FCC to Focus on USF Enforcement, Pay TV Customer Protection

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By Lydia Beyoud

April 11 — A recent $51 million proposed fine is a sign of more to come in Universal Service Fund integrity and fraud enforcement, Federal Communications Commission Enforcement Bureau Chief Travis LeBlanc said April 11.

The Enforcement Bureau issued a notice of apparent liability against Total Call Mobile Inc. on April 7 for allegedly enrolling thousands of duplicate and ineligible consumers into the Lifeline program since 2014.

The case was brought by the bureau's USF Strike Force, a group within the bureau formed in July 2014 to curtail waste, fraud and abuse in all four USF programs.

“The cases that they've been working on and investigations should start coming to fruition this year,” LeBlanc said during a Practicing Law Institute panel in New York.

“We will, I think, continue this year to aggressively police the funds that the FCC oversees or administers from fraud, waste and abuse,” LeBlanc said.

The FCC alleged the company collected about $9.7 million in improper USF payments. While the Total Call case sets a new record for proposed Lifeline abuse fines, the Task Force is looking across the entirety of the program, LeBlanc said.

Pay TV Under Scrutiny

Pay TV consumer protection work is another of the Enforcement Bureau's highest priorities, LeBlanc said.

The bureau hasn't focused much on consumer protections for cable and satellite subscribers in recent years, but views it as important to do so now, said LeBlanc.

“The complaints that we are seeing from subscribers of cable and satellite services really are high,” he said. Consumer complaints relate to unclear bills, debt collection practices, and quality of service.

Those complaints raise concerns for the bureau, “especially given that the rules that we have on the books that apply to consumer protection in the cable context are pretty strong,” he said. LeBlanc pointed to existing rules on prompt cancelation of service and requirements to protect customers' personally identifiable information.

Calculating Fines

LeBlanc said fines have gotten larger under his tenure as bureau chief. “However, it's not just because we're looking for the maximum fines,” he said. “It's because we're targeting the most egregious cases” where the most consumers are harmed, he said.

The Enforcement Bureau has often been the focus of congressional scrutiny and the telecommunications industry's ire since LeBlanc, a former senior California state prosecutor, took the helm in 2014. The bureau has proposed a number of record fines during his tenure. The public interest community has supported those actions, but telecom industry observers have criticized the agency and LeBlanc, saying the high proposed fines are either overly harsh or intended to garner good press while ultimately bringing in far less to the Treasury upon settlement.

A number of components factor into the bureau's proposed fines, including repeat offenses, prior conduct, a company's ability to pay and statutory requirements, LeBlanc said. Any of those factors can cause fines to go up or down, he said.

A company's willingness to self-report any violations, offer customer restitution and willingly put compliance measures in place can reduce fines during settlement negotiations, he said.

The FCC recognizes that such measures carry costs for companies, he said. “There's a lot that a company has to do to meet the compliance provisions of a consent decree,” said LeBlanc. The FCC's aim is to make sure the fine is appropriate, given the settlement of the whole, he said, adding that the Enforcement Bureau generally “substantially” reduces proposed fines in order to reach a settlement.

LeBlanc said companies shouldn't simply not respond to an enforcement action. “That really is a bad idea. I think you want to engage,” he said.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com