The FCC denied a Sandwich Isles Communications request to reconsider a 2016 order saying the Hawaiian telco received $27.3 million in improper USF payments from 2002 to 2015, which it was ordered to repay (see 1612060032). Sandwich Isles petitioned for reconsideration (see 1701050068) of "virtually all aspects" of the order, arguing the FCC ignored its legal arguments and factual submissions, "but in fact, the Commission painstakingly responded to those arguments and submissions and deemed them unpersuasive," said the unanimous agency order issued Thursday in docket 10-90. It was adopted Dec. 4; no commissioner statements were attached. "SIC fails to take account of the text of the [Communications] Act and the reasonable policies underlying the Commission’s universal service rules, which among other things preclude recovery for facilities that are not actually used to provide service in covered areas," said the new order. "While SIC points to evidence that it claims shows that its cost accounting did in fact comply with Commission rules, that evidence is either incomplete, unpersuasive, or else outright contradictory to other facts and claims made elsewhere by SIC." The commission remains committed "to service for customers on the Hawaiian Home Lands," the order added. "SIC still has ongoing obligations to its customers, under both the Communications Act and Commission rules, to continue to provide interstate telecommunications services. SIC may not discontinue service without our express authorization. Nor, however, may SIC ignore our accounting rules and universal service safeguards going forward." An SIC representative didn't comment.
It's possible but increasingly unlikely that Senate leaders will agree to confirm FCC Commissioner Brendan Carr and Democratic commission nominee Geoffrey Starks via unanimous consent (UC) before noon Thursday as part of an end-of-session package of President Donald Trump's nominees, Senate sources and lobbyists told us Wednesday. The nominees appeared to have their chances boosted shortly before the start of Christmas recess when Sens. Joe Manchin, D-W.Va., and Dan Sullivan, R-Alaska, lifted their holds on Carr (see 1812200060). Senate leaders intended to advance Carr and Starks as a pair. A move to those confirmations remained unlikely until an agreement to end the partial government shutdown, which entered its 12th day Wednesday (see 1901020048). A spokesperson for Senate Majority Leader Mitch McConnell, R-Ky., emphasized the chamber could confirm any of Trump's nominees up until the 115th Congress expires at noon Thursday but only under UC. Trump would need to renominate Carr and Starks for them to be considered again during the 116th Congress. Spokespersons for Senate Minority Leader Chuck Schumer, D-N.Y., and the Senate Commerce Committee didn't comment. The FCC Wireline Bureau sought comment Wednesday on Alaska-based GCI Communications' application for a review of the bureau's reduction in its FY 2017 USF Rural Health Care Program support (see 1811130040). That's seen as one factor that led Sullivan to place his hold on Carr. Comments on GCI's application, docket 17-310, are due Feb. 4, replies Feb. 19.
The FCC extended USF operating expense relief to Mescalero Apache Telecom, finding the tribal carrier's broadband deployment level fell below a 90 percent threshold set in April (see 1804050028). Mescalero argued the percentage of housing units in its study area capable of getting 10/1 Mbps connectivity was 88.97 percent at best, noted a 4-0 commission order in Wednesday's Daily Digest approving the carrier's petition for reconsideration (see 1805310032): "We agree that Mescalero Apache fell below the 90% benchmark and should be granted relief, including the same retroactive relief granted to other carriers in the [April] Order." Commissioner Mike O'Rielly, who had pushed for the 90 percent cutoff to better target relief, said he voted to grant the petition "with real trepidation regarding the precedent we set and the incentives we create." Mescalero "may be able to demonstrate that its deployment is barely under the applicable threshold, but I still struggle to make sense of why this carrier is deserving or in need of a waiver for additional opex funding," he said. The order "highlights the problem of relying on Form 477 data for purposes of providing USF subsidies -- a use for which the data was never originally intended," he said: The FCC allows Mescalero "to mount its own informal challenge, unencumbered by objective challenge process parameters. ... [T]his ad hoc approach is not sufficiently transparent, leaves too much up to discretion, and is a poor substitute for a thorough comment opportunity." The "Form 477 Data problem is very real, and we don’t help matters by foregoing a meaningful challenge process for purposes of convenience," he added. Chairman Ajit Pai had said he would seek to extend opex relief to more tribal carriers, including Mescalero and Sacred Wind Communications (see 1810050044), but a circulated draft addressed only Mescalero's petition (see 1811130063). The FCC didn't comment Wednesday on Sacred Wind's petition.
