FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Mark Takano U.S. House ofRepresentatives 1507 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Takano: March 22, 2017 Thank you for yom letters regarding the W:i:reline Competition Bmeau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chaim1an is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our cotmtry, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under om rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly grru1ted plior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there 'is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Mark Takano has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had ovenidden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not cunently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to An1erican consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Jose E. Serrano U.S. House of Representatives 2354 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Serrano: March 22, 2017 Thank you for yom letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chaim1an is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when annmmcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features ofwealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, 1 believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several impmiant points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected caniers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation tmder our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Jose E. Serrano has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the comi for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in ce1iification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states tmtil 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, ~ v, ~Wv- Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Eleanor Holmes No1ion U.S. House of Representatives 2136 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Norton: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when annmmcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several impmiant points. First, the Order affected only nine of the more than 900 cmTiers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected cmTiers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Eleanor Holmes Norton has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process tmlaw:ful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately ovenˇide checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not cmrently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pa:i FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF TriE CHAIRMAN The Honorable Jerrold Nadler U.S. House of Representatives 2109 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Nadler: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carders by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable JetTold Nadler has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Gwen Moore U.S. House ofRepresentatives 2252 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Moore: March 22,2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opp01iunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[ a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Gwen Moore has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not cmrently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Gregory W. Meeks U.S. House ofRepresentatives 2234 Raybmn House Office Building Washington, D.C. 20515 Dear Congressman Meeks: March 22, 201 7 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chailman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opporttmity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a ]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our count1y, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to co1111ect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected ca1Tiers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Gregory W. Meeks has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the comt for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 tmtil June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program--does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Barbara Lee U.S. House ofRepresentatives 2267 Raybmn House Office Building Washington, D.C. 20515 Dear Congresswoman Lee: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowennent Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Barbara Lee has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could nm afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Rohit Khanna U.S. House ofRepresentatives 513 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Khanna: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key banier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that"[ a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband caniers by state commissions; that process proceeds apace. Second, eight of the nine affected caniers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association' filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state govemments, as Page 2-The Honorable Rohit Khanna has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to so~eone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are in,sufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had ovenidden such safeguards 4,291 ,64 7 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program---does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Hank Johnson U.S. House of Representatives 2240 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Johnson: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' pruticipation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a ]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our mles to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to pruticipate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Hank Johnson has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 ofthe Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not cmTently exist and will not start operating until the end of 201 7. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance. Sincerely, -~ v, r~- Ajit V. Pai ˇ FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable RaUl M. Grijalva U.S. House of Representatives 1511 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Grijalva: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when annolmcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several imp01iant points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline progran1-that' s less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Raul M. Grijalva has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the corut for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process tmlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safegumˇds are insufficient: My investigation last yemˇ into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let' a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Fmther, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong m1d effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, n ,~ A: v, ~~ Ajit V. Pai ' FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Keith Ellison U.S. House of Representatives 2263 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Ellison: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' pmiicipation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key banier to digital oppottunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chm1ce to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Keith Ellison has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifYing the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states tmtil 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Steve Cohen U.S. House of Representatives 2404 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Cohen: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an imp01tant tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband caniers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state govenunents, as Page 2-The Honorable Steve Cohen has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into tl1ese matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had ovenidden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline progran1-does not cmTently exist and will not start operating tmtil the end of2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any fmiher assistance. I Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Yvette D. Clarke U.S. House ofRepresentatives 2058 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Clarke: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowennent Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to c01mect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This cmtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Yvette D. Clarke has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fiˇaud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable G.K. Butterfield U.S. House of Representatives 2080 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Butterfield: March 22, 2017 Thank you for your letters regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chaim1an is closing the digital divide. And I recognize unaffordability as a key batTier to digital opportunity. Last September, I explained when annotmcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline progran1 is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 caniers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband caniers by state commissions; that process proceeds apace. Second, eight of the nine affected caniers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable G.K. Butterfield has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawfuL Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verifY eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consun1ers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v~ Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Alma Adams U.S. House of Representatives 222 Cannon House Office Building Washington, D. C. Dear Congresswoman Adams: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key banˇier to digital opportunity. Last September, I explained when annm.mcing my Digital Empowerment Agenda that "'[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers pruticipating in the Lifeline progran1-that' s less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Alma Adams has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, aq,ruing that it is unlawful, and the FCC itself recently asked the comt for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the comts ultimately deem the process unlawfuL Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state ofMichigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states unti12019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consmners who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNtCATlONS COMM!SSlON WASHJNGTON OFFICE OF THE CHAiRMAN The Honorable Joyce Beatty U.S. House of Representatives 133 Carmon House Office Building Washington, D.C. Dear Congresswoman Beatty: March 22,2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' pmticipation in the Lifeline progrmn. