Universal Service Fund

Congressional action to update the Telecommunications Act will be incremental, according to House Commerce Committee Chairman Greg Walden (R-OR). "We're looking at it piece by piece," Walden said at the 2018 State of the Net conference on Jan 29. He added that Congress also "needs to look at the FCC operation" overall, acknowledging that "we live in a different era" than when the 1996 Telecom law was enacted. Walden said he expects a "program-by-program" evaluation, but did not suggest any timetable or urgency for the review.

As the Federal Communications Commission begins to explore potential changes to its regulations for rate-of-return carriers, we both wholeheartedly support action to curb impermissible expenditures.  The public trust is violated, if or when bad actors take extensive leeway in defining what is acceptable for reimbursement by the FCC and ratepayers.  Past stories highlight spending on personal mansions, fancy boats, lavish parties, and country club memberships, just to name a few.

The Federal Communications Commission proposed an $18,715,405 fine against DataConnex for apparent violations involving the Universal Service Fund Rural Health Care Program. The Florida- and Mississippi-based telecommunications services provider is charged with violating the Communications Act, the program’s competitive bidding rules, and using forged, false, misleading, and unsubstantiated documents to improperly seek funding from the Universal Service Fund (USF).

On Dec 1, 2017, Sen Claire McCaskill (D-MO) wrote to Federal Communications Commission Chairman Ajit Pai requesting information about the steps the FCC is taking to recover forfeiture penalties it proposed four years ago against Lifeline carriers that had profited from violating program rules. 

House Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) sent a letter to Universal Service Administrative Company CEO Radha Sekar requesting the audits conducted during the preceding three fiscal years for both the Federal Communications Commission’s Legacy High-Cost and Rural Health Care programs in order to better understand the potential for waste, fraud and abuse in the programs. The High-Cost Program is by far the largest Universal Service Program, spending $4.5 billion each year. Rep Pallone is requesting that the Universal Service Administrative Company provide:

More can be done to address the Homework Gap. Carriers across the country are pitching in by making available low-cost broadband service. Libraries everywhere from Maine to Missouri are loaning out wireless hotspots—and letting students borrow connectivity for schoolwork. Rural school districts are putting Wi-Fi on buses and turning ride time into connected time for homework. Communities are mapping out where free online access is available for student use. These efforts deserve applause. More importantly, they deserve expansion.

The Federal Communications Commission released an 8-page document outlining "A Year of Action and Accomplishment" led by FCC Chairman Ajit Pai, broken down into the following categories: bridging the digital divide, promoting innovation and investment, protecting consumers and enhancing public safety, transparency and process reforms, and cutting and modernizing outdated regulations. 

Some Democratic members of the House Commerce Committee have asked the Government Accountability Office to "review" the Federal Communications Commission's efforts to deploy the Lifeline National Verifier, which is meant to be a more efficient way to monitor who gets the Lifeline Universal Service Fund subsidies and make sure they are eligible for the money.

The Federal Communications Commission has extended the deadline for public comments in its Lifeline proceeding. Comments now due January 17, 2018; reply comments due February 21, 2018.

Since Chairman Ajit Pai took over the leadership of the Federal Communications Commission, he has emphasized that one of his main goals has been to “close the digital divide and bring the benefits of the Internet age to all Americans.” So it comes as no surprise that the FCC has taken several measures recently to overhaul the Lifeline program under the tagline “Bridging the Digital Divide for Low-Income Consumers.” The November changes to the Lifeline Program were mainly cutbacks; reducing available subsidies, as well as limiting eligible participants and carriers.