State Regulators Challenge FCC Lifeline Revamp

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By Lydia Beyoud

June 3 — State regulators are challenging the Federal Communications Commission's decision to create a federal fast track for broadband providers to enter its Lifeline subsidy program.

The National Association of Regulatory Utility Commissioners (NARUC) asked the U.S. Court of Appeals for the District of Columbia Circuit June 3 to throw out parts of FCC rules expanding Lifeline to include standalone broadband service National Association of Regulatory Utility Commissioners v. FCC, D.C. Cir., 16-01170, petition filed 6/3/16 .

The group's challenge strikes at one of main elements of the FCC's Lifeline revamp. In March, the commission expanded what had been a telephone service subsidy program to include subsidies for broadband Internet service. It created a streamlined application process for broadband providers, such as Comcast Corp. and Charter Communications Inc., to provide Lifeline subsidies to low income Americans to pay for phone and broadband services, in order to entice broadband providers to participate in the program (2016 TLN 5, 4/1/16).

NARUC asked the court to vacate portions of the FCC's rules on the grounds they are arbitrary and capricious, beyond the FCC's jurisdiction, an abuse of discretion and not in accordance with the law. The association is also seeking remand of the issue to the FCC with directions from the court.

State commissioners are responsible for designating eligible telecommunications carriers for Lifeline services under Sec. 214(e)(2) of the Communications Act of 1934, NARUC said in its filing. Without state oversight, the Lifeline program is at a greater risk of waste, fraud and abuse, the group said.

“Congress specifies that the FCC simply has no role in the designation process unless the State cannot act as a result of State law,” NARUC said.

The FCC overstepped its regulatory authority by preempting not only state but also congressional authority in creating a streamlined approval process at the commission, the state regulators' group said.

“If upheld on review, this flawed view of the power of an Agency vs. the power of Congress to specify the scope of that agency powers will break new ground transferring yet another substantial swath of authority from Congress to agencies,” NARUC said.

The FCC declined to comment on the petition.

Senior officials have previously said state regulators would still have a role in Lifeline oversight. When states offer their own Lifeline subsidy in addition to the federal one, providers would still have to certify at the state level to receive state subsidies, Gigi Sohn, counselor to the chairman, said March 23 (2016 TLN 10, 4/1/16).

“We continue to work closely with the agency and appreciate their outreach across the board on Lifeline issues. But states have statutory duties to maintain effective oversight of the evolution of the federal Lifeline subsidy programs to cover broadband,” Commissioner Chris Nelson of South Dakota, who chairs NARUC’s Committee on Telecommunications, said in a statement.

“We are seriously concerned about the effect of this decision on complementary state programs in the long term, and the FCC’s interesting claim that it can preempt Congress certainly deserves judicial scrutiny,” Nelson added.

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

For More Information

Text of NARUC's filing is http://src.bna.com/fAw.