E-Rate fraud is back in the spotlight following the indictment of a Dallas charter school CEO and the owner of a contracting company for an alleged kickback scheme resulting in over $300,000 in illegal subsidies. Federal prosecutors stated that the pair violated the E-Rate program’s competitive bidding requirements and submitted fraudulent invoices to the Federal Communications Commission (“FCC”).  The indictment comes on the heels of major FCC settlements and enforcement actions against educational institutions and service providers for alleged E-Rate violations.  FCC Chairman Pai has repeatedly criticized the administration of the E-Rate program and the indictment may spur further calls for action to combat fraud in the program.

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iStock_000006131068MediumOn May 18, 2017, at its May Open Meeting, the Federal Communications Commission (“FCC”) adopted a Notice of Proposed Rulemaking and Order on a two-one vote, seeking comment on whether it should reform the so-called rural “rate floor” on basic voice service or eliminate it entirely.  The rural rate floor rule requires carriers receiving Connect America Fund support to charge rural customers a minimum monthly rate or risk losing subsidies.  The FCC imposed a two-year freeze on the rural rate floor to provide it with sufficient time to consider the proposed reforms.  The rulemaking is yet another reversal of a policy supported by former FCC Chairman Wheeler, which current Chairman Pai dissented from as a Commissioner, and represents another step by the Pai FCC to roll back its predecessor’s actions.

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As part of its continued focus on accelerating broadband deployment, the Federal Communications Commission (FCC) eased restrictions on its universal service support for deployments by rate-of-return carriers in rural and other high-cost areas.  In a unanimous Order on Reconsideration issued at its April meeting, the FCC found that the restrictions drove providers to exclude high-cost areas from planned deployments, “stranding” communities without broadband.  Rate-of-return carriers will be able to receive support for broadband deployments up to certain thresholds, so long as they cover any additional expenses themselves.  Rate-of-return carriers should factor in this potential support when assessing broadband deployment plans or expanding existing buildouts.  As for providing support in areas served by price cap incumbent carriers, the FCC faces challenges to its recent order on instituting the Connect America Fund (CAF) Phase II auction, under which it will provide support to deploy broadband in unserved areas where the price cap carriers did not elect receive support.  Comments on the CAF challenges are due on May 18, 2017, with replies due on May 29, 2017.

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iStock_000006131068MediumOn February 23, 2017, during the second open meeting under Chairman Ajit Pai, the Federal Communications Commission (FCC or the Commission) unanimously approved an order launching the long-awaited second phase of the Mobility Fund.  The Mobility Fund offers financial support to service providers to preserve and extend mobile broadband and voice services in unserved and underserved areas.  The FCC’s order will provide up to $4.53 billion over the next decade to expand 4G LTE coverage to areas currently lacking that level of service, with $340 million reserved for Tribal areas.  This order is one component of Chairman Pai’s focus on bridging the digital divide.  The full text of the FCC’s order and further notice of proposed rulemaking has not been released.
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Today, the FCC adopted a series of steps intended to solicit proposals from communications providers to conduct service-based experiments to explore the transition to all-Internet Protocol (“IP”) networks. Chairman Wheeler described today’s actions as “a big deal” and “an important moment.” He and the other Commissioners emphasized that the experiments would be completely voluntary, will