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WM"INGTON O'f1C1;
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The Honorable Julius Genaehowski
Chairman
Federal Communications Commission
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Washington, PC 20554
Dear Chairman Genaehowski:
I am writing to you expressing concerns that I have regarding the Federal
Communications Commission's (FCC) announcement ofthe Connect American Fund on
October 27,2011. Ofparticular concem is the legal authority ofthe FCC to expand the
Universal Service Pund (USP) to include broadband coverage. I am additionally
concerned about the FCC's decision to expand USF coverage to broadband: at a time
when its original mission ofproviding phone coverage is in need ofsignificant reforms.
Current law provides the FCC with the goal ofbringing "access to advanced
telecommunications and information services" to all Americans. 47 U.S.C. § 254(b);
Yet the operation ofthe USF is limited to ''telecommunications services". § 254(c)(1).
Broadband internet service was declared by the FCC in 2002 to be an "information
service" in which data processing and transmission were deemed inseparable components
thereof. 17 FCC Rcd 4798 (2002). The Supreme Coun affilmed the permissibility of
this definition in National Cable & Telecommunications Ass 'n. v. Brand X Internet
SerVices, 545 U.S. 967 (2005). As a result, FCC counsel recognized that, in order to
extend USF to broadband services, it had to change its intelpretation of"broadband" as it
is categorized as a "telecommunications service" or an "information service." 2010 FCC
Lexis 2899, *8-10, 13-14.
This definitional change reverses FCC policy adopted in 2002 and confirmed by the
Supreme Court in 2005. An agency is entitled to much deference when interpreting
statutory definitions and it may also change its interpretations from time to time. Brand
X, 545 U.S. at 981; Chevron Us.A.., Inc. v. Notural Resources Defense Council, Inc., 467
U.S. 837, 842-43 (1984). Nevertheless, agencies may not issue defmitions, or
applications thereof, that are arbitrary, capricious, or otherwise contrary to statutory law.
BrandX, 545 U.S. at 981; Chevron, 467 U.S. at 844.
As with other agenCies, the FCC may avoid a charge ofbeing arbitrary and capricious in
a definitional change by asserting some sort ofchanged circumstances or other reasoned
Nov. 2. 2011 2: 19PM No. 0074 P. 3
factors that justify the change. Inthe issue ofbroadband internet service, there has been
nO such change nor a revelation in the wisdom ofpolicy. To be sure, technology has
advanced and the number ofpeople using broadband internet access has increased
dramatioally since the first half ofthe last decade. Yet the nature ofbroadband internet
services has not changed since the FCC issued its interpretation in 2002. Consequently,
the new interpretation does not reflect a reasoned reassessment ofthe subject ofthe
regulation (broadband internet services) but merely a policy decision. My concern is that
a policy desire alone should not be enough to legally justify the reinterpreting how the
service is categorized by a statutory term ofan administrative agency.
Perhaps then-chairman Michael Powell said it best in his concurrence with the 2002
ruling, as found in 17 FCC Red, at 4867:
The Commission must attempt to faithfully apply the statutory definition to a
service, based on the nature ofthe service, including the technology used and its
capabilities, and the natw'e of the interactive experience [ ... ] The Commission
is not permitted to look at the consequences of different definitions and then
choose the label that comports with its preferred regulatory treatment. That would
be contrary to law. The Commission must apply~definition and then accept the
regulatory regime that adheres to that classification and that which Congress
chose when it adopted the statute.
Is the FCC's CWTent course of action consistent with Chairman Powell's statement? I
cannot help but feel concerned that the statutory authority is lacking to alter the
application ofthe definitions of"telecommunications service" and "information service"
on a purely policy basis without any real change in circumstances or understanding.
In addition to the questions surrounding the legal authority for the FCC to expand USF
coverage to broadband, I believe that it would be prudent for the FCC to address several
serious issues in need ofreform with the USF. I am particularly concerned with the
reported abuses in the Lifeline program. According to a letter of October 20, 2011, from
Thomas A. Schatz,.President ofCitizens Against Government Waste:
In 2008, the Lifeline program began allowing telephone companies to provide
free wireless service to certain eligible individuals. According to the Government
Accountability Office, this addition to the Lifeline program resulted in the number
ofrecipients and overall program spending to nearly double in size from 2008 to
2011. An investigation by the Federal Communications Commission into these
sudden, drastic increases revealed multiple instances ofprogram recipients using
Craigslist to advertise the sale ofLifeline-subsidized phones and service. In other
cases, Lifeline beneficiaries have violated the one phone line restriction ofthe
program by signing up for the Lifeline service from multiple carriers.
I would appreciate hearing from you about the FCC's plans for combating future abuses
ofthe Lifeline program and other non-Lifeline program abuses within the USF. I believe
Nov. 2. 2011 2:19PM
No. 0074 P. 4
that it would be prudent to rid the USF ofsignificant waste, fraud, and abuse before
creating a massive new program to provide for broadband access with the USF.
Thank you for your review ofthis correspondence and I look forward to receiving your
reply. Should you have any questions regarding this letter, please feel free to contact me,
or my Legislative Director, Scott Cunningham, at 202.225.6605 or
scott.CUOOingh!!lP@mail,house.goy.
~-
Member ofCongress
Nov. 2. 2011 2:19PM
,..,.:
No. 0074 P. 1
. U.S.Oongressman '. . .'
~KENNYMARCHANT
..' Represen' the 24th Distl'ict ofTexas
1110 Lollgworth HOB W.shinBl0n, DC 20515 202-225-6605 202-225-0074 fax
Fax Cover Sheet
To:
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Date: t> ",-
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CC:
Fax:
U.S. Representative(TX~:l4)
Chief of Staff
Legislative Director
Communications Director
Online Communications Advisor
Legislative Assistant. .
Legislative Aide
Legislative Correspondent
Staff Assistant
Subject: _..,.-__~_
.p~ges:.-2:::L.-Cincludlng caver'sheet) .
From:
V·~Marchant,
Brian Thomas,
ScottCunnlngha~,
Ryan Moy,
Donelle Harder,
James Williams,
Maddie Kempf,
Dustin Siggins,
John Deoudes,
Other: --..:.- _
Comments: .