TR Daily FCC to Act by Year-End on High-Cost Support Predictability
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Thursday, August 16, 2018

FCC to Act by Year-End on High-Cost Support Predictability

FCC Chairman Ajit Pai pledged today during a Senate hearing to complete work by the end of this year on an effort launched in March to make universal service high-cost funding both predictable and sufficient.

Senators from both sides of the aisle repeatedly questioned the Commissioners during the Commerce, Science, and Transportation Committee’s FCC oversight hearing about the map the agency is using to determine which areas of the country do not have 4G LTE wireless service and thus are eligible for support in the Mobility Fund Phase II (MF-II) auction. They criticized the map for not reflecting what they said are the realities on the ground in their states, where the ability to send a text depends on which side of the house one is in or “where the sun is in the sky,” Sen. Jon Tester (D., Mont.) said.

Some senators also criticized the FCC for not doing more itself to verify whether the areas that incumbent wireless providers say they serve with 4G LTE is, in fact, served.

At times, the hearing veered from policy seas onto procedural and political shoals, such as whether Commissioners share the president’s belief that the press is the “enemy of the people,” whether Chairman Pai was open with lawmakers about the cause of a May 2017 slowdown in the agency’s electronic comment filing system, and whether the White House had contacted the FCC about the now abandoned merger proposal of Sinclair Broadcast Group, Inc., and Tribune Media Co.

In his opening statement, Committee Chairman John Thune (R., S.D.) said that the FCC “needs to act this year to address funding for high-cost support.” He also spoke of the need to make more mid-band spectrum available for 5G wireless services.

“The bipartisan STREAMLINE Act that I introduced in June with Senator [Brian] Schatz [D., Hawaii] is meant to stimulate this discussion. Striking the right balance between accelerating broadband deployment and preserving local authority will be an ongoing focus of this committee,” Chairman Thune said. “I look forward to hearing about the Commission’s complementary efforts to accelerate deployment, and how uniform national processes can help bring the benefits of 5G to all areas and not just those where the cost equation makes deployment easier.”

Chairman Thune added, “The FCC must also continue its efforts to protect consumers from fraudulent and unwanted robocalls, which remain among the top consumer complaints. … Consumers must have meaningful rights to control who can call them using automated calling technology. We must also ensure that those trying in good faith to comply with the law in reaching their patients and customers have a reasonable means of doing so without facing potentially devastating litigation. And we must make sure the Commission and law enforcement have the tools and incentives they need to go after the scammers and thieves bombarding us with illegal and unwanted calls.”

Chairman Thune praised Chairman Pai for undertaking procedural reforms such as publicly releasing drafts of items intended for votes at the agency’s meeting at roughly the same time the draft items are circulated among the Commissioners’ offices.

Chairman Thune noted the recent report from the FCC Office of Inspector General finding that the FCC made a number of false statements in a May 2017 press release and in responses to congressional requests for additional information about delays experienced by users of the FCC’s electronic comment filing system (ECFS) on May 7 and 8, 2017 (TR Daily, Aug. 7).

“As you know, it is absolutely critical that the information provided to Congress and to the American people be correct. I look forward to hearing how the Commission will prevent this in the future,” Chairman Thune said.

In his opening statement, full committee ranking minority member Bill Nelson (D., Fla.) said that the FCC “the FCC majority certainly has been busy over the last year and a half” with “abdicating” its “statutory authority to protect consumers on the Internet,” “paving the way for unprecedented broadcast consolidation,” “proposing to eliminate rules that make quality educational content for kids readily-available on free, over-the-air television,” and “gutting a program designed to help low-income Americans afford phone and internet services.”

“The bottom line here is this FCC has been busy removing consumer protections in almost every industry segment you regulate. What we haven’t seen is progress in actually closing the digital divide,” Sen. Nelson said.

“It’s going to take more than lip-service to solve this problem. And it definitely will not be solved by repealing essential protections to preserve the free and open Internet,” he added. He also suggested that the Senate passage earlier this year of a Congressional Review Act resolution that would roll back the restoring Internet freedom (RIF) action taken by the FCC’s Republican majority in December “should give the FCC pause. It should spur regulatory humility in all actions taken by the agency.”

The House has not yet taken up the CRA resolution, and with Republican leadership opposed to it, and only Republican supporting the discharge petition so far, its chances for passage in the House do not look good. During the question period, Chairman Thune asked Chairman Pai if he was “willing to commit to coming to a decision that will provide certainty to rural providers [regarding high-cost support] by the end of the year.”

“Yes, I am,” Chairman Pai said.

Communications, technology, innovation, and the Internet subcommittee Chairman Roger Wicker (R., Miss.) expressed doubt about the MF-II eligibility map.

“I don’t know if we’re going to get an accurate map even with the challenge” process, he said. “I do believe there is concern across the spectrum that we’re going to end up with a map that doesn’t fairly distribute” the MF-II funding. “I’m still skeptical,” he added.

Sen. Jerry Moran (R., Kan.) said that he thinks the MF-II “initial eligibility map dramatically overstates coverage.”

Chairman Pai responded, “We inherited from the prior FCC a mess,” because the agency had allowed carriers to report on their coverage as determined using “their own preferred measurement parameters.”

“That wasn’t good enough to me,” he said, so the Commission initiated a “bespoke,” or custom-ordered, information collection.

