PASADENA, Calif. -- A federal judge appeared skeptical Monday of an FCC safe harbor threshold that lets communities charge wireless carriers up to only $270 yearly for each small-cell facility. Municipalities and others are challenging FCC wireless infrastructure orders in a consolidated case at the 9th U.S. Circuit Court of Appeals. Judges’ decision about whether the commission legally pre-empted local authority in the right of way could have broader impact for local authority in telecom (see 2002060056).
FCC Chairman Ajit Pai proposes holding Phase I auctions for the Rural Digital Opportunity Fund on Oct. 22. Pai circulated a public notice among commissioners Thursday proposing procedures for the Phase I auctions, which would allot up to $16 billion of the $20.4 billion USF rural broadband program, he blogged, outlining his agenda for the Feb. 28 meeting. The RDOF auction procedural PN is one of eight items for what Pai is calling "spectrum month." Drafts are expected to be released Friday. Pai's proposal Thursday to pay up to $9.7 billion to C-band incumbents to free the spectrum for a Dec. 8 auction (see 2002060057) will lead the February meeting.
FCC Chairman Ajit Pai proposed accelerated relocation payments of up to $9.7 billion for C-band incumbents to clear the band quickly for an auction to start Dec. 8, in a speech (see 2002060031) Thursday at the Information Technology and Innovation Foundation. Those would be above compensation for relocation costs, estimated to be between $3 billion and $5 billion, he said. Pai has the three votes he needs for approval at the commissioners' Feb. 28 meeting (see 2002060048) with quick endorsements of Commissioners Mike O’Rielly and Brendan Carr.
The FCC will take $31 million from TeleQuality Communications in repayments and forfeitures of USF payment claims to settle violations of competitive bidding and rate rules and for overbilling the rural healthcare program, the agency said Wednesday. Education Networks of America acquired the company in 2018. The Enforcement Bureau consent decree requires TeleQuality designate a compliance officer and file regular compliance reports for five years: The company admitted to giving improper incentives to healthcare providers to encourage them to award contracts to TeleQuality. Commissioner Geoffrey Starks called this "one of the most egregious" violations of USF he can recall. He said the FCC should have taken stronger enforcement action because "the company will simply repay a portion of its ill-gotten gains. In cases of fraud on the Universal Service Fund, it is imperative that the fund be made whole." He suggested the company should be debarred from further RHC participation. "According to the FCC, there were activities from 2015-2017 that were in non-compliance with rules," a TeleQuality spokesperson emailed. "TeleQuality was acquired in January 2018. The new ownership and management ran an internal review and found non-compliance in procedures, which were proactively reported to the FCC. The matter has been settled with the FCC through a consent decree, and TeleQuality looks forward to providing excellent customer service under new ownership."
FCC Commissioner Geoffrey Starks said one 2020 priority is looking at ways the agency can try to ensure artificial intelligence and facial recognition technologies respect privacy and aren't discriminatory in application. At a Congressional Tech Staff Association/Congressional Black Associates event Wednesday, Starks said it's "a moral imperative" to look at broadband connectivity beyond just the existence of infrastructure but also as an affordability and digital literacy issue. He said his criticisms of the Rural Digital Opportunity Fund -- as reflected in his partial dissent (see 2001300001) -- included it not prioritizing "future-proof" connections at speeds that will be relevant a decade from now. The approved RDOF order hasn't been released; Starks said some issues are "still getting tweaked." He said the agency has to put more priority on holding connectivity providers accountable when they decide not to build out networks after all, pointing to more than 10 percent of Connect America Fund Phase II auction winners defaulting. He said federal dollars for rural broadband providers should come with requirements for offering low-income service options. Starks said the FCC "has done good work" tackling supply chain vulnerability with its USF supply chain rules adopted last fall (see 1911220033), but there also needs to be attention paid to Huawei and ZTE technology already in U.S. telecom networks. He said forthcoming enforcement actions announced by FCC Chairman Ajit Pai for carriers seemingly disclosing consumers’ real-time location data (see 2001310058) are "long overdue." Starks again supported the Expanding Broadcast Opportunities Act (HR-3957) sponsored by Rep. G.K. Butterfield, D-N.C., which would restore the minority tax certificate. He called the nearly nonexistent full-power TV station ownership by women and minorities "a shame."
Chairman Ajit Pai is likely to seek a vote on a proposal for a 10-year, $9 billion 5G Fund for Rural America at the March FCC meeting, industry officials said. The agency opened docket 20-32 on the fund Monday. A vote is possible at the Feb. 28 meeting, but industry officials said the March 31 meeting is more likely. Pai is expected to release a blog Thursday on the February meeting.
The FCC got some industry support for new supply chain rules designed to protect U.S. networks. But groups representing rural carriers raised concerns, and Huawei said the proposals aren't legal. Commissioners approved rules 5-0 in November barring equipment from Chinese vendors Huawei and ZTE in networks funded by the USF, and sought comment on whether to expand the prohibition (see 1911220033). Commenters urged coordination, especially with the Department of Homeland Security, and regulatory humility. Comments were posted Monday and Tuesday in docket 18-89.
Concerns continue over new Rural Digital Opportunity Fund language in the order that was approved along party lines at Thursday's FCC meeting and could restrict support in areas that get state USF-like funding (see 2001300001). Stakeholders Tuesday were awaiting the order's release. "We are working to get it out as soon as possible," an FCC spokesperson emailed.
The Q2 USF contribution factor will drop from 21.2 percent in Q1 to 19.1 percent, projected telecom consultant Billy Jack Gregg Monday.
ZTE asked the FCC to exempt it from the list of covered companies deemed a threat to U.S. networks. The FCC approved national security supply chain rules 5-0 in November, barring equipment from Chinese vendors Huawei and ZTE in networks funded by the USF and establishing rules that could block other providers (see 1911220033). “ZTE has settled its case relating to export control and sanctions violations” and isn't listed by the Commerce or Treasury Departments for any export control or sanctions restrictions targeting it,” it said Monday in docket 18-89: ZTE’s “is committed to ensuring that our Company conducts business only in compliance with all applicable laws where we are operating, including U.S. export and sanctions laws and regulations. ZTE has spent hundreds of millions of dollars to implement a compliance program relating to U.S. export control compliance regulations and continues to work to enhance its compliance program.” The company said it's also making progress on cybersecurity: “Providing secure and trustworthy products and services for our customers is one of ZTE’s highest priorities." Comments are also coming in on a related Further NPRM. NTCH and Flat Wireless said they understand the security concerns: “Companies who innocently bought such equipment, or were forced to buy such equipment because of unfunded federal mandates, with no knowledge that it could be used as a portal for foreign interception should not be forced to bear the financial burden of destroying that equipment without compensation.” The State E-Rate Coordinators’ Alliance said the FCC should exempt USF recipients outside the E-rate program from the prohibition. “The greatest threat to national security involves the use of covered equipment and services in Eligible Telecommunications Company networks rather than in the more localized facilities of other USF recipients such as schools and libraries,” the alliance said.