FCC Denies USF Waiver for Alaskan Telco Adak/WCC Despite Bankruptcy Warning

The FCC rejected the requests by Alaskan telco Adak Eagle Enterprises and subsidiary Windy City Cellular for a waiver of its universal service funding caps. In a 14-page order approved 5-0, commissioners found AEE/WCC provided "no basis" for relief despite arguments WCC could go bankrupt without more support. In a 2012 order, the Wireline and Wireless bureaus found AEE/WCC had unjustified costs and denied their waiver from a $250/line monthly high-cost support cap imposed under the 2011 USF/intercarrier compensation reform order, though it granted a temporary extension of their previous interim monthly support levels of $33,276 and $40,104 to give the companies time to adjust and avoid service disruptions. AEE/WCC filed a petition for reconsideration and application of review in 2013 seeking above-cap support levels, triggering a lengthy FCC revenue proceeding during which further temporary extensions of interim support were granted. In Thursday's denial, the full commission found AEE/WCC "continued to have excessive and unreasonable expenses." The commission upheld a bureau finding that WCC was not the only voice provider on a significant portion of Adak Island due to the presence of GCI, an alternative provider. It said AEE and GCI provide voice support to those areas of Adak Island where the vast majority of people live. The commission disputed AEE/WCC's contention that the bureau determination was based on promises of future service, concluding that it was based on "current and actual" service. The FCC acknowledged AEE/WCC's claim that without further support it could discontinue service at one cell site, causing some consumers to lose coverage in that area, but it said some trade-offs were needed to ensure USF support was used "efficiently" to expand overall national coverage to as many people as possible. "It is not a guarantee of support ... for every cell site," the order said. The agency acknowledged AEE/WCC's warning that WCC could go bankrupt without higher support, but said it couldn't justify a waiver based on such a threat. Commissioners Mignon Clyburn and Mike O'Rielly issued a joint statement recognizing that "serious questions remain" despite the extensive record, but said that without "sufficient answers" the agency could not provide a waiver. "Rather than prolong this already lengthy inquiry, it is important to provide a response," they said. "We are very mindful of the potential impact on residents of Adak, but there is no evidence that they are at risk of losing access to communications services." A lawyer for the company had no immediate comment.