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And ] recognize unaffordability as a key banier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile hroadbm1d are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regmˇding the Order, I would make several important points. First, the Order affected only nine of the more than 900 caniers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight ofthe nine affected caniers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to pmticipate in these proceedings and limited the Commission's ability to consider all designation criteria v.rith a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state goverrnnents, as Page 2-The Honorable Joyce Beatty has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of tllis legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscrinlinately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until Jm1e 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program--does not currently exist and will not stalt operating until the end of2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMlSSlON WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Don Beyer U.S. House ofRepresentatives 1119 Longworth House Office Building Washington, D.C. Dear Congressman Beyer: March 22,2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key batTier to digital opportunity. Last September, I explained when announcing my Digital Empowem1ent Agenda that "[ a]lthough gigabit services and mobile broadbm1d are becoming common features of wealthier, metropolitan areas, they mˇen't tmiversal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 cm-riers pmiicipating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to pmiicipate in these proceedings m1d limited the Commission's ability to consider all designation criteria with a fulsome record. Wlmtever one thinks ofthe merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate LifeHne providers or whether such designations must be made by state governments, as Page 2-The Honorable Don Beyer has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the comts ultimately deem the process unla-vvful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not cunently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover all states until 2019. We need to make sme that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. fl. Sincerely, n ,_ lh-~ Vˇ {~ G Ajit V. Pai ˇ FEDERAL COMMUNiCATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Earl Blumenauer U.S. House ofRepresentatives 1111 Longworth House Office Building Washington, D. C. Dear Congressman Blumenauer: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' pruticipation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opporttmity. Last September, I explained when armouncing my Digital Empowennent Agenda that "[a]lthough gigabit services and mobile broadband are becoming common .features of wealthier, metropolitan areas, they ruˇen't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an in1portant tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommmlications Association filed a petition tor reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline tor filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate L..ifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Earl Blumenauer has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could mn afoul of this legal fran1ework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. FEDERAL COMMUN!CATlONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Judy Chu U.S. House ofRepresentatives 2423 Rayburn House Office Building Washington, D.C. Dear Congresswoman Chu: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' pmticipation in the Lifeline program. I appreciate your views, which wili be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key ban1er to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadbm1d are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline progran1 is an important tool ąor helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers pmticipating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregmˇded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition ąor reconsideration pointing out that several of the providers never complied with their obligation under om rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing conm1ents-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Judy Chu has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is tmlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal fran1ework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wastefl.ll and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program--does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover aU states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. FEDERAL COMMUN!CATlONS COMMISSION WASHINGTON OFFICE OF THE CHA.IRMAN The Honorable David Cicilline U.S. House ofRepresentatives 2244 Rayburn House Office Building Washington, D.C. Dear Congressman Cicilline: March 22,2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key batTier to digital opportunity. Last September, I explained when announcing my Digital Empowem1ent Agenda that '"[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several importru1t points. First, the Order affected only nine of the more than 900 carriers pruticipating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregruˇded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chru1ce to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable David Cicilline has long been the case. State regulatory agencies have a substantial legal chal.lenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers ifthe courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in totaL The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program--does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to Ame1ican consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. 1 Sincerely, ~ ,_ ˇ-~ v~ Wv , u'l u Ajit V. Pai , FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Emanuel Cleaver U.S. House of Representatives 2335 Rayburn House Office Building Washington, D.C. Dear Congressman Cleaver: March 22,2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline progran1 is an impmiant tool for helping to connect all Americans. Regarding the Order, I would make several importar1t points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline progran1-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied \vith their obligation under our mles to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly grar1ted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state govemments, as Page 2-The Honorable Emanuel Cleaver has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawfUl, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the comis ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fiˇaud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verifY eligibility to participate in the Lifeline program--does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFiCE OF THE CHAIRMAN The Honorable John Conyers U.S. House ofRepresentatives 2426 Rayburn House Office Building Washington, D.C. Dear Congressman Conyers: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital oppmtunity. Last September, I explained when announcing my Digital Empowennent Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers pmticipating in the Lifeline progrmn-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight ofthe nine affected carriers had no Lifeline customers. Third, the prior Conunission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chm1ce to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state govemments, as Page 2-The Honorable John Conyers has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the comts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had ovenidden such safeguards 4,291,647 times in totaL The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program--does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know ifl can be of any fmther assistance. ~- Sincerely, 0 , .. ck: v. ~I.Vv Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION VI/ ASH! NGTON OFFICE OF THE CHAIRMAN The Honorable Eliot L Engel U.S. House ofRepresentatives 2462 Rayburn House Office Building Washington, D.C. Dear Congressman Engel: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline progran1. