The FCC rejected a TracFone counsel's appeal to view Lifeline enforcement records under the Freedom of Information Act (FOIA). The agency denied an application for review filed by Mitchell Brecher of Greenberg Traurig seeking to reverse a 2014 Wireline Bureau decision. The bureau had denied his FOIA request that sought information relating to FCC notices of apparent liability (NALs) against his firm's client TracFone and 11 other companies for apparently violating Lifeline USF rules by obtaining subsidy support for more than one subscriber from the same household. Brecher narrowed and clarified his request to three categories of records, but the bureau said the documents were exempt from FOIA disclosure. The full commission agreed in an order Tuesday, with Commissioner Mike O'Rielly partially dissenting. He said he agreed the records were exempt from FOIA release but dissented from the application of Exemption 5 to communications between the FCC and the Universal Service Administrative Co. He said USAC was neither part of the FCC nor a separate federal agency, but an independent, private nonprofit corporation. "FCC-USAC communications are clearly neither intra-agency nor inter-agency communications protected by the deliberative process privilege, and should not be treated as such," he said in a statement attached to the order. Brecher didn't comment.
FCC Chairman Tom Wheeler offered a bevy of defenses and explanations to Capitol Hill on his Lifeline program overhaul and broadband privacy regulation NPRM, both set for votes Thursday at the FCC’s meeting. The agency released Wheeler’s responses to multiple lawmakers Wednesday on the items, as governors slammed the Lifeline overhaul plan and Charter Communications defended it.
The FCC revamped rate-of-return USF support mechanisms for the broadband era, in a 249-page order and Further NPRM released late Wednesday, with Commissioner Ajit Pai partially dissenting and partially concurring. The order gives rate-of-return telcos the option of receiving rural high-cost USF subsidies based on a broadband cost model over 10 years, which will be supplemented by $150 million in additional annual funding from existing USF reserves. For carriers not opting in to the model-based approach, the order updates a legacy mechanism -- renamed Connect America Fund Broadband Loop Support (CAF-BLS) -- to fund stand-alone broadband service to customers, which was a major driver of the reform effort. The changes include measures and incentives to spark greater broadband deployment, the order said.
FCC Commissioner Ajit Pai proposed a $1.75 billion Lifeline annual subsidy cap as the commission heads toward a scheduled vote Thursday on extending the USF low-income support program to broadband service and streamlining administration. He also proposed Tuesday to reduce payments to Lifeline providers if program support exceeds the budget, eliminate "enhanced" Lifeline tribal subsidies in more densely populated areas, and strengthen Lifeline minimum broadband service standards. A draft order would set a budget of $2.25 billion, indexed for inflation, that could be adjusted if spending reaches 90 percent of that amount (see 1603080024).
The FCC appears likely to modify Lifeline mobile voice proposals that have raised concerns, but the specifics remain unclear, some public interest and industry officials told us Monday. Cheryl Leanza, United Church of Christ policy adviser, said she believes there will be some "moderating" changes. "I would be surprised if they didn't alter the proposal in some way. It's hard to say exactly how," she said, but "I wouldn't say it's going to change radically." Public Knowledge counsel Phillip Berenbroick said he "wouldn't be shocked" to see the FCC show some flexibility on proposed minimum service standards and their implementation timeline.
The FCC should carve out Alaskan wireless carriers from a proposed 3G minimum broadband standard for mobile services in the upcoming Lifeline order (see 1603240052), Alaskan carrier General Communication Inc. said in an ex parte filing posted Friday in docket 10-90. GCI met Tuesday with Stephanie Weiner, aide to FCC Chairman Tom Wheeler. “By our best estimate, Remote Alaska contains at least 100 communities with a combined population of more than 40,000 that have access only to a 2G network,” GCI said. “A few years ago, many of those consumers had no wireless service at all. As Alaska wireless providers continue to build out and upgrade service in rural Alaska, the Commission should not make it more difficult for such communities to afford the best service available.” GCI said the simplest option is to exclude all facilities-based Alaska wireless carriers from the 3G minimum requirement. Or, it could apply the minimum standard only where commercial 3G service is offered, it said. “As a last resort,” the FCC could request waivers from carriers that offer 2G service in certain areas, said the cable and telecom provider. “That solution, however, would create uncertainty, cause delay, and unnecessarily tie up Commission and carrier resources.” GCI, a backer of the so-called Alaska Plan for a looming FCC rate-of-return USF overhaul (see 1602250025), also lobbied on that broadband deployment proposal.
