Ian Cohen

FCC staff said TeleCircuit violated anti-slamming rules by changing consumers' preferred telecom providers without their consent. The Consumer and Governmental Affairs Bureau granted complaints after the company failed to respond. "TeleCircuit must remove all charges incurred for service provided to Complainants for the first thirty days after the alleged unauthorized change" under liability rules, said an order in Wednesday's Daily Digest: "Any charges imposed by TeleCircuit on the subscribers for service provided after this 30-day period shall be paid by the subscribers to the authorized carrier at the rates the subscribers were paying to the authorized carriers" when the unauthorized change was made. The firm didn't comment.

Sandwich Isles Communications said the FCC used "red herring arguments that fail to rebut" the carrier's mandamus request for urgent court relief ordering agency disbursement of withheld USF subsidies. Government opposition "ignores the facts and exigent circumstances that compelled" SIC's petition "and which the FCC seeks to sweep under the rug," said a company reply (in Pacer) Tuesday to the U.S. Court of Appeals for the D.C. Circuit (In re: Sandwich Isles, No. 17-1248). "The FCC seeks to confuse the Court with irrelevancies and fundamentally mischaracterizes" the relief sought, "misrepresents" commission proceedings and "ignores significant facts" on the USF amount at issue. Sandwich Isles said it wants the court to require the FCC to direct the Universal Service Administrative Co. to determine the USF amount the carrier is owed and disburse it within seven days, without which SIC "will run out of money to pay its employees, jeopardizing" telecom service for Hawaiian Home Lands native people. The FCC/DOJ urged the court to dismiss the petition as unwarranted given the commission's "ample" legal discretion to deny USF subsidies "to companies like SIC that engage in fraud, waste or abuse" (see 1801250018).

The FCC issued an order Wednesday setting final rules for a Connect America Fund auction of USF subsidies for fixed broadband and video services in areas traditionally served by major telcos. The 48-page text resolving petitions for reconsideration was adopted 5-0 by commissioners Tuesday. They also approved 5-0 a public notice on procedures for the reverse auction scheduled to start July 24 (see 1801300032).

Most applicants for FCC E-rate school and library discounts say there are clear benefits, though they find navigating the program and its process cumbersome, said E-rate consultant firm Funds for Learning CEO John Harrington in a filing posted Monday in docket 13-184 on discussions with officials of the FCC Wireline Bureau Telecom Access Policy Division. More than 118,000 school and library sites, 50 million K-12 students and millions of library patrons benefit from E-rate funding, he said. Noting a nationwide survey of applicants, he said 93 percent of respondents believe "Wi-Fi is critical to fulfilling their organization's mission" and 75 percent believe they "have more students and library patrons connected to the internet" directly because of the discounts, but only "33% agree the E-rate is fast, simple and efficient." He said a decline in program participation since 2015 slowed and "steady" participation is forecast for 2018, and while broadband demand has "grown significantly," related E-rate funding stayed "flat." John Wade, CEO of Alabama Supercomputer Authority, which submits E-rate applications on behalf of 137 of 141 school districts in the state, said the "bandwidth needs of the consortium are anticipated to have increased by a factor of 1,335% from year 2012, while spending will have only increased by 25%," according to another Funds for Learning filing.

Some telecom parties hope the FCC will modify broadband location assumptions in a draft Connect America Fund Phase II fixed-service subsidy auction item on the agenda for Tuesday's commissioners meeting. An industry official said Monday the FCC should address concerns that a broadband cost model overestimates the actual number of locations to which auction winners would have to build broadband (see 1801220047). "I hope the FCC will address it because the draft language would create a great deal of risk for potential bidders and could significantly reduce participation in the auction," said another stakeholder. Another also hoped the FCC will at least provide smaller providers greater flexibility if it sticks with census block groups as the smallest geographic bidding unit. The FCC didn't comment.

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.

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.

Small rural providers urged the FCC to simplify Connect America Fund auction of subsidies for fixed broadband-oriented services. "Many are concerned about the Auction’s complexity and the ways in which its structure may favor larger providers," said a filing posted Thursday in docket 10-90 by small electric co-operative, telco and cable officials who met with Chairman Ajit Pai and aides to all commissioners. A draft CAF Phase II auction item containing orders and a public notice is on the agenda for Tuesday's commissioners meeting (see 1801090050). If the FCC permits package bidding, "it could minimize the harm to smaller providers by: (1) reducing the minimum bidding unit from census block groups to census blocks; (2) limiting the overall size of a package bid to the county level; and (3) reducing the minimum scale percentage to 50%," said the rural interests. They encouraged the FCC to: increase flexibility of anti-collusion rules that complicate small providers' ability to use consultants; require spectrum-based providers to submit propagation maps and wireline providers to provide network maps; reconsider a draft PN proposal to scrap a "question asking an applicant to identify the assumptions it intends to make regarding subscription rate and peak period data usage"; not let satellite providers bid in any round for more locations than they have capacity for; and keep current bid weights for broadband performance tiers by adopting draft denial of a Hughes reconsideration petition.

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).