The FCC upheld an earlier order to Blanca Telephone to re-pay more than $6.7 million in Universal Service Fund money. The USF supports the deployment of communications networks in high-cost, rural areas.
As a rate-of-return incumbent local exchange carrier (incumbent LEC), Blanca is eligible to receive high-cost support based on the costs it incurred in providing rate-regulated local exchange telephone service in its designated study area.
From 2005 to 2010, however, Blanca sought universal service money for those costs and also for providing non-regulated commercial mobile radio service (CMRS) both within and outside its study area.
In 2012, the National Exchange Carrier Association (NECA) discovered Blanca improperly included the CMRS expenses in its rate base of nonregulated costs and directed the company to correct its cost accounting. In 2016, the FCC’s Office of the Managing Director (OMD) demanded that Blanca repay $6,748,280 in high-cost USF to which it was not entitled covering the years between 2005 and 2010.
Blanca appealed and the FCC upheld the order. The agency rejected Blanca’s arguments that the Commission does not have authority to seek repayment of improperly disbursed USF money. Then, Blanca sought to have the original decision overturned.
In 2018, the FCC told Blanca it would start recouping the money from Blanca’s monthly universal service support until the debt was paid or Blanca “made acceptable arrangements for its satisfaction,” according to the decision. Blanca fought that, too.
In the latest order, the FCC again tells Blanca it has to repay the money and rejected the telecom’s requests not to start shrinking its USF support. The full Commission directed the agency staff to, “pursue collection of that amount from Blanca, whether by offset, recoupment, referral of the debt to the United States Department of Treasury for further collection efforts, or by any other means authorized by law.”