Pai FCC Loses in Court -- Judges Overturn Gutting of Tribal Lifeline Program

The US Court of Appeals for the DC Circuit overturned the Federal Communications Commission's attempt to take broadband subsidies away from tribal residents. The Ajit Pai-led FCC voted 3-2 in Nov 2017 to make it much harder for tribal residents to obtain a $25-per-month Lifeline subsidy that reduces the cost of Internet or phone service. The change didn't take effect because in Aug 2018, the court stayed the FCC decision pending appeal. The court followed that up on Feb 1 with a ruling that reversed the FCC decision and remanded the matter back to the commission for a new rule-making proceeding. 

The Pai FCC's 2017 decision would have limited the $25 subsidy to "facilities-based" carriers—those that build their own networks—making it impossible for tribal residents to use the $25 subsidy to buy telecommunication service from resellers. The move would have dramatically limited tribal residents' options for purchasing subsidized service, but the FCC claimed it was necessary in order to encourage carriers to build their own networks. The same FCC decision also would have eliminated the $25 subsidy in urban areas, reserving it only for tribal lands in rural areas. The court's decision Feb 1, in response to an appeal filed by tribal organizations and small wireless carriers, overturned both of these limitations. A three-judge panel said the FCC failed to consider that facilities-based providers have been leaving the Lifeline program and provided no evidence that banning resellers would spur new broadband deployment. The FCC also failed to properly consider how eliminating the subsidy in urban areas would affect consumers, judges determined. In addition, the FCC "failed to provide an adequate opportunity for comment on the proposed limitations," judges wrote. The FCC could appeal the ruling.