Sen. Moran noted that the FCC is relying on third parties to correct the errors in the map through the challenge process. “It’s nothing the FCC will do itself,” he said.

“We don’t have the staff — thousands of people — [that] it would take to do that ourselves,” Chairman Pai said.

Commissioner Jessica Rosenworcel, the agency’s lone Democrat, said, “I don’t want to disagree with anything the Chairman said,” adding that “extending the [challenge] window was the right thing to do.”

Chairman Pai announced earlier this month that he had circulated for a vote an item that would extend the challenge window by 90 days, or until late November, from prior closing date of Aug. 27 (TR Daily, Aug. 3). The item has not been released yet, despite references during the hearing such as Commissioner Rosenworcel’s that suggested it may have already been adopted.

Commissioner Rosenworcel suggested that some of the FCC’s field offices, which typically focus on interference issues and illegal broadcasting, could work on testing MF-II map coverage claims. The FCC could also direct the Universal Service Administrative Co. to “do spot checks,” she added.

Sen. Moran thanked her for those suggestions, and emphasized that if there is any way he can help to improve the map, he will.

“It doesn’t seem like it’s the responsibility of the Kansas Farm Bureau to correct the map,” he added, referring to one of the entities to whom the FCC has granted a waiver to participate in the MF-II challenge process, along with smaller providers that hope to obtain support to serve areas in which they believe large carriers have falsely claimed to provide 4G LTE service.

Sen. Tammy Baldwin (D., Wis.) noted that “federal agencies operate in every corner of our state every day, such as the U.S. Postal Service and the U.S. Forest Service,” wondering why the FCC couldn’t leverage that presence in testing carriers’ coverage claims.

Commissioner Rosenworcel agreed. “Our effort to map broadband should not begin and end in Washington,” she said, adding that “we need to figure out ways to crowd-source this.”

Noting that Postal Service trucks drive rural roads on a daily basis, Commissioner Rosenworcel said, “Why can’t we outfit them with the kind of spectrum equipment that would let us know where broadband is and isn’t?”

“Why can’t we?” Sen. Baldwin responded.

“I would be glad to work with you on this,” Commissioner Rosenworcel said.

In her opening statement, which generally criticized the agency’s Republican majority for acting “at the behest of the corporate forces that surround it,” Commissioner Rosenworcel noted that the National Telecommunications and Information Administration last month “expressed concern about how our rush to reform [and streamline copper retirement procedures] could harm national security and public safety services.”

Sen. Wicker offered Chairman Pai the opportunity to respond to that point.

Chairman Pai said that it was unfair to “pluck” one sentence out of the letter, which he said was overall supportive of the FCC’s approach, and added that money spent on maintaining copper can’t be used to close the digital divide.

Sen. Schatz questioned Chairman Pai about the OIG report on last year’s ECFS problems, and why the Chairman had not “entertained doubts” about then-FCC Chief Information Officer David Bray’s assertions that the problems were caused by DDoS (distributed denial of service) attacks, when it appeared likely that they might have been caused by a large number of parties filing comments in the wake of an episode of “Last Week Tonight” in which comedian John Oliver urged viewers to file in support of net neutrality.

Chairman Pai said that he initially assumed the John Oliver piece was the cause, but that he was repeatedly assured by the CIO and other staff that the cause was DDoS attacks. When he eventually became aware during the course of the OIG investigation that there was no evidence of DDoS attacks, the OIG asked him not to reveal that, because it had referred the incident to the Justice Department for possible criminal action, he said.

“It was a difficult position to be in,” Chairman Pai said, because he knew there would be accusations that he had hidden the truth if he complied with the OIG request.

“I guess what I’m looking for is some measure of accountability,” Sen. Schatz said. “I can’t imagine there was no other way to thread this needle.”

Sen. Maggie Hassan (D., N.H.) asked whether the Commissioners agreed with President Trump’s repeated references to the press as the “enemy of the people” and whether those statements are harmful to free speech.

While the Republican Commissioners were willing to say that they did not believe the press is the enemy of the people, they were unwilling to characterize the president’s rhetoric as harmful. Commissioner Mike O’Rielly suggested that the First Amendment and the press are strong enough to withstand the president’s comments, and Commissioner Brendan Carr said that the First Amendment allows for “sometimes rough discourse.”

In response to a question from Sen. Amy Klobuchar (D., Minn.), Chairman Pai said he believes the FCC will be able to meet the requirement in the Rural Call Completion Act to put service quality standards for intermediate providers in place by Feb. 26, 2019. He also told her that he has “every expectation that staff will be able to present an item that comports with [the March 23, 2019] deadline” for rulemaking action set by the Rural Spectrum Accessibility Act, which was passed as part of the MOBILE NOW Act (TR Daily, March 23).

Sen. Richard Blumenthal (D., Conn.) asked for support for the Repeated Objectionable Bothering Of Consumers On Phones (ROBOCOP) Act he has proposed with Sen. Ed Markey (D., Mass.). Commissioner Rosenworcel said she supported it, while the other Commissioners pledged to look at it and get back to him within the week.

Sen. Blumenthal also asked about White House contacts with the FCC regarding the Sinclair-Tribune merger. Chairman Pai said that “no one has called from the White House to express a view” on the matter, but that White House Counsel Don McGahn had called him to request a status update.

Sen. Blumenthal asked for a written summary of the conversation. —Lynn Stanton, [email protected]

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