Enacting the Rural Health Care Connectivity Act (S-1916) “would increase direct spending and revenues by $197 million and $215 million, respectively, resulting in a net reduction in the deficit of $18 million over that period" of 2017-2026, the Congressional Budget Office estimated in a report released Friday. The Senate Commerce Committee approved the bill in November. The legislation would enable some skilled nursing facilities (SNF) to attain eligibility for USF Rural Health Care (RHC) program grants. “CBO estimates that an average of 1,650 public and nonprofit SNFs in rural areas would be eligible for grants during that period and that participation rates and grant awards would be similar to those for existing RHC programs,” the report said. “Based on information from the FCC, CBO estimates that participation rates would reach 75 percent over a period of several years and that certain non-rural entities affiliated with those participants also would receive funding. Grant awards would vary in size depending on the recipient’s location and choice of benefits.” CBO said the bill would up the cost of an existing mandate for telecom companies. “CBO expects that telecommunications companies would generally pass most of the cost of the fee increase on to consumers,” it said.
Some wireless parties are increasingly hopeful the FCC will relax Lifeline proposals to impose minimum broadband and voice service standards and phase out support for stand-alone mobile voice by late 2019. "We're getting a strong vibe that they're likely to change," said Davis Wright attorney Danielle Frappier, who represents True Wireless and TerraCom. She said the concerns of wireless interests, public interest advocates and others appear to be registering with agency officials. "To their credit, they've taken those filings seriously and are rethinking it. I think they're doing the right thing," she told us Thursday.
The FCC should reform Lifeline USF, which is overly complex, said CenturyLink in a filing Tuesday in docket 11-42 on meetings with aides to Chairman Tom Wheeler and Commissioner Mignon Clyburn. The complexity has caused consumer confusion and frustration with the "bureaucratic nature of the program," while saddling providers with administrative burdens and regulatory costs that discourage participation, the telco said. If Lifeline support is extended to broadband, program administration should be streamlined for all providers and not just new entrants, "especially by promptly shifting eligibility verification to a third party and by not requiring offering of all Lifeline broadband options in all areas," it said. "The company also cautioned against making participation mandatory for any providers or applying a rigid 10/1 Mbps minimum service level for wireline Lifeline broadband service, as it would limit options for consumers who may prefer less expensive options or who live in rural areas where only lower download and/or upload speeds are currently available."
Gigi Sohn, counselor to FCC Chairman Tom Wheeler, attempted to address concerns that have been expressed about the commission's Lifeline USF proposals to extend low-income support to broadband service and streamline program administration. Mobile voice would continue to be a Lifeline-supported service, but under a draft order it would have to be bundled with broadband after Dec. 1, 2019, she said Wednesday at New America's Open Technology Institute. "To give Lifeline providers time to adjust, we will phase down support for stand-alone mobile voice over a multi-year period. We plan to eliminate the subsidy for stand-alone mobile voice starting on December 1, 2019, although the Commission will examine the market in mid-2019 to determine whether there needs to be an adjustment," she said in prepared remarks. "We believe that three years will be enough time for the market to adapt and for promising technologies to develop, and that by the end of 2019, there will be affordable bundled mobile voice and data plans that meet, and hopefully exceed, Lifeline’s minimum service standards." But if the FCC is wrong, she said, it "has a safety valve by which it can examine how the market has evolved between now and 2019, and preserve a subsidy for stand-alone mobile voice if it’s deemed necessary." Minimum service standards for voice and data are needed to ensure Lifeline users aren't stuck with "second-class service," while ensuring service is still affordable, she said. Sohn also said state commissions will continue to play a "critical role" in Lifeline, despite an optional new path for broadband providers to be certified to receive support nationally. Providers would still be able to go to the states for Lifeline approval state by state. California approval will be necessary to receive a sizable state Lifeline subsidy there, she said. The FCC proposed a Lifeline budget of $2.25 billion, indexed to inflation, which is enough to allow some growth. While the agency expects some growth due to the broadband coverage, "we don't expect it to be precipitous," she said. Sohn said if Lifeline spending reaches 90 percent of the budget, the Wireline Bureau must notify the commission and prepare an analysis of the causes of the spending growth, "followed by Commission action within six months." That creates another "safety valve," Sohn said. Monday, other senior FCC officials used the agency's blog to defend the proposal amid criticism from some carriers and others (see 1603220044).