DC Circuit Affirms FCC Maintenance of Some Unsubsidized ILEC Voice Service During USF Shift
A court upheld FCC orders requiring ILECs provide some unsubsidized voice service during a USF transition to broadband-oriented high-cost support, dealing a loss to telco interests. A panel of the U.S. Court of Appeals for the D.C. Circuit Friday cited deference to regulators in denying incumbent telco challenges that argued the FCC improperly granted them only partial forbearance from the voice duties before new USF mechanisms are in place (see 1607120073). The panel questioned AT&T's attorney more extensively than the government's at oral argument (see 1710260054).
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The "agency has retained some preexisting obligations of a subset of landline-only providers to ensure that underserved populations in a small number of hard-to-reach areas do not lose access to basic telecommunications services during the transition, before the modernized program is fully in effect -- July 24, 2018 in most areas," said the opinion of Judge Cornelia Pillard, joined by Judges Merrick Garland and Robert Wilkins, in AT&T v. FCC, No. 15-1038. A Connect America Fund Phase II auction of subsidies for fixed broadband and voice service in certain traditional ILEC areas is set to begin July 24, though new CAF-backed service will take longer.
"We owe deference to the FCC’s decision to hold a preexisting regime in place for an interim period, so as to avoid commandeering agency resources and to respect the agency’s judgments about how to maintain baseline universal service in the context of uncertainties attending a major regulatory transition," the D.C. Circuit panel said. "In response to Petitioners’ generalized allegations that vulnerable consumers do not need the disputed services and that the existing program leaves Petitioners with underfunded obligations, the FCC has made clear that it will grant case-by-case forbearance or supplemental funding in areas where providers can meet their burden to show that their services are not required or that they need additional financial help. Especially in the context of this systemic regulatory transition, no more is required."
The ruling "defers to an FCC decision to leave voice providers" in some areas "without clear universal service support" during the transition, emailed a USTelecom spokeswoman: "We are committed to working with the FCC to ensure Americans living in difficult to reach rural areas continue to have access to voice services and to bringing this temporary period of regulatory transition to a close as quickly as possible." AT&T referred us to the USTelecom statement.
CenturyLink is "disappointed that the D.C. Circuit chose to leave in place a system that is inherently unfair and eliminated support for voice service in the most rural areas of the country,” a representative emailed.