A Congressional Review Act resolution aimed at reversing the FCC order to rescind 2015 net neutrality rules (Senate Joint Resolution-52) appears likely to happen next week, days after expected Wednesday filing of a petition to discharge the measure from Senate Commerce Committee jurisdiction (see 1804260030 and 1804300033), lawmakers and lobbyists told us. Republican lawmakers said they are wary of the possibility the resolution could pass in the Senate by a narrow margin if Sen. John McCain, R-Ariz., isn't able to return this month because of brain cancer treatment. Senate Democrats downplayed such a scenario, emphasizing they are optimistic the CRA measure could still garner additional GOP supporters. Fifty senators publicly support the resolution, including all 49 members of the Senate Democratic Caucus and Sen. Susan Collins, R-Maine.
WILLIAMSBURG, Va. -- FCC Commissioner Mike O'Rielly said the U.S. is in a 5G race against rivals, some of which have government-run "industrial policy." The U.S. faces challenges from other nations "racing ahead" to try to take the lead in deploying next-generation networks and services that "will decide" wireless communications for the next 20-25 years, he said, responding to a question Saturday at the FCBA retreat where he appeared with Commissioner Brendan Carr.
Representatives of Alaska’s General Communication Inc. asked the FCC to expedite the flow of funding coming through the USF Rural Healthcare Program. “We urged rapid completion of the Funding Year 2017 commitments process, as we are already ten months through that year,” GCI said in a filing in docket 02-60. “The delay in completing the commitments and disbursement process is threatening to disrupt GCI’s ability to undertake key network improvements to improve wireless and wireline broadband in Alaska during the coming construction season.” GCI said representatives met with staff from the Consumer and Governmental Affairs Bureau and the Office of Native Affairs and Policy.
Commissioner Mike O'Rielly supported an FCC item giving additional USF support to Puerto Rico after receiving assurances from the territory it would end 911 fee diversion, O'Rielly aide Brooke Ericson told us Friday. O'Rielly's backing means a majority supports Chairman Ajit Pai's March draft order and NPRM seeking to provide $256 million in additional USF support and repurpose another $698 million to help restore and upgrade storm-damaged communications networks, with $750 million for Puerto Rico and $204 million for the U.S. Virgin Islands (see 1805030026). O’Rielly last month threatened to withhold additional USF funding for hurricane recovery if the territory kept using the 911 money for unrelated purposes (see 1804240069). Puerto Rico won’t allow any more 911 fee diversion, Gov. Ricardo Rosselló Nevares (New Progressive Party) said in a Wednesday letter to FCC Commissioner Mike O’Rielly. Puerto Rico, which prepared but failed to send information on time to the FCC about 2016 diversion due to “clerical error,” diverted $243,100 of the 911 revenue, Rosselló said March 7. Wednesday, he said diversion is the fault of Puerto Rico’s previous administration. “To be clear, we will not allow any utilization of 9-1-1 funds for purposes other than those authorized under applicable laws, rules, and regulations. To that effect, we have also initiated steps to submit amendments to the current state law that led to said diversion of funds, and we will be withholding future payments to the Treasury Department.”
The USF contribution factor could drop in Q3 from 18.4 percent to 17.3 percent of carriers' U.S. interstate and international (long-distance) telecom end user revenue, if revenue holds steady and there aren't demand adjustments, said industry consultant Billy Jack Gregg's quarterly email update Thursday. He based his estimate on the Universal Service Administrative Co.'s projection that Q3 USF demand would be $1.86 billion, $103.3 million less than in Q2, and $31.4 million less than in Q3 2017. If the industry revenue base stays constant, that will produce a contribution factor of 17.3 percent, he said, but that base has been trending down and a new decline would produce a higher factor. Projected revenue in Q2 was $12.81 billion, the lowest ever, and USAC's Q3 projected revenue is due out by month's end, he said. In addition, if projected Q3 high-cost fund demand is subsequently adjusted upward by $125 million to comply with an FCC budgeting mandate in a March rural telco support order, the USF contribution factor will be 1.1 percent higher than currently projected, he said.
House Commerce Committee ranking member Frank Pallone, D-N.J., and Rep. Peter Welch, D-Vt., criticized Thursday the FCC's move this week to advance the federal USF fund shift to the U.S. Treasury. Changes to the program's contribution and distribution processes happened Tuesday, drawing criticism from FCC Commissioner Jessica Rosenworcel (see 1804300063). Pallone and Welch sought a GAO review in January of the effects of the FCC's plan (see 1801100059). “We were dismayed to learn from press reports that Chairman Pai unilaterally pressed forward with this plan that will cost recipients tens of millions of dollars a year without the benefit of GAO’s further analysis, without telling his fellow Commissioners, without input from the millions of Americans who depend on these funds, and without notifying Congress,” the lawmakers said in a statement. “Unfortunately, this action is just the latest evidence of Chairman Pai’s casual disregard for the public’s input and determined avoidance of Congressional oversight.”
