Two federal judges focused on whether a state regulatory group had legal standing to challenge an FCC order that allowed interconnected VoIP providers to acquire phone numbers directly from numbering authorities, rather than through telecom carriers. In oral argument at the U.S. Court of Appeals for the D.C. Circuit Wednesday, Chief Judge Merrick Garland and Judge Judith Rogers asked what harms NARUC's members suffered under the order, which didn't classify VoIP as a Title II telecom service under the Communications Act. NARUC General Counsel Brad Ramsay said state commissions lost VoIP certification authority and oversight over numbering issues, but FCC counsel Matthew Dunne said the order preserved most state numbering rights.
The National Association of State Utility Consumer Advocates said a court should overturn the FCC's new Lifeline broadband provider (LBP) process that bypasses state decisions to designate USF-eligible telecom carriers (ETCs). No provision of the Communications Act "gives the FCC authority to preempt congressional delegation to state commissions of this primary role in determining whether a common carrier qualifies for ETC designation," NASUCA told the U.S. Court of Appeals for the D.C. Circuit in an intervenor brief (in Pacer) filed Monday in NARUC v. FCC, No. 16-1170. "Section 214(e) does not give the FCC authority to create a subset of ETCs that, according to the FCC's preemption, can never be subject to state jurisdiction. The question of state jurisdiction is not ambiguous and is not the FCC's decision to make." The new Republican-run FCC Friday asked the court to hold the case in abeyance while it decides how to proceed, and it noted the petitioner (NARUC) and supporting intervenor (NASUCA) didn't oppose a 90-day delay (see 1702060060). The commission Friday also revoked nine previous LBP designations and said it would reconsider their petitions (see 1702030070).
The FCC invited input on a Hawaii agency request for guidance on a Sandwich Isles exclusive license and whether it conflicts with a federal mandate against barriers to competitive telecom entry. Comments are due Feb. 20. replies Feb. 27, on a Department of Hawaiian Home Lands letter, said a Wireline Bureau public notice posted Tuesday in docket 10-90. The DHHL said Thursday it's "deeply troubled" by FCC findings that Sandwich Isles violated agency rules "to secure excessive and unwarranted USF support," and said it understood that if a study-area waiver is terminated, the company would be ineligible for subsidies. DHHL asked "that care be taken so that native Hawaiian homesteaders and other subscribers located on Hawaiian home lands are not inadvertently harmed in the process." DHHL said any Sandwich Isles' wrongdoing should be addressed without cutting USF support for broadband/telecom services to home land residents. Competition from other providers "may be viable in limited areas," but the agency believes "for the foreseeable future USF support will be needed in substantial areas" of the home lands. It sought guidance on whether an exclusive license it gave Sandwich Isles Communications (SIC) in 1995 is a potential barrier to competitive entry under Section 253(a) of the Communications Act. Meanwhile, the FCC's December notice of apparently liability and forfeiture order (see 1612060032) proposing a $49 million fine "is without merit, contrary to the record factual evidence, legally wrong and must be set aside," SIC said in a response posted Monday. SIC said the FCC didn't issue one of the public notices it promised in asking the company to show cause why its USF eligibility shouldn't be revoked and study-area waiver retroactively denied. The basis "for these proposed draconian actions is nowhere spelled out but is presumably predicated upon the alleged conduct of SIC and its former principal," the company said. "The conduct that is complained of will not support the massive forfeiture proposed," it said. "There is no basis for the imposition of even more severe penalties." In recent weeks, there have been more than 1,000 fillings (some with multiple signatures) in docket 10-90 from Hawaiians voicing support for SIC's waiver and concern about FCC actions.
The FCC asked a court to hold off its reviews of two more commission cases: one involving USTelecom challenges to a 2015 technology transitions and 2014 backup power declaratory ruling, and another involving AT&T and CenturyLink challenges to 2014 and 2015 orders granting ILECs only partial forbearance from telecom regulations that left them subject to unsubsidized USF voice obligations. Holding the cases in abeyance will allow the FCC's new leadership to decide how to proceed regarding the issues in the cases, said two agency motions (here and here, in Pacer) Monday to the U.S. Court of Appeals for D.C. Circuit. The court granted the second abeyance motion Tuesday in a brief order (in Pacer) in AT&T v. FCC, No. 15-1038, which directed the FCC to file a status report by April 10 and every 60 days thereafter. Then-Commissioner and now-Chairman Ajit Pai and fellow Republican Commissioner Mike O'Rielly dissented from the tech transitions and backup power orders, while Pai partially dissented from both ILEC forbearance orders, with O'Rielly concurring on the 2014 order and partially dissenting from the 2015 order, the motions said. In the first case (see 1511160063), the FCC said USTelecom doesn't oppose the motion and joint intervenors "have almost all advised the Commission that they take no position on this motion" (not including the Pennsylvania Public Utility Commission and XO Communications). In the second (see 1607120073), the FCC said AT&T, CenturyLink and intervenor USTelecom consented to the motion.
