Appeals Court Vacates FCC Decision to Limit Telecom Subsidies for Tribal Areas

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A federal appeals court Friday handed down a decision that went against the FCC, concerning the agency’s attempt to bar resellers of telecom service for the poor, from receiving government subsidies in tribal areas.

Since 1985, eligible low-income consumers may receive a monthly discount of $9.25 on qualifying services, and since 2000, low-income consumers living on tribal lands could receive an additional $25 per month for these services through the Tribal Lifeline program. The program recognizes the additional hurdles to build-out affordable telecommunications service on tribal lands.

In 2017, however, the Commission adopted two limitations that tribes and several small carriers challenged: The FCC limited the enhanced Tribal Lifeline subsidy to services provided by eligible telecommunications carriers that use their own fixed or mobile wireless facilities. That would exclude carriers that resell services provided over other carriers’ facilities. The agency also limited the enhanced Tribal Lifeline subsidy to residents of “rural” areas on tribal lands, saying it wasn’t needed for urban areas. At the time, the agency said it was important to limit waste, fraud and abuse in the Lifeline program.  

The changes were supposed to become effective in 2018, however the U.S. Court of Appeals for the District of Columbia Circuit stayed them, pending appeal. The case was argued this fall. Friday, the court granted the petition for review from the Crow Creek Sioux Tribe and intervenor Oceti Sakowin Tribal Utility Authority. Several small carriers and the non-profit National Lifeline Association were also plaintiffs in the lawsuit.

By 2015, approximately two-thirds of eligible low income consumers on tribal lands relied on non-facilities based providers for their Lifeline services, according to the court. The court said the FCC’s decision was “arbitrary and capricious,” and the Commission offered no evidence that facilities-based providers will make up the gap in services when non-facilities-based providers are ineligible to receive the enhanced tribal subsidy.  The agency also didn’t prove that banning resellers would promote network buildout, the court said in its decision.

“The Commission ignored that its decision is a fundamental change that adversely affects the access and affordability of service for residents of Tribal lands,” the court said in its 27-page decision. The court on Friday vacated the 2017 Lifeline Order, (32 FCC Rcd. at 10,522–23,) and remanded the matter back to the FCC for a new notice and comment rulemaking proceeding.  Comments? Email Us.

By Leslie Stimson, Inside Towers Washington Bureau Chief

February 4, 2019   

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