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key baJ.Tier to digital opportunity. Last September, I explained when announcing my Digital Empowennent Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 caniers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband caniers by state commissions; that process proceeds apace. Second, eight of the nine affected earners had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public conm1ent deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Eliot L. Engel has long been the case. State regulato1y agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in totaL The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and v.rill not start operating until the end of2017. Fmiher, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance. FEDERAL COMMUNICATIONS COMMlSS!ON WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Elizabeth Esty U.S. House of Representatives 221 Carmon House Office Building Washington, D.C. Dear Congresswoman Esty: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unafiordability as a key barrier to digital oppmtunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our mles to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted piior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Elizabeth Esty has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Commmlications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could rm1 afoul of this legal f]:amework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fi.ˇaud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had ovenidden such safeguards 4,291,647 tin1es in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michlgan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not cunently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states unti12019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in tills matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAiRMAN The Honorable Dwight Evans U.S. House ofRepresentatives 1105 Longwmth House Office Building Washington, D.C. Dear Congressman Evans: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. i\.nd I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our cotmtry, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 caniers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband caniers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with thei1: obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Dwight Evans has long been the case. State regulatory agencies have a substantial legal challenge to the entire process ofthe FCC designating Lifeline Broadband Providers, arguing that it is unlawiul, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for pt.rrposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in ce1tification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawfuL Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity ofwould-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in totaL The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state ofMichigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states tmtil2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know ifi can be of any further assistance. Sincerely, AjitV. Pai FEDERAL COMMUN!CATJONS COMMISSION WASHJNGTON OFFICE OF THE CHAIRMAN The Honorable Alcee L. Hastings U.S. House of Representatives 2353 Rayburn House Office Building Washington, D.C. Dear Congressman Hastings: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barlier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]Ithough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universaL" There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to com1ect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied Vvith their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Alcee L. Hastings has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the comis ultimately deem the process unlawfuL Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline progran1-does not currently exist and will not start operating until the end of2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance. Sincerely, ~ ~ ˇ~ =v Vˇ CVv uv ( Ajit V. Pai ˇ FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Hakeem Jeffries U.S. House ofRepresentatives 1607 Longworth House Office Building Washington, D.C. Dear Congressman Jeffries: March 22, 2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't universal." There is a real digital divide in our cmmtry, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all An1ericans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Hakeem Jeffries has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unla~ful, and the FCC itself recently asked the comt for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for pmposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could nm afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of2017. Fmiher, it is not scheduled to cover all states unti12019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consmners who most need the help. I appreciate your interest in this matter. Please let me know ifi can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Robin Kelly U.S. House ofRepresentatives 1239 Longworth House Office Building Washington, D.C. Dear Congresswoman Kelly: March 22,2017 Thank you for your letter regarding the Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key batTier to digital opportunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitm1 areas, they aren't universal." There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an impmiant tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers participating in the Lifeline progrmn-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chm1ce to weigh in on the designation. This curtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Robin Kelly has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unlawful, and the FCC itself recently asked the court for additional time to consider this issue. For instance, Section 214 of the Communications Act explicitly says that states must make designations for purposes of allowing companies to receive Lifeline subsidies. The FCC has repeatedly, and for many years, recognized states' primary role in this area. By preempting the states' role in certification, the federal designations could run afoul of this legal framework. Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and avoids potentially stranding customers if the courts ultimately deem the process unlawful. Lastly, every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. But our federal safeguards are insufficient: My investigation last year into these matters revealed that providers could indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had oveiTidden such safeguards 4,291,64 7 times in total. The investigation also uncovered other loopholes, including one that let a company claim subsidies for approximately 22,000 phantom subscribers each month in the state of Michigan. And the National Verifier-a new database intended to verify eligibility to participate in the Lifeline program-does not currently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover all states until 2019. We need to make sure that safeguards are strong and effective in order to direct subsidies to American consumers who most need the help. I appreciate your interest in this matter. Please let me know ifi can be of any further assistance. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE. OF THE CHAIRMAN The Honorable Carolyn B. Maloney U.S. House of Representatives 2308 Rayburn House Office Building Washington, D.C. Dear Congresswoman Maloney: March 22, 2017 Thank you for your letter regarding t!te Wireline Competition Bureau's Order on Reconsideration, which affected nine companies' participation in the Lifeline program. I appreciate your views, which will be entered into the record of the proceeding. One of my main goals as FCC Chairman is closing the digital divide. And I recognize unaffordability as a key barrier to digital oppmtunity. Last September, I explained when announcing my Digital Empowerment Agenda that "[ a]lthough gigabit services and mobile broadband are becoming common features of wealthier, metropolitan areas, they aren't tmiversaL" There is a real digital divide in our country, and as we seek to address this problem, I believe the Lifeline program is an important tool for helping to connect all Americans. Regarding the Order, I would make several important points. First, the Order affected only nine of the more than 900 carriers pmticipating in the Lifeline program-that's less than 1%. Nor did the Order affect the designation of Lifeline broadband carriers by state commissions; that process proceeds apace. Second, eight of the nine affected carriers had no Lifeline customers. Third, the prior Commission disregarded the well-established process for approving applications like these. The National Tribal Telecommunications Association filed a petition for reconsideration pointing out that several of the providers never complied with their obligation under our rules to coordinate their applications with Tribes. These Tribal representatives thus requested that the designations be reversed. Moreover, two providers' designations were improperly granted prior to the public comment deadline for filing comments-that is, before the public even had a full and fair chance to weigh in on the designation. This cmtailed the public's ability to participate in these proceedings and limited the Commission's ability to consider all designation criteria with a fulsome record. Whatever one thinks of the merits of these applications, that action was plainly improper. Fourth, there is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as Page 2-The Honorable Carolyn B. Maloney has long been the case. State regulatory agencies have a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that it is unla'A