WASHINGTON (CN) - A panel of D.C. Circuit judges appeared sympathetic Thursday to wireless providers that are no longer entitled to federal subsidies for bringing service to rural tribal lands.
Before the Federal Communications Commission made changes last year, phone and internet providers were eligible for a subsidy of as much as $34.25 per household under the Lifeline Assistance Program for serving low-income people who live on tribal lands.
Even if the provider did not own its own facilities and resold service to customers, the FCC traditionally allowed these companies to participate in the program on a case-by-case basis.
But the FCC made a rule change last year that cut these resale providers off from the subsidy, and it made it so that providers are only eligible for the subsidy of $34.25 per household if the tribal lands they service are in rural areas.
Arguing for a group of those providers on Thursday at the D.C. Circuit, Kelley Drye & Warren attorney John Heitmann said the commission changed the rules without fully considering how it would affect service for people who live on rural tribal lands.
Without the benefit of the tribal subsidy, Heitmann said, many resale providers will no longer be able to afford providing plans in rural tribal areas, harming people who rely on that service.
Harris Wiltshire & Grannis attorney Shiva Goel, who argued for a tribe challenging the determination, said the commission's decision runs counter to the stated goal of the Lifeline program and ignores key evidence that shows providers with their own infrastructure will not give the same level of service to the tribes as the resale providers do.
As the three-person panel heard arguments, U.S. Circuit Judge Thomas Griffith mentioned the FCC's claim that elimination of the tribal subsidy for resale providers would spur more investment in infrastructure, ultimately benefiting tribes more in the long term.
Heitmann acknowledged the FCC is free to make such a determination, but that it would first have to come out and say it was changing the goal of the Lifeline program — something that it did not do when it changed the subsidy requirement.
FCC attorney Thaila Sundaresan acknowledged there "would be some loss in subscribership" if the resale providers stop serving tribal lands, but said the Lifeline program has always been aimed at the "dual goals" of increasing affordability and expanding service.
She also said waste, fraud and abuse in the program forced the FCC to make changes to how it operates.
"Lifeline was never a program that was intended to offer profits," Sundaresan said.
U.S. Circuit Judge Judith Rogers pressed Sundaresan in particular, however, on the FCC's contention that service would not drop drastically with the elimination of the tribal subsidies. Rogers pointed out that despite its contentions, the FCC received no statements from major providers that they would step in to fill the gap if the resale providers stopped participating in the program in the face of lower subsidies.
"I know but there's nothing to back that up," Rogers said Thursday, when Sundaresan said other companies will bring service to tribal lands if the resale providers drop out. "I'm looking for the backup."
U.S. Circuit Judge Raymond Randolph rounded out today's panel.