CETCs Push Back Against USF Interim Cap Order
The FCC’s order reducing high-cost Universal Service Fund support to competitive eligible telecommunications carriers violated the Administrative Procedure Act (APA) and the telcos’ Fifth Amendment protection against illegal takings, 13 of the CETCs said in a petition released Friday. In language that suggests the carriers are considering seeking an injunction, the telcos said they “are each adversely affected” by the Wireline Bureau’s “decision to retroactively modify the cap level.” The petition’s signers were AST Telecom, Bluegrass Cellular, Cellular South Licenses, Union Telephone, Corr Wireless, East Kentucky Networks, Illinois Valley Cellular, Cellular One, Commnet Wireless, MTPCS, PR Wireless, Georgia RSA #8 Partnership and Allied Wireless.
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The FCC on Tuesday ordered the Universal Service Administrative Co. to adjust the interim cap on universal service payouts to the competitive telcos. The 13 telcos said the action imposed “substantial funding reductions both going forward and retroactively.” The petition said: “The requirement imposed by the Bureau not only modifies a rulemaking decision made by the commission, but also would impose undue hardship on the Petitioners by recovering support that has already been invested in accordance with rules applicable to such support and in reasonable reliance on the Commission’s prior rulemaking. By undermining these investment decisions, the Bureau’s action causes the precise harm the Commission previously recognized and sought to avoid in the Interim Cap Order."
Any cap reduction should have been done through a rulemaking, the telcos said. Without that, the FCC’s instruction by letter is “an unenforceable nullity,” the telcos said. “The Bureau’s decision to retroactively modify the interim cap level without notice, comment, or justification, represents promulgation of a substantive rule in a manner that violates the requirements of the APA,” the companies said. “In addition, the requirement in the Feb. 8 Letter that the petitioners must repay to USAC high-cost support previously disbursed to the petitioners is an overly burdensome regulatory obligation that violates the takings clause of the Fifth Amendment to the U.S. Constitution.”
FCC officials did not respond to a request for comment. But small wireless carriers are feeling squeezed by the FCC’s proposed revamp of the Universal Service Fund. Verizon officials have said, for instance, that fears of lost support are behind fraud allegations against Verizon in Nevada and Wisconsin by small wireless companies (CD Feb. 22 p8). National Broadband Plan architect Blair Levin has in recent weeks called rural carriers an obstacle to effective broadband deployment because they insist on a right to the same speeds as those in more populous places.
But the FCC didn’t study rural carriers’ needs carefully before starting its USF overhaul, said General Counsel Carri Bennet of the Rural Telecommunications Group. “I think even they would admit that they wish they had more time to understand the rural perspective,” Bennet told us. “I've heard even some of the Wireless Bureau folks saying they wish they'd had more time.”