The FCC will continue to make key systems available to the public, even as staff are sent home starting mid-day Thursday, said a detailed announcement (see 1901020043). Many, including staff, feared systems would be taken offline as they were in 2013 (see 1812280021). Staff held an all-hands meeting Wednesday afternoon to be briefed on the details before release of the public notice, agency and industry officials said.
Political stars look aligned to pass a Colorado net neutrality bill in 2019, after Democrats gained a power trifecta in November’s election and flipped the attorney general’s office (see 1811070043), Democratic state lawmakers formulating such legislation told us. Incoming Attorney General Phil Weiser (D) stands ready to defend such a Colorado law, he said in another interview. Also, the Democrats said they want to increase support for broadband through additional funding and changes to state law.
Litigation looms over a lengthy FCC jurisdictional separations freeze despite buy-in from key state regulators. Critics plan a court challenge to a Dec. 17 order extending the freeze on rules allocating most regulated costs to intrastate rather than interstate services, which they say eases illegal cross-subsidies. “We’re going to definitely appeal," said Bruce Kushnick, New Networks Institute executive director. Commissioner Mike O'Rielly, chairman of a federal-state joint board on separations, and others said the rules are becoming less relevant, applying to fewer carriers.
With tough choices looming, FCC officials don't appear to have decided on rules or other actions stemming from a proposal to bar use of USF money to make purchases from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain. Industry officials said supply chain issues are expected to be a focus at CES Jan. 8-11 in Las Vegas.
The federal government appeared Friday evening to be on the verge of a partial shutdown due to disagreement between the Senate and president and a supportive House majority over the inclusion of $5 billion in border wall funding in a continuing resolution to temporarily fund government through Feb. 8. A CR set to expire at midnight Friday covers funding for the FCC, FTC and the departments of Commerce and Homeland Security and others.
Recent revisions to Alaska USF took effect Thursday and will be printed in Register 228 of the Alaska Administrative Code in January, the Regulatory Commission of Alaska said in a Wednesday order closing docket R-18-001. RCA last summer voted to sunset state USF in five years and adopt a plan by the Alaska Telephone Association (see 1810250035).
The Minnesota Public Utilities Commission voted 4-1 Thursday to increase the Telephone Assistance Program (TAP) surcharge by 7 cents to 10 cents per month, funding a $7 credit for the poor that’s double the current amount, and to increase outreach around the program. The Minnesota Office of Attorney General proposed a higher fee and increased outreach to improve lagging program participation (see 1812050022). Increasing outreach without raising the credit wouldn’t likely much affect participation, PUC Chair Nancy Lange (D) said at the livestreamed meeting, her final before she departs the agency. “We’ve tried a lot of different things, maybe we haven’t tried enough, and it seems like the last, most logical tool in the toolbox is increase the credit.” Supporting the $7 credit, Commissioner Dan Lipschultz (D) wants to “go as high as we can go” under statutory limits. “See what happens, and that will be instructive for the legislature,” he said. “If they see very little impact, then we know we need to do other things,” such as review whether TAP should support wireless or broadband, he said. Commissioner Katie Sieben (D) opposed the increase, saying that “we’re trying to reach a larger pool of low-income customers, and to do that, we’re essentially increasing their telephone fee.” Seven cents more “may not sound like a whole lot on the surface,” said Minnesota Telecom Alliance CEO Brent Christensen: “But when you put it together with everything else” on the bill including USF charges, “you’re talking about significant increases.”