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Call for Form 477 Challenge Process Grows Louder

Randy Sukow Apr 10, 2019

The FCC received reply comments this week from those saying the Commission should not go forward with plans for universal service distribution without a first adopting a process for challenging eligibility requirements based on FCC Form 477 data.

The comments come as telecommunications providers, especially rural providers, have increased criticism of the FCC’s method for creating broadband availability maps and applying them to funding programs. The USDA’s Rural Utilities Service already has indicated it will allow applicants to its ReConnect program to challenge decisions based on Form 477 data.

“Simply put, the withdrawal of needed high-cost support for a rural study area inaccurately identified as overlapped could result in a ‘broadband availability backslide’ that runs counter to the goals of universal service and every important step the Commission has otherwise taken to expand rural broadband access,” said NTCA-The Rural Broadband Association in its reply comments. “Thus, the record supports a challenge process to make sure the Commission gets measures of availability as right as possible every time, for every consumer.”

NTCA noted that Chairman Ajit Pai has agreed that there is a need for some evidentiary process to ensure that universal service support goes to areas where it is needed and that it is not mistakenly withdrawn from otherwise unserved areas. “The needs of rural consumers for both voice and broadband consumers – as well as the Commission’s statutory duty to these consumers – outweigh any administrative efforts involved with a challenge process,” it said.

USTelecom recently announced that it is leading a coalition conducting a two-state pilot program of such an evidence-gathering process, which includes crowdsourcing and other techniques that go beyond Form 477. “There is clear and significant evidence already in the record that 477 data is flawed," it said in its comments. "All evidence points to the need to improve data so that there is real clarity about where providers provide service and moving ahead with a plan to remove support based on insufficiently granular FCC Form 477 data without a challenge process."

The Wireless Internet Service Providers Association (WISPA), one of the groups working with USTelecom in the pilot, advocated FCC implementation of future reverse auctions, as it used in last year’s Phase II CAF auction. It criticized some entities that oppose auctions over some of their complexities. “The concept of ‘artificial’ competition, to the extent there is such a thing, is eliminated through an auction process that utilizes a challenge process, which creates ‘real’ competition in places with proven unsubsidized competition,” WISPA said.

Update, April 12: In today’s issue of the Federal Register, RUS published some technical changes to the ReConnect program. The changes include a redefinition of the term “Broadband loan” as originally published in a December 2018 Funding Opportunity Announcement and details a process to challenge service area eligibility. “An applicant may challenge the protected status of a service area if the applicant believes that at least 75 percent of the households in the part of the proposed funded service area in which they are seeking ReConnect funds are not receiving broadband service at the level for which an original RUS broadband loan was made,” RUS says in today’s notice. “The agency will assess the ability to expand its challenge process for future rounds of funding.” Until RUS can make further changes, it will require that internet providers submit challenges with applications for ReConnect funding.

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