FCC Chairman Ajit Pai defended a rollback of Lifeline broadband provider designations amid criticisms from Commissioner Mignon Clyburn, Rep. Frank Pallone, D-N.J., and others (see 1702030070 and 1702060062). "It’s vital that low-income Americans have access to communications services, including broadband Internet, which Lifeline helps to achieve," Pai wrote in a Tuesday blog post, which also reiterated his broader, initial efforts to close the digital divide. He recognized there are questions about why the Wireline Bureau issued a Lifeline broadband provider (LBP) reconsideration order Friday.
Chairman Ajit Pai will further change the way the FCC releases information to the news media and public, he said in a statement Monday, vowing not to release items publicly or to the news media until all commissioners have seen them. “During the past few years, the Chairman’s Office often briefed reporters or issued a blog about matters to be voted upon at the FCC’s monthly meetings before sharing those matters with Commissioners,” Pai said in a statement. “As a Commissioner, I thought that actions like these were inappropriate and disrespectful of other Commissioners.”
FCC Chairman Ajit Pai has gotten off to an active start in his first two weeks in the job. Several former FCC officials said early on, in contrast to former Chairman Tom Wheeler, Pai could have a tough time figuring out what to do once designated to lead the regulator, especially given the Republican emphasis on less rather than more regulation and the strong possibility Congress, not the FCC, will address ISP privacy and net neutrality rules. But Pai is already moving forward with a busy agenda, teeing up six items for the Feb. 23 commissioners meeting. Much of his early emphasis has been on closing the digital divide. But controversy arose Friday (see 1702030070).
The USF carrier contribution factor could rise in Q2 from 16.7 percent to 16.8 percent of interstate and international U.S. telecom revenue, assuming the industry contribution base stays the same, said industry consultant Billy Jack Gregg in an email update Thursday. The contribution base has been eroding over time as long-distance revenue fell, but there can be quarterly quirks. Gregg said Universal Service Administrative Co. Wednesday projected USF demand for Q2 would increase $14.7 million to $1.99 billion, with demand rising in the high-cost, E-rate and rural healthcare programs but declining in the Lifeline low-income program. "Out of period adjustments" were the main reason for the increased USF demand, he said. USAC revenue projections are due at the beginning of March, at which time it will be possible to nail down the Q2 contribution factor, he added.
FCC Chairman Ajit Pai should adopt the Mobility Fund Phase II, several senators recommended in a letter Thursday. “As you move forward with MFII, we ask that your efforts help to incent wireless carriers to preserve, upgrade, and expand mobile broadband in rural America, rather than degrade and reduce competition in areas that need it most,” said the letter, led by Sens. Roger Wicker, R-Miss., and Joe Manchin, D-W.Va. “Competing in a capital-intensive environment, wireless carriers need long-term certainty of ongoing support to invest, deploy, maintain, and update their networks that provide vital mobile broadband services in rural areas. As the best example, certainty should come in the form of sufficient and predictable USF support in both the implementation of MFII and the transition away from legacy support mechanisms over the next several years.” More than 20 other senators signed the letter, including Sens. Roy Blunt, R-Mo., Maria Cantwell, D-Wash., Al Franken, D-Minn., Shelley Moore Capito, R-W.Va., and Ron Johnson, R-Wis. Competitive Carriers Association President Steve Berry lauded the letter. “The Senators are exactly right -- the FCC has the ability to provide this much-needed certainty now -- by ensuring sufficient and predictable USF support through implementation of a reasonable MFII program and the transition away from legacy support mechanisms over the next several years,” Berry said.
Supreme Court pick Neil Gorsuch appears highly skeptical about broad deference justices have given expert agencies, and he has cited the FCC as a prime example. Gorsuch, the 10th U.S. Circuit Court of Appeals judge whom President Donald Trump tapped to fill the seat of the late Justice Antonin Scalia, is seen by FCC watchers as a likely vote to rein in the deference the high court has given agencies under its 1984 Chevron precedent, including in the 2005 Brand X broadband ruling.