The Federal Communications Commission has taken no official position on whether California’s $0 co-pay policy for mobile carriers applying for its California LifeLine low-income subsidy is statutorily impermissible rate regulation, but its amicus brief in a challenge to that law in a federal appeals court does everything but that. 

Commercial broadband operators, fixed and mobile, are constantly on guard for what they see as government rate regulation by proxy and the FCC’s brief did nothing to allay those concerns.

One section of the Communications Act says states can adopt regulations “not inconsistent with the FCC’s rules” to advance the government's interest in universal service. Another says states can’t regulate the rates charged for mobile services although they can regulate “terms and conditions” and take steps to ensure “universal service at affordable rates.”

The issue before the 9th U.S. Circuit Court of Appeals is whether the $0 co-pay is allowed by the first section or pre-empted by the second, the FCC points out.

The FCC first throws up its hands, saying: “(The FCC) has never addressed whether states may advance universal service by requiring wireless providers to offer minimum service standard plans with a $0 copayment as a condition of receiving state subsidies through a voluntary program like California LifeLine. For that reason, the FCC writes in support of neither party.”

The FCC then puts both thumbs on the scale for a reading that supports the $0 pay policy. That’s no big surprise, since the Biden administration has made it clear it sees price as a factor in universal availability.

The FCC keeps its official hands off the decision by using words like “might” and “may.”

It says, for example, given “statutory text, context and common sense,” the state’s policy ”might not ‘regulate’ rates” in the sense used in the statute. It said many FCC orders have held that state regulations that indirectly affect rates are not pre-empted and “may’ be analogous to the California rule.

The FCC also holds that certain state regulations, including rate regulations, are exempted “once wireless service has ‘has become vital to universal service.‘ “ 

”Because the parties have not litigated this case under that universal service exception, the FCC asks the Court to take care not to cast doubt on California’s ability to avail itself of [that holding] in a future proceeding should California choose to re-enact a $0 co-payment requirement,” the regulator said. ■

The Federal Communications Commission has committed another $1 billion-plus in funding for emergency (COVID-19-related) broadband connectivity for schools and libraries.

Also Read: FCC Opens New Connectivity Fund Filling Window

The FCC said Tuesday that in its second round of funding, $1,159,681,350.34 will be going to 2,471 schools and 205 libraries. The money can go toward broadband service and connectivity devices. It can also go for off-campus learning, given the pandemic.

So far, the FCC has committed $2,362,788,847.22 ($1,203,107,496.88 in the first round) and said it has met its own goal of responding to half of the applications within 60 days of the closing of the first filing window.

The most recent filing window opened Sept. 28 and closes Oct. 13.

As part of the massive COVID-19 American Relief Act, the FCC had 60 days to set up an e-rate Emergency Connectivity Fund (ECF) of $7.6 billion (minus $1 million to pay for FCC Inspector General oversight of the program). The Universal Service Administrative Co. which oversees the FCC's ongoing Universal Service Fund (USF) subsidy program, is administering the emergency fund, which is separate from USF subsidies.

A bitterly divided FCC has voted 3-2 along party lines to reform the Lifeline subsidy by applying it to stand-alone broadband and other changes. In the process, a compromise with Republicans brokered by a Democrat at the last minute fell apart — more like blew up — at the last second, and the perceived comity turned into divisive language and angry accusations.

The proposal that was voted on was essentially the same one proposed initially by the chairman.

The key to the compromise, said a source familiar with the compromise, had been a new budget — essentially a cap absent further commission action — on spending.

FCC chairman Tom Wheeler had proposed a soft cap of $2.25 billion on the low-income Lifeline advanced telecommunications subsidy, which the FCC is migrating to broadband. That would have been an extra $750 million in spending, and even that could be exceeded if necessary.

The compromise was $2 billion, and no going over it unless the FCC commissioners vote to raise it. Lifeline is currently the only subsidy without such a cap.

The need for a hard budget for the fund was a key sticking point with the Republican members of the commission, with both Ajit Pai and Michael O'Rielly saying such a budget was necessary. The compromise would have meant a 5-0 vote and reflected many of the proposals made by Pai in a compromise offering earlier this week.

But commissioner Mignon Clyburn, who had brokered the deal, ultimately concluded she could not support it.

"I negotiated in good faith to have a budget mechanism in place that ensures millions of new households will have the opportunity to afford advanced telecommunications services," Clyburn said Thursday. "Upon further deliberation, I concluded that such a mechanism could not fully achieve my vision of a 21st century Lifeline program, but I applaud the deliberative process and want to thank Commissioners Pai and O’Rielly and their staff for engaging well into the night and morning."

Pai was not pleased, but pointed the finger at Wheeler. "Chairman Wheeler and his staff have been actively working to unwind that bipartisan compromise," he said. "Those efforts started with leaking nonpublic information to the press. The Chairman’s Office then encouraged lawmakers and stakeholders, from left-wing special interests to former FCC Commissioners, to blast the deal before the votes could be cast—indeed, before they even knew what the deal was."

And Pai was not done: "And so it gives me no pleasure to state the obvious: This agency in this proceeding represented the worst of government. Bipartisan agreements that would deliver digital opportunity to millions of Americans are thrown away and even Democratic commissioners are bulldozed simply because the Chairman can get away with it."

Commissioner Michael O'Rielly said it was like some cruel, premature April Fools joke, particularly given that he still had issues with the compromise but found he could have supported it.

Wheeler called the proposal an important action, and a simple one, providing low-income Americans access to the advanced telecommunications of the day. Wheeler said that given the item's national verifier for an individual subsidy recipient's eligibility, which takes the eligible carriers out of that process, the FCC is taking "the fox out of the henhouse."

Wheeler said that there is a budget "mechanism" for the program.

Wheeler praised the efforts to find consensus—without addressing the accusations he had worked against the compromise—but said sometimes that process does not yield consensus. He said there was no greater champion of Lifeline than Clyburn.

Clyburn said the chairman had not pressured her into a decision. Asked by reporters if he had bullied Clyburn, Wheeler said: "Balderdash."

To the suggestion Wheeler's staff was trying to gin up opposition to the compromise, Wheeler said: "Balderdash."