FCC Urges Denial of Petition to Force USAC to Pay Universal Service Reimbursements

The U.S. Appeals Court for the D.C. Circuit should deny Essential Network Technologies and MetComm.Net's Feb. 14 petition challenging the authority of the FCC and the Universal Service Administrative Co. to withhold reimbursement of discounts for IT and broadband services that the two companies provided to schools under Section 254 of the Communications Act (see 2402200044), said the FCC’s opposition Wednesday (docket 24-1027).

The mandamus relief that the petitioners seek is a drastic remedy that should be invoked only in extraordinary circumstances, the FCC’s opposition said. In cases involving claims of unreasonable agency delay, mandamus is warranted only when delays are egregious, it said. The petitioners haven’t “come close to showing that they are entitled to such extraordinary relief,” it said.

The case involves actions of the USAC, which administers the FCC’s universal service subsidy program, said the commission’s opposition. The petitioners received subsidies under that program for several years for providing discounted broadband services to schools under Section 254, it said.

But in the past few years, USAC “discovered evidence that the schools and petitioners may have had a prohibited pre-existing relationship before the schools awarded their business to petitioners,” said the opposition. Such a relationship would have violated an FCC rule requiring that schools conduct a fair and open competitive bidding process before entering into contracts for discounted services, it said. In light of that evidence, USAC suspended universal service payments to the petitioners pending investigations to determine whether the petitioners’ contracts complied with FCC rules, it said.

Though the petitioners never requested intervention by or relief from the FCC concerning USAC’s actions, they asked the D.C. Circuit for a writ directing the FCC to terminate USAC’s suspension of the petitioners’ universal service payments and to promptly issue funds that USAC withheld from them, said the opposition. They contend this is the commission’s statutory duty under Section 254, it said.

But nothing in the statute requires the FCC to act, and “it would make little sense” for the agency to resume universal service payments to the petitioners “when there is some doubt whether they are eligible to receive” them, the opposition said. Even assuming that the petitioners could show that they are entitled to the withheld funds, they wouldn’t need mandamus relief to recover them, it said: “They could obtain reimbursement in the normal course of litigation.”

The petitioners also claim that USAC engaged in unreasonable delay in conducting its investigations. They want the D.C. Circuit to direct the FCC within 90 days to render decisions about USAC’s investigations and report them in writing, it said.

But such “extraordinary relief” is “wholly unjustified,” the opposition said. USAC’s investigations “implicate a large number of contracts and funding requests,” it said. In light of the “scope and complexity” of the investigations, which USAC formally started about two years ago for Essential and only about a year ago for MetComm, “this is not a case of unreasonable delay,” let alone delay so egregious as to warrant mandamus, it said: “In any event, USAC expects to complete these investigations next month.”