Ten States Challenge FCC Broadband Subsidy Fast-Track

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By Kyle Daly

June 30 — Ten states are asking a federal appeals court to scrap an expedited process for broadband providers to enter a subsidy program for high-speed Internet service.

In a Wisconsin-led June 30 petition , the states called on the U.S. Court of Appeals for the District of Columbia Circuit to review and ultimately vacate a new process the Federal Communications Commission established to determine telecommunications providers' eligibility for the Lifeline program, which offers subsidies for voice and broadband service to low-income Americans.

The challenge echoes an earlier one from the National Association of Regulatory Utility Commissioners (NARUC). It further tests the durability of the FCC's decision to establish the fast-track procedure as a way to entice broadband providers to participate in the subsidy program.

State officials argue in both challenges that the FCC's federal eligibility process is arbitrary and capricious and preempts state commissions' authority to decide which providers are eligible for Lifeline subsidies.

Arkansas, Idaho, Indiana, Michigan, Montana, Nebraska, South Dakota and Utah, along with the Connecticut Public Utilities Regulatory Authority, joined Wisconsin in filing the challenge.

NARUC sued the FCC over the federal eligibility process in early June.

NARUC General Counsel James Bradford Ramsay told Bloomberg BNA his organization believes the change could exacerbate fraud and abuse by diminishing state oversight, among other concerns, but also that it directly contravenes a provision in federal communications law which makes state commissions the primary authorities in naming eligible providers.

“If you want to have a debate, it’s an interesting intellectual exercise, but for these purposes, Congress already made the call,” Ramsay said. “The people at the FCC, smart as they may be, don’t get to tell Congress what to do.”

An FCC spokeswoman did not immediately respond to a request for comment.

Program Expanded to Broadband

In March, the agency expanded the Lifeline program, originally established to subsidize telephone service, to include broadband service.

Gigi Sohn, counselor to FCC chairman Tom Wheeler, has defended the new eligibility process against suggestions that it preempted or undermined state authority. Providers would still have to be certified at the state level to qualify for state-run Lifeline counterparts, she said.

Some states offer subsidies to low-income consumers, ranging from $2.50 per consumer per month in Idaho to $13.50 per consumer per month in California, according to NARUC's earlier petition. The FCC's Lifeline program subsidizes telephone or broadband service at the rate of $9.25 per consumer per month.

The state and NARUC petitions will almost certainly be consolidated. Under D.C. Circuit procedures, the court generally consolidates petitions involving the same administrative proceeding and those involving the same issues.

Other parties besides the ten states filing June 30 have told Ramsay they intend to file petitions that would ultimately be consolidated as well, he said.

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

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

For More Information

The challenge from Wisconsin, et al., is available at: http://src.bna.com/goV.

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

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