Today's Regulatory Mix: USDA Announces Broadband Investments in Oklahoma and New York, FCC $31 Settlement for Rural Healthcare Program Violations, FCC Closes Clock Phase of Auction 103, FCC TV White Space Rules Proposal

USDA Announces Broadband Investments in Oklahoma and New York

In Oklahoma, the U.S. Department of Agriculture (USDA) Rural Development Oklahoma State Director Dr. Lee Denney announced $13.3 million in two, high-speed broadband infrastructure projects that will create or improve rural e-Connectivity for more than 1,000 rural households in southeastern Oklahoma.

“Pine Telephone and Pine Cellular have been long-standing partners with USDA,” Denney said. “Through USDA’s ReConnect program, customers in southeastern Oklahoma will get access to the latest broadband technology. That will have a positive economic impact for the farmers, ranchers, small business owners and families who live in these communities. Under the leadership of President Trump and Agriculture Secretary Perdue, USDA is committed to partnering with rural communities in deploying this critical infrastructure, because we know when rural America thrives, all of America thrives.”

The USDA Rural Development State Director for New York Richard Mayfield announced an investment of $10.3 million in high-speed broadband infrastructure that will create or improve rural e-Connectivity for 2,875 rural households, 10 pre-subscribed farms, three pre-subscribed businesses and two educational facilities in Yates County, N.Y.

“The ReConnect program, and investments like these in Yates County, will increase access to opportunities across multiple sectors, such as public safety, economic development, education and health care,” Mayfield said. “Under the leadership of President Trump and Agriculture Secretary Perdue, USDA is proud to partner with Yates County as we continue to build out this critical infrastructure in rural communities across America, because we know when rural America thrives, all of America thrives.”

FCC $31 Settlement for Rural Healthcare Program Violations

The FCC announced it entered into a $31 million settlement with TeleQuality Communications for violating competitive bidding and rate rules and overbilling the FCC’s Rural Health Care Program. The settlement requires TeleQuality to provide the Universal Service Fund with $31 million worth of repayments and forfeitures of payment claims as a sanction. The Company also agreed to a compliance plan which requires it to designate a compliance officer, establish new operating procedures to ensure compliance with FCC rules, file regular reports on its compliance to the FCC for the next five years, and promptly report any new violations.

The Company admitted to, over a four-year period, from 2015-2018, using fabricated sales quotes as urban rates and failing to use FCC-required methods for determining rural rates. In violation of competitive bidding rules, TeleQuality assisted health care providers in creating the bid evaluation criteria and bid matrices against which TeleQuality’s bids would be judged. The Company also provided improper incentives like free routers and other equipment to providers to encourage them to award TeleQuality the contracts. In addition, from 2010 to 2019, TeleQuality improperly reported its revenues in an attempt to shield itself from contributing to the Universal Service Fund.

“The FCC is determined to root out waste, fraud, and abuse in our Universal Service Fund programs, including the Rural Health Care program. This settlement will put participants in our Rural Health Care program and other USF programs on notice—they can’t get away with diverting and misusing taxpayer funds meant to benefit American consumers by closing the digital divide,” said Chairman Pai. “We have made combatting abuse of our programs a priority and, to that end, we established a Fraud Division within the Enforcement Bureau dedicated to that fight. I thank the Bureau staff for their hard work and dedication to protecting the integrity of the Rural Health Care program.”

FCC Closes Clock Phase of Auction 103

The FCC announced that, on January 30, 2020, bidding in the clock phase of the incentive auction of Upper Microwave Flexible Use Service (UMFUS) licenses in the Upper 37 GHz, 39 GHz, and 47 GHz bands (Auction 103) concluded with the net revenue requirement being met. The Public Notice provides information regarding the assignment phase of Auction 103. Bidders that  won at least one generic block of spectrum in one Partial Economic Area (PEA) in the clock phase of the auction are eligible—but not required—to participate in the assignment phase, in which they can place bids for specific frequency blocks.

Bidders eligible to participate in the assignment phase will be able to log in to the assignment phase bidding system between 10:00 a.m. Eastern Time (ET) on Tuesday, February 11, 2020, and 12 noon ET on Wednesday, February 12, 2020, to download their assignment phase bidding options (based on their clock phase winnings), view the sequence and timing for the assignment rounds for all PEAs, and identify the assignment rounds in which they will be eligible to participate. At 1:00 p.m. ET on Wednesday, February 12, 2020, bidders will have access to the bidding system for the assignment phase mock auction. On Thursday, February 13, 2020, the FCC will conduct a mock auction for the assignment phase of Auction 103, according to the schedule announced below. The first round of the assignment phase bidding will begin on Tuesday, February 18, 2020.

FCC TV White Space Rules Proposal

FCC Chairman Ajit Pai issued a News Release announcing that he was proposing to provide additional opportunities for unlicensed white space devices to deliver wireless broadband services in rural areas. Such devices operate in portions of the broadcast television bands (channels 2-35) and spectrum not being used for authorized services. Chairman Pai is seeking to spur the continued growth of these devices to provide broadband service to rural and underserved communities. The FCC will vote on his proposal, which the Chairman shared this morning with his fellow Commissioners, at the Commission’s monthly Open Meeting on February 28.

White space devices can be used to provide a variety of wireless services, including broadband. Specifically, Chairman Pai is proposing to permit higher transmit power and higher antennas for fixed white space devices in rural areas. If adopted, these changes would allow white space devices to reach users at greater distances, thus enabling improved broadband coverage. Higher power would also enable signals to better penetrate foliage, buildings, and other obstacles. Additionally, his proposal would permit higher power mobile operations within geofenced areas and proposes rule revisions to facilitate the development of new and innovative narrowband Internet of Things-based services.

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The Regulatory Mix, Inteserra’s blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of an Inteserra Briefing.