The FCC approved establishing an Enforcement Bureau Fraud Division to combat waste, fraud and abuse in USF and other programs, said an order released Monday after being adopted unanimously Jan. 29 before new Commissioner Geoffrey Starks was sworn in. Noting bureau staffers already investigate and prosecute fraud in FCC programs, the order said its purpose "is to create a division, comprised of existing staff, that will be dedicated to taking enforcement actions against fraud in the USF and other funding programs." The division "will work collaboratively with other law enforcement entities," including the FCC Office of Inspector General, and "will consist of the individuals who presently focus on fraud cases." Rakesh Patel, the bureau's USF Strike Force director, will be division chief, joined by other bureau staff, emailed an FCC spokesperson. "It is vital that we maintain a steady eye on [USF] programs to address the unfortunate reality that, over the years, too much money that should have gone to connect American consumers and businesses has been lost, stolen, or misused," said EB Chief Rosemary Harold. The division will be established following review and approval by the Office of Management and Budget and the House and Senate Appropriations committees, and after Federal Register publication. The order said the division's creation will be a structural change, not a substantive one, and doesn't require any rule changes: "The notice and comment and effective date provisions of the Administrative Procedure Act contained in 5 U.S.C. §§ 553(b) and (d) do not apply."
The California Public Utilities Commission won't assess surcharges on text-message revenue for state USF, after an FCC order persuaded state commissioners to pull back a proposal to affirm texting is subject to public purpose program fees. Despite consumer group opposition (see 1901140045), the CPUC voted unanimously Thursday for the reversal in docket R17-06-023 without discussion as part of the consent agenda. The Utility Reform Network is "working with other groups to find a way to turn back this troubling precedent," emailed TURN Managing Director-San Diego Christine Mailloux. "We are disappointed in the Commission’s decision to move forward so quickly without putting sufficient effort into alternatives to ensure that California’s public purpose programs, serving our most vulnerable consumers, are well funded and supported," she said. "Carriers’ profit and public relations machine won out."
FCC Chairman Ajit Pai criticized a USF rate floor and plans to seek action to "protect rural Americans from unjustified government-mandated rate increases in coming months." He said the rate floor requires USF-backed carriers to charge a minimum amount or lose subsidies. "The rate floor has forced many rural customers to pay higher rates than some of their urban counterparts," without corresponding benefits, he said, sharing concerns of Sen. Tom Cotton (R) and others in the Arkansas delegation (exchange posted Thursday in docket 19-9). Pai noted the FCC in 2017 froze the rate at $18 per month through July 2019 to head off increases to $20 and $22, and adopted an NPRM seeking comment on whether to eliminate the rate floor. NTCA officials say the rate floor could cause rural rates to "skyrocket." Separately, rules prevented the FCC from granting two telco co-op relief requests for increased model-based high-cost USF support, said Pai, responding to Sen. Roy Blunt, R-Mo. (here), and Rep. John Shimkus, R-Ill. (here).
The Schools, Health & Libraries Broadband Coalition urged the FCC to resolve open issues in its USF Rural Health Care Program and make changes to its Telecom Program and Healthcare Connect Fund components. SHLB proposals included increasing a $581 million annual cap to $800 million, adopting a deadline for processing RHC applications, clarifying a “rural” definition and providing support “for 95 percent of the difference between the urban and rural rates (except in Alaska) in order to reduce funding delays and expedite application approvals,” said a release on comments posted Thursday in docket 17-310 responding to a public notice. Six months after a funding year 2018 application deadline, “a sizable number of RHC applicants still have no idea whether they will be funded,” said Executive Director John Windhausen. “The demand for RHC funding has exceeded the funding cap the last two years, yet there’s still no policy or precedent for how funding should be allocated when this occurs. The program has become shrouded in ambiguity and uncertainty, and we fear that the rural healthcare providers most in need will withdraw from the program.” AT&T said the FCC should phase out the Telecom Program outside Alaska and adopt "E-rate best practices" during the transition. Alaska Communications proposed rural and urban rate calculations "using an administratively simple, lowest corresponding price rule, or a convenient rate matrix, which would serve as a ceiling in the case of rural rates, and a floor in the case of urban rates, to ensure that support remains predictable and the size of the RHC program remains reasonable." TeleQuality Communications suggested "a market-based approach as an alternative to establishing a more complicated regulatory regime for the Telecom Program." GCI Communication urged the FCC to "ensure that rural rates are determined by the market," without additional rate regulation or cost studies. GCI supplemented an application for review seeking FCC reversal of a Wireline Bureau reduction in its RHC support by 26 percent in FY 2017 (see 1811130040) with information it "could not have known or addressed at the time" of its appeal.
