Chairman Tom Wheeler said the FCC would offer its own rate-of-return USF overhaul plan absent rural LEC industry consensus, expects to move an Internet video program-rights order and a broadband privacy NPRM this fall, and would hold the broadcast incentive auction in Q1. Offering a broadband overview at the Brookings Institution Friday, Wheeler said the FCC would continue to protect and promote competition but wouldn't require "network unbundling." He also said many telco and cable providers continue to invest despite the threats of "a few big dogs" to "starve investment" due to the recent broadband reclassification. Wheeler's speech largely tracked prepared remarks.
Many Americans, especially African-Americans and Hispanics, are still struggling to find jobs, but broadband offers some hope, said Ralph Everett, senior fellow at Georgetown University’s Center for Business and Public Policy, in a white paper. Everett said the USF Lifeline program can help. “The FCC’s Lifeline program, if updated to cover broadband, can help ensure that young students and other lower income Americans can fully participate in the 21st century economy,” he said. But changes are needed. Lifeline “needs to be revised so that consumers are empowered to decide for themselves what communications services best meet their needs, and are provided the financial assistance to take advantage of this right to choose,” he wrote. “In addition, and this is critical to success, the program must be reformed to wring out waste, fraud, and abuse in order to maximize the dollars available to those who qualify for assistance.”
The FCC Wireline Bureau published a list of census blocks deemed "extremely high-cost" for USF support purposes in areas served by price-cap telcos, in a public notice Tuesday. The census blocks are generally not eligible for Connect America Fund Phase II model-based support, the notice said, but price-cap telcos accepting such support in a state can substitute the identified locations in lieu of those in other census blocks to meet their broadband deployment duties in a state, provided that the total number of locations served is larger than or equal to the number of locations in eligible census blocks that must be served under the duties. The list includes 151,505 extremely high-cost census blocks with varying numbers of locations. (There are more than 11 million census blocks in the U.S., said a Census Bureau Web page). Extremely high-cost census blocks that aren't targeted for CAF Phase II broadband deployment will be included in the Phase II reverse auction the FCC expects to hold some time after carriers decide whether to accept support, the notice said. Those decisions are due Aug. 27, but Frontier already has announced it will accept all $283.4 million in annual support it was offered by the FCC (see 1506160039).
The FCC released the Further NPRM and order Monday aimed at moving Lifeline USF (see 1506180029) toward supporting broadband, improving oversight and combating abuses. The 143-page text spells out the FCC's proposals and the actions it's taking "to rebuild the current framework of the Lifeline program and continue our efforts to modernize the Lifeline program so that all consumers can utilize advanced networks." The FCC is taking steps "to promote accountability and transparency for both low-income consumers and the public at-large, and modernize the program," the text said. "Our efforts in this Second Further NPRM and Report and Order are consistent with the Commission’s ongoing commitment to monitor, re-examine, reform, and modernize all components of the Fund to increase accountability and efficiency, while supporting broadband deployment and adoption across the Nation."
The U.S. Court of Appeals for the D.C. Circuit ruled against AT&T Tuesday, reversing a lower court dismissal of a False Claims Act lawsuit alleging the carrier fraudulently overcharged schools and libraries that passed their costs along to the FCC E-Rate subsidy program (USA ex rel. Todd Heath v. AT&T, No. 14-7094). The three-judge panel remanded the case to the U.S. District Court in Washington, D.C., for further proceedings on the merits of the case.
In adopting a Lifeline USF order Thursday, the FCC backed off a staff proposal to increase the general record-retention requirements of Lifeline USF providers from three to 10 years, agency officials said the next day. But the commission in a 3-2 vote (see 1506180029) adopted new rules requiring providers to retain customer eligibility documentation. In a VoIP numbering order also adopted Thursday, the FCC didn't adopt Level 3 proposals to firm up CLEC access charge rights when VoIP providers gain direct access to phone numbers, agency officials said. The FCC staff and Level 3 proposals drew objections from the regional Bells in the days before the vote.
Hill Republicans lashed out at the FCC’s Thursday expansion of the Lifeline program. One prominent Senate critic introduced legislation, the second piece on Lifeline that he has dropped in two weeks. The Ending Mobile and Broadband Welfare Act would prevent the FCC from expanding Lifeline to cover broadband service and end Lifeline's wireless support.
A bitterly divided FCC voted 3-2 Thursday to approve a package of proposals and actions to move the Lifeline USF program toward broadband coverage and move to improve oversight and counter abuses. The FCC's Democratic majority said the NPRM and orders would reboot Lifeline for the 21st century by helping low-income consumers gain broadband access and by undertaking further administrative restructuring to ensure program efficiency and integrity. But the Republican minority said Democratic refusal to impose or even propose a Lifeline budgetary cap was fiscally irresponsible and invited further waste, fraud and abuse.
FCC items moving Lifeline USF toward broadband coverage and authorizing VoIP numbering direct access appear likely to be approved Thursday, despite some continuing controversies and even resistance, agency and telecom industry officials told us. The VoIP numbering item is a "slam dunk 5-0 [vote]," said an agency official, but questions remain about whether Lifeline will draw dissent. Signaling different points of emphasis, Commissioner Mignon Clyburn said Wednesday it was time to "reboot" the Lifeline program for this century, while Commissioner Ajit Pai said the FCC needed to focus on establishing a Lifeline budget and reining in abuses if it's going to authorize broadband support.
Judge Patricia Millett of the U.S. Court of Appeals for the D.C. Circuit said she and colleagues are reluctant to agree to en banc review of panel rulings, and judges generally are chosen randomly to hear cases. Answering questions at an FCBA seminar Monday night, Millett, who was nominated by President Barack Obama and joined the court in December 2013, offered a rare look into the inner workings at the D.C. Circuit, which regularly reviews challenges to FCC orders. Also appearing, two senior attorneys of the FCC Office of General Counsel reviewed major telecom and media cases from the past 12 months, with one attorney hailing the agency's victory in defending its 2011 USF and intercarrier compensation order as "stunning" and suggesting it offered some lessons.