AT&T said the FCC should increase transparency in the rural telehealth USF program and take other steps to combat abuse before considering increasing a $400 million annual funding cap. The agency should make applicant funding requests public, as it does in the E-rate program, and target support to "mileage based services to address" a statutory "reasonable comparability requirement," said the telco's filing posted Friday in docket 17-310 on a meeting with Wireline Bureau staff. AT&T "also discussed extending E-rate 'best practices' to the Rural Health Care (RHC) Program, including E-rate gift rules, bid evaluation criteria, eliminating discounts for voice service," and "allowing beneficiaries to be reimbursed directly" by the Universal Service Administrative Co. But Alaska's Sitka Counseling said the current funding is "inadequate to enable rural communities" to use the program to improve healthcare and lower overall costs. "The FCC should increase the budget for the rural health care support mechanisms to reflect inflation over the past two decades and increases in the level of support available from those mechanisms, as well as increased technology and telecommunications demands due to our [Health Insurance Portability and Accountability Act] legal obligations, advances in telemedicine capabilities, changes in patient expectations and standards of care, and new demands from skilled nursing facilities," said a Sitka filing posted Monday.
An appeals court won't hold oral argument on a Consolidated Communications challenge to an FCC order that denied SureWest Telephone a waiver from a federally mandated USF state certification deadline the company missed in 2012. A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said in a brief order (in Pacer) Friday it will dispose of the petition based on briefs and other filings in Consolidated Communications v. FCC, No. 16-1431. The government argued the commission reasonably denied the request because SureWest confusion leading to a filing error wasn't a "special circumstance" (see 1705110036). Consolidated took over SureWest.
Lifeline USF resellers challenged tribal support restrictions in an FCC order that commissioners adopted 3-2 in November with an NPRM to begin overhauling the low-income subsidy program (see 1711160021). "Petitioners seek relief from portions of the Order that will (1) limit enhanced Tribal Lifeline support to 'facilities-based' service and (2) limit Lifeline support to 'rural' Tribal areas pursuant to a newly established FCC definition," said the National Lifeline Association, Assist Wireless, Boomerang Wireless (enTouch) and Easy Telephone Services in a petition (in Pacer) to the U.S. Court of Appeals for the D.C. Circuit that surfaced Friday in National Lifeline Association v. FCC, No. 18-1026. NLA is a trade group representing Lifeline providers and vendors. The companies said the actions were arbitrary and capricious, an abuse of discretion, exceeded FCC authority and violated the Administrative Procedure Act. Meanwhile, Chairman Ajit Pai said the FCC had resolved seven notices of apparent liability from 2013 and 2014 against Lifeline providers (see 1712290032), and "expects to resolve two more soon"; three others remained with the agency's Office of Inspector General. The FCC has an enforcement action on its agenda for tomorrow's commissioners' meeting but hasn't identified what it involves. Pai was responding to a Dec. 1 letter from Senate Homeland Security and Government Affairs Committee ranking member Claire McCaskill, D-Mo. She asked for details on commission steps to recover $89.5 million in proposed fines against 12 Lifeline providers for alleged program violations (only one case had been resolved at that time). McCaskill's office didn't comment Monday.
Most early commenters resisted FCC Lifeline proposals to retarget low-income USF subsidy support toward facilities-based broadband providers and away from resellers. Consumer groups and state regulators opposed the plan, NTCH was supportive, and a group against government waste urged the agency to pause for now. Some comments were filed last week in docket 11-42 on an NPRM and notice of inquiry, even though the FCC Tuesday extended the Jan. 24 deadline to Feb. 21 (see 1801230042). The proposals would eliminate subsidies for wireless resellers, cutting off about 70 percent of Lifeline participants, and move support from urban to rural areas, said Consumer Action, opposing capping program funding and requiring subscriber co-pays. A Pennsylvania collection of low-income individuals, service providers, organizations and consumer groups objected to the proposed facilities-based focus, said voice-only support shouldn't be phased out, and opposed proposals for a hard budget cap and lifetime limits. The LGBT Technology Partnership also opposed cutting off support to resellers. State regulatory commissions from Michigan, Missouri, Indiana and Minnesota expressed concerns about the proposed move to facilities-based support. New York City Council Member Peter Koo of Queens opposed FCC proposals that would scrap service to "75 percent of current participants," shift voice support to rural areas, cap Lifeline benefits and cap the program's funding. Backing the FCC proposals and asking that its previous petition for reconsideration be deemed granted, NTCH said that agency "forbearance" from applying a "facilities-based requirement" of the Communications Act "has led to massive fraud and abuse, a drain on the USF Treasury, and hoodwinking of consumers." Citizens Against Government Waste urged the FCC to wait and reconsider the proposal after it sees whether implementing a national verifier of consumer eligibility cuts down on abuse. Minnesota supported FCC proposals to restore full state ETC authority; Michigan backed removing federal broadband designations, with modifications for states lacking broadband regulatory authority; and Missouri said states need flexibility to make Lifeline program adjustments.
