Tri-County Telephone Faces Questions in Case Against Hurricane Relief Order
The lawyer for the Tri-County Telephone Association challenging the FCC’s nearly $1 billion USF telecom rebuild program for Puerto Rico and the U.S. Virgin Islands faced questions Thursday as the U.S. Court of Appeals for the D.C. Circuit heard oral argument in TCT's case (docket 20-1003 in Pacer). Judges challenged the group’s argument that the FCC doesn't have authority to use high-cost USF support dollars for disaster relief.
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“This case primarily concerns whether the FCC is permitted to expand universal service support by hundreds of millions of dollars for purposes unintended by Congress,” said TCT attorney Keenan Adamchak, of Fletcher Heald. The FCC failed to seek comment on the impact on carriers like TCT before launching the program, he said.
“If a fire destroys all telecommunications in Wyoming and Montana, you can get nothing out of the [USF] to replace that or repair it on an emergency or other basis?” asked Judge Merrick Garland. “You could not get any money if there’s disaster?”
Adamchak said that's correct: “Congress did not explicitly state disaster relief is a universal service principle.” Under the Communications Act, high-cost support is limited to “ensuring both reasonable services and reasonable rates,” he said. “If you don’t have any service at all, then you don’t have access to services,” Garland responded. “I’m not sure what reading could mean that providing access, if otherwise you get no access, isn’t covered,” he said: “Isn’t the first question whether you get service at all?”
“Tell me what in the statute supports your conclusion about disasters,” asked Judge David Tatel. “What language in the statute does that?”
“The problem here is disaster relief constitutes … a new support mechanism altogether,” Adamchak said. Disaster relief restores service, “it’s not ensuring that services are there and continue to be there, to high-cost areas,” he said. “In a sense, the FCC created their own problem here,” Adamchak said. “You don’t think the hurricane created the problem?” Garland asked.
Judge Harry Edwards questioned whether funds can ever be used for restoration under TCT's theory. “You clearly have no access if it’s lost,” he said.
The FCC made a “reasonable” decision to subsidize communications infrastructure in the territories “that would be resilient to future storms,” said agency attorney Sarah Citrin. “The commission was subsidizing the kinds of facilities that are necessary to provide access to critical communications services,” she said.
Garland asked Citrin about the level of spending by the FCC. “The commission made a high-level determination based on what it saw as far as progress toward restoration from the initial, immediate distribution of relief, which was a little over $65 million,” she said. “There was a real urgency to repairing these networks. … This was one-time interim relief.”
The regulator didn’t write a “blank check,” Citrin said. “It put in place safeguards,” she said: “It specifically delineated the permitted uses of these funds. It required carriers to get certifications before and after receiving the funds. It directed the administrator of the [USF] to conduct audits.”
The agency can spend money on the USF only as authorized by the law, Garland observed. He asked about FCC claims TCT doesn’t have standing to challenge as a USF recipient. “It’s not like it’s unlimited how much the FCC can increase contributions,” he said. Without the spending, an additional $1 billion would be available to pay for other projects, he said.