Senate Homeland Security Committee ranking member Claire McCaskill, D-Mo., is again pressing the FCC for answers about “waste, fraud and abuse” in the Lifeline USF program in the wake of recent findings from the agency's Office of Inspector General. Rep. Nydia Velázquez, D-N.Y., and 47 other Democrats, meanwhile, wrote FCC Chairman Ajit Pai, as expected (see 1805020061), urging him not to cut the Lifeline budget as part of his revamp plan. Democrats repeatedly criticized Pai's Lifeline revamp plan (see 1801230075, 1803210061, 1803300045 and 1804260068).
FCC Chairman Ajit Pai could be close to gaining majority support for his proposals to provide additional USF support to Puerto Rico and the U.S. Virgin Islands, in response to last year's hurricanes. Commissioner Brendan Carr said this week he voted for an order, and Commissioner Mike O'Rielly's office told us Thursday he's optimistic his concerns will be resolved and he will soon be able to vote on the item. Pai circulated a draft order and NPRM in March seeking to provide $256 million in additional USF support and repurpose another $698 million to help restore and upgrade storm-damaged communications networks, with $750 million for Puerto Rico and $204 million for the U.S. Virgin Islands (see 1803060039 and 1803160051).
DOD said Wednesday it’s barring stores on U.S. military bases from selling phones made by Chinese companies Huawei and ZTE, citing ongoing national security concerns about Chinese telecom equipment manufacturers. The White House and National Security Council meanwhile didn’t comment on a report that President Donald Trump’s administration is considering an executive order that would further restrict some Chinese telecom equipment manufacturers’ ability to sell their products in the U.S. Huawei and ZTE devices “may pose an unacceptable risk to [the department's] personnel, information and mission," a Pentagon spokesman said in an email. "In light of this information, it was not prudent for the Department's exchanges to continue selling them to DoD personnel.” Defense can’t dictate that troops won't buy Huawei or ZTE phones from other stores but they “should be mindful of the security risks posed by the use” of the devices, the spokesman said. The House Intelligence Committee warned beginning in 2012 about the companies’ ties to the Chinese government. The committee’s 2012 report recommended the U.S. “view with suspicion” attempts by the companies to continue making inroads into the U.S. market (see 1210100053 or 1210100091). The White House's pending executive order could bar companies doing business with the federal government from using network or telecom equipment made by companies the U.S. deems a national security risk, The Wall Street Journal reported. "While we have no comment on individual actions, protecting critical infrastructure, including the supply chains associated with such infrastructure, is a critical part of protecting America’s national security and public safety," a White House spokeswoman emailed. Communications industry lawyers previously told us they anticipated executive actions from the White House on national security issues involving Chinese telecom equipment manufacturers and to address pressure for modifications of the "Team Telecom" reviews of foreign takeovers of U.S. communications assets (see 1804250045). The FCC approved 5-0 last month an NPRM that proposes to bar use of money in any USF program to buy equipment or services from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain (see 1804170038). FCC Chairman Ajit Pai initiated the NPRM amid pressure from Hill lawmakers about reports Huawei was set to begin selling its consumer products in the U.S. as soon as this year “with little or no modifications" to address privacy and cybersecurity concerns (see 1803230063). Huawei meets “the highest standards of security, privacy and engineering in every country,” including the U.S., the company said in a statement. “We remain committed to openness and transparency in everything we do and want to be clear that no government has ever asked us to compromise the security or integrity of any of our networks or devices.” ZTE didn’t comment.
General Communication Inc. urged "rapid completion" of rural healthcare USF commitments for funding year 2017 (ending June 30), and sought FCC relief from a $400 million program annual budget cap. "The delay in completing the commitments and disbursement process is threatening to disrupt GCI’s ability to undertake key network improvements to improve wireless and wireline broadband in Alaska during the coming construction season," said company filings (here and here) posted this week in docket 02-60 on meetings with Chairman Ajit Pai, Commissioners Brendan Carr, Michael O'Rielly and Jessica Rosenworcel, and their aides. Budget relief is needed for FY 2017 and "likely" for FY 2018, "given the large, continued increases in overall demand and the delayed announcement of the pro-rata reductions," GCI said (see 1803160040). "Finding additional funds to meet current demand in the short term, pending longer-term reforms in the rulemaking proceeding, will prevent disruption that would result from health care providers having to find additional funds in their health care budgets or being unable to pay their unexpectedly high costs of service due to the proration." Longer term, GCI stressed the need to prioritize support as the current pro-rata reductions "hit the highest cost to serve areas the hardest."