Rep. Anna Eshoo, D-Calif., is defending a letter she and other lawmakers wrote the FCC and DOJ Antitrust Division to support T-Mobile's proposed buy of Sprint amid criticism from groups opposed to the deal. House Communications Subcommittee Chairman Mike Doyle, D-Pa., said he's not concerned opinion among subcommittee Democrats may be divided on the transaction. House Communications and the House Judiciary Antitrust Subcommittee are to examine T-Mobile/Sprint during a Feb. 13 hearing (see 1901280051). Two other House Communications members joined Eshoo in signing the letter -- Reps. Billy Long, R-Mo., and Kurt Schrader, D-Ore.
The Oklahoma Corporation Commission should promote competitive neutrality by supporting legislation to require state USF collection at the point of sale (POS) for prepaid services sold by third-party retailers, CTIA commented, posted Monday in docket PUD-201800066. Legislators prefiled two such bills (HB-2606 and SB-730) for introduction Feb. 4 when the session opens. Most Oklahoma USF contributors including postpaid wireless can collect contributions through line items on their bills, but prepaid carriers don’t have a direct retail relationship with customers who buy service through third parties, CTIA said. The OCC doesn’t have jurisdiction over the third-party retailers so it can't require they remit surcharges, it said.
Huawei Technologies fired back at the Telecommunications Industry Association for arguing the National Defense Authorization Act means the FCC can bar use of USF money to buy from companies that “pose a national security threat” to U.S. communications networks or its supply chain (see 1812100045). TIA’s views are “far afield of the actual provisions of law relevant to the Commission’s proceeding,” Huawei said in docket 18-89. TIA “repeatedly conflates distinct provisions of the NDAA; for example, by arguing that ‘Section 889 applies to the USF programs’ without distinguishing between different paragraphs within that section that contain different terms,” Huawei said: It “transparently tries to reframe the issue by characterizing any reading of the statute with which it disagrees as ‘creating a USF exception.’” TIA "stands by our comments and reply comments," a spokesperson said.
House Communications Subcommittee leaders diverged on approaches to net neutrality legislation, during the State of the Net conference Tuesday. Chairman Mike Doyle, D-Pa., staked out a partisan agenda on that and other telecom policy issues. Ranking member Bob Latta, R-Ohio, emphasized the need for continued bipartisanship on the House Commerce Committee as the GOP settles into its new role as the minority party. Their comments came ahead of House hearings on net neutrality and T-Mobile's proposed purchase of Sprint, which also got attention Tuesday (see 1901290040).
FCC Chairman Ajit Pai's decision to move up a Feb. 21 monthly meeting to Feb. 14 was welcomed, given potential for another shutdown after Feb. 15 (see 1901290014). Pai announced Tuesday the tentative agenda would be the same five drafts originally planned for Wednesday's meeting, now item-less due to the recent shutdown (see 1901230058). Separately, the FCC delayed to Feb. 8 deadlines on many filings due Jan. 8-Feb. 7 (see 1901290043).
The full federal government got back to work Monday, after a prolonged partial shutdown that shuttered the FCC, FTC, NTIA and other agencies overseeing communications policy. Incoming FCC Commissioner Geoffrey Starks will be sworn in Wednesday by Chairman Ajit Pai in an eighth-floor conference room and will participate in the commissioners’ meeting that follows, said industry officials. President Donald Trump signed off Friday on a continuing resolution to reopen the FCC and other shuttered agencies through Feb. 15, after the House passed the measure as expected (see 1901240016).