foreign ownership from the Licensees ownership structure" within three business days of the transaction's closing, which B. Riley said will be Nov. 14. The PN conditioned approval on B. Riley and licensee compliance, as agreed to in a Tuesday letter, with all final orders or consent decrees from FCC investigation into compliance of magicJack -- a VoIP and cloud communications provider -- with the Communications Act and commission rules, including to provide information to USF, numbering and telecom relay service administrators.
Voters delivered a split decision Tuesday in elections to Congress, as expected (see 1811050050 and 1811070002). The division between a Democratic House and Republican Senate reduces the likelihood for legislative progress on some divisive telecom issues but possibly opens up opportunities for compromise on others, officials and lobbyists said in interviews. The election resulted in turnovers to leadership of House and Senate telecom-focused committees. Many said they are now watching the tight race between Senate Commerce Committee ranking member Bill Nelson, D-Fla., and Republican Gov. Rick Scott.
A federal court rejected a 2014 California law requiring prepaid wireless fees and three California Public Utilities Commission resolutions implementing that law. In a Monday order (in Pacer) granting a MetroPCS motion for summary judgment, the U.S. District Court for Northern California ruled the law and resolutions “conflict with federal law and are therefore preempted and unconstitutional.” MetroPCS asked the court to declare unlawful and stop enforcement of three CPUC resolutions implementing the state's Prepaid Mobile Telephony Service Surcharge Collection Act, which required prepaid wireless customers to pay a surcharge supporting state USF and certain CPUC fees. The company argued the CPUC portion of the surcharge impermissibly assesses interstate voice and broadband data revenue, conflicting with federal law including the Communications Act, the 2000 Mobile Telecom Sourcing Act and the U.S. Constitution's dormant Commerce Clause. The agency said there's no conflict with federal law because the commission used an intrastate allocation factor to remove interstate and international charges from the surcharge base. “The Court agrees with MetroPCS that the usage of a mandatory intrastate allocation factor conflicts with federal law because it deprives carriers of the ability to treat as intrastate for universal service purposes the same revenues that they treat as intrastate for federal USF contributions,” wrote Judge Susan Illston. “By using the intrastate allocation factor as the sole method for assessing the CPUC fees, the CPUC has deprived carriers of the ability to rely on alternative allocation methodologies, such as their actual revenue data.” The court disagreed with CPUC argument that MetroPCS was "judicially estopped" from challenging because it proposed that CPUC adopt an intrastate allocation factor. MetroPCS may challenge because it supported a “reasonable” estimate of the intrastate portion and argued that the CPUC didn’t act reasonably, said Illston. The regulator and MetroPCS parent T-Mobile didn’t comment Tuesday.
A consolidated appeal of the FCC’s September wireless infrastructure order on state and local barriers to siting small cells will be heard by the 10th U.S. Circuit Court of Appeals, not the 9th Circuit, as sought by local governments, and that could be positive for the FCC, court observers said. The U.S. Judicial Panel on Multidistrict Litigation randomly picked the 10th Circuit Friday (see 1811020061). AT&T, Sprint and the Puerto Rico Telephone Company also appealed the order, forcing a lottery. AT&T’s appeal in the U.S. Court of Appeals for the D.C. Circuit was left out of the lottery.
The USF contribution factor could drop in Q1 to 19.7 percent, from Q4's 20.1 percent, of carrier U.S. interstate and international (long-distance) telecom end user revenue, said industry consultant Billy Jack Gregg's email update Friday, citing a Universal Service Administrative Co. demand projection in FCC docket 06-122. But the factor could be higher than 19.7 percent if the long-term decline in the industry's revenue base continues in Q1, he said, noting an expected 2018 base of $51 billion would be the lowest in USF history. USAC's Q1 revenue projection is due at the end of November. Overall, USF demand for Q1 was $2.02 billion, $34.4 million less than in Q4, with a high-cost fund decrease of $51.6 million the biggest factor, he said.