The federal government should support Puerto Rico to the same extent it has for past hurricane victims in the 50 states, said Puerto Rico Telecommunications Regulatory Board (PRTRB) President Sandra Torres in an interview last week. Torres updated FCC commissioners and staff in Tuesday and Wednesday meetings in Washington (see 1801250041). Telecom infrastructure restoration continues in Puerto Rico, but funding is also needed to advance the territory’s connectivity, she said. More can be done to help Puerto Ricans, said an official from the territory's telecom industry association.
FCC commissioners heard updates on Hurricane Maria recovery from Puerto Rico Telecommunications Regulatory Board President Sandra Torres in separate meetings Monday and Tuesday, said ex-parte letters (here and here) posted Thursday in dockets 10-90 and 17-344. “Still, months after the landfall of Maria in Puerto Rico, electrical power, telecommunications infrastructure and services, and basic business and government services face serious headwinds in restoring operations to pre-hurricane levels,” the letter said. Torres urged support for high-cost rural areas, including advance release of $76 million in USF disbursements. She said 92 percent of towers and 67 percent of wireline services are restored.
The FCC urged a court to throw out a Sandwich Isles Communications mandamus request to order the agency to disburse USF subsidies withheld from the carrier since July 2015. "The extraordinary relief sought by SIC is entirely unwarranted," given "ample" legal discretion "to deny subsidies to companies like SIC that engage in fraud, waste, or abuse" in the USF program, said an opposition filed Tuesday with the U.S. Court of Appeals for the D.C. Circuit (In re Sandwich Isles v. FCC, No. 17-1248). The FCC said a jury in July 2015 convicted CEO Albert Hee of tax fraud, citing evidence he authorized using millions of dollars in corporate funds to pay personal expenses. The commission said its investigations found that SIC improperly received more than $27 million in USF payments in 2002-2015 and "improperly recouped" from the fund more than $6.7 million in "inflated" management fees for Hee family expenses. The FCC said it would lift the suspension of USF payments only after it determines how SIC will reimburse the fund, something the company "has not yet indicated." The SIC request doesn't meet mandamus standards and should be dismissed for lack of jurisdiction or denied for lacking "compelling equitable grounds," the agency said. SIC didn't comment Thursday. Another FCC filing last week disputed Sandwich Isles' bid to recover more than an estimated $1.9 million in annual costs from a National Exchange Carrier Association pooling mechanism (see 1801190059).
House Commerce Committee ranking member Frank Pallone, D-N.J., asked the Universal Service Administrative Co. Thursday to send him copies of the reports on audits it did over the past three fiscal years of the USF High-Cost and Rural Health Care programs over ongoing concerns about waste, fraud and abuse in both programs. Pallone began reviewing possible abuses of the High-Cost program last year and successfully got the GAO to begin an investigation of the program. “I am concerned that the FCC is failing to adequately address waste, fraud and abuse in the legacy portion of the High-Cost Program and is instead directing its resources solely to smaller programs” like Rural Health Care, Pallone said in a letter to USAC CEO Radha Sekar. Pallone and other House Democrats sought a GAO review earlier this week of FCC work to deploy its national verifier program to determine consumer eligibility for Lifeline funds. The commission said in early December it was delaying the launch of the national verifier program until early this year amid security issues (see 1712010042). USAC didn't comment.
E-rate school and library USF support has done much, but more efforts are needed, said FCC Commissioner Jessica Rosenworcel at an E-Rate event Wednesday. She praised Sen. Ed Markey, D-Mass., and former Sen. Jay Rockefeller, D-W.Va., for spearheading the 1996 legislation that authorized the program's creation 20 years ago. "Connecting our schools and libraries is not enough. Because preparing the next generation for digital success now requires connections not just at school -- but at home," she said according to written remarks. "More can be done to address the Homework Gap. Carriers across the country are pitching in by making available low-cost broadband service. Libraries everywhere from Maine to Missouri are loaning out wireless hot spots -- and letting students borrow connectivity for schoolwork. Rural school districts are putting Wi-Fi on buses and turning ride time into connected time for homework. Communities are mapping out where free online access is available for student use. These efforts deserve applause. More importantly, they deserve expansion."
Rural telcos urged FCC changes to a USF operations expense cap that "undermines the offering of standalone broadband services" by high-cost support recipients. The cap is based on voice loops, which "can impose an artificially low ceiling on corporate operations expenses for companies as their consumers increasingly" opt for broadband-only connections, said a filing Monday in docket 10-90 on meetings Alexicon, NTCA and WTC Communications had with aides to Chairman Ajit Pai and to Commissioners Mignon Clyburn, Mike O'Rielly and Brendan Carr. The "cap can start to apply and reduce support for companies like WTC not because the company’s corporate expenses have increased or because consumers have ceased to buy services from the company, but rather merely because consumers are choosing to buy standalone broadband services as prior reforms intended to enable," said the filing. The parties recommended rule changes to base corporate opex recovery "on connections (rather than only voice loops) that would be defined as a working loop or a broadband-only loop," and to base the calculation of broadband-only loops on data as of Dec. 31 "of the calendar year preceding each July 31 filing" to eliminate reporting inconsistencies. Pai last week circulated a draft rural USF orders and NPRM (see 1801160040 and 1801170048).