Blanca Telephone Ordered to Restore Over $6 Million to USF

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The FCC ordered Blanca Telephone Company to re-pay more than $6 million to the Universal Service Fund, which supports the deployment of communications networks in high-cost, rural areas.  

The eastern Colorado carrier became eligible in 1997 to receive high-cost support for providing local exchange telephone service in parts of Alamosa and Costilla counties. Blanca offered commercial mobile radio service (CMRS), a non-regulated service, both within and outside of its area. Blanca included the costs of this non-regulated service in the regulated cost accounts it submitted to the National Exchange Carriers Association (NECA), inflating the amount of high-cost support Blanca received from the USF.

In 2012, NECA discovered Blanca’s inflation and told the carrier to correct its accounting, and more, importantly, to re-pay $6,748,280 in improperly paid USF support for 2005-2010. Blanca argued to the FCC it was entitled to the money to deploy wireless service because wireless is a USF supported service. The Commission called that “erroneous” in its decision released yesterday.  

The agency said Blanca ignored Commission rules and the FCC’s obligation to protect the Universal Service Fund from waste, fraud and abuse. It denied a petition for reconsideration from Blanca, and noted the Office of the Managing Director can recoup the money, including referring the debt to the Justice Department for collection.

FCC Commissioner Mignon Clyburn said the telephone company should have known better and the Commission should have figured out what was going on sooner. “At least today we can make clear that at a minimum the [USF] is due the money that was wrongfully spent.”

Her colleague, Commissioner Michael O’Rielly calls what occurred “troubling” and that it’s only now being remedied. “We must do better. The longer the delay, the greater the risk that we will lack the evidence and ability to pursue even the most fraudulent of behavior. In this instance, the rules were sufficiently clear, the misconduct was egregious, and the proof is adequately documented that I am willing to collect the overpayments, notwithstanding the delay.”

December 12, 2017               

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