Watchdog Seeks FCC Probe of Pierce’s BDAC Involvement; Agency Downplays ex-Chair’s Role

“The FCC should immediately conduct an investigation into any advisory committee work” involving Pierce, said Project on Government Oversight General Counsel Scott Amey Wednesday. “The allegations raise serious concerns about [Pierce’s] ethical standards and obligations. While the allegations against Pierce involve her work in the private sector, the FCC should ensure that the agency's policies and mission were not compromised, and determine whether she violated the public trust for personal or private gain.”

“While the FCC takes the charges against Elizabeth Pierce very seriously, the BDAC Chair is not in a position [to] enact, on his or her own, any policy or proposal,” a commission spokesman emailed. He said it’s “structured as a large, diverse advisory panel meant to reach consensus on recommendations, which would first be voted on by the panel, and then forwarded for review by the FCC, as well as state [and] local government and industry.” The former BDAC chair didn’t lead any of the five working groups, though she was a member of the federal siting group that started work in early August, the spokesman said. Working groups developed goals, reviewed public comments and took preliminary steps toward making recommendations, he said. At Pierce’s final BDAC meeting in July, working groups delivered progress reports but no final recommendations, he said.

The commission was unaware of allegations against Pierce until announcement of her arrest, an FCC official said Friday on condition of not being named. In a Sept. 1 news release, the agency said the former Quintillion CEO resigned for “personal reasons.” Chairman Ajit Pai said then: “She did an excellent job leading the BDAC through its first two public meetings. I am sorry to see her go and wish her all the best in her future endeavors.”

Quintillion’s fiber project continues without Pierce. The Regulatory Commission of Alaska has no authority to oversee the company, an RCA spokeswoman said. “Because of federal preemption, the RCA does not regulate market entry or rates of Internet service providers. If it were an applicant seeking a certificate to operate as a public utility, we would apply Alaska Statutes 42.05.221-.281 and determine if the applicant is financially and managerially fit, willing, and able to provide service.”

‘Bad Optics’

“This incident only underscores the danger of placing such authority in corporate interests who place profits over public interest,” said Liccardo, the former BDAC member who resigned in protest because he claimed the committee served industry over the public interest (see 1801250049).

“For months, I have joined mayors across the country in expressing our shared concerns that the Trump Administration has allowed the [telecom] industry to dominate the FCC and the rule-making process,” Liccardo said. “Local governments must have a real voice if we’re going to develop a balanced framework that will accelerate broadband deployment, protect the interest of local taxpayers and help us close the digital divide.”

It’s unfair to attack BDAC over Pierce’s arrest, said member Brent Skorup of the Mercatus Center. “Pierce resigned fairly early in the BDAC’s formation and before voting had commenced on any of its recommendations.” Skorup wouldn’t be surprised “if a few advocates trumpet Ms. Pierce’s brief association with the BDAC … to undermine BDAC recommendations they dislike,” he said. The broadband committee acted in good faith, he said, with recommendations coming “from dozens of working group members with a variety of viewpoints who put in hundreds of pro bono hours into the recommendations.”

Investigating Pierce “is in good hands with the FBI,” said District of Columbia Public Service Commission Chairman Betty Ann Kane. BDAC membership is “ridiculously unbalanced,” but the Pierce matter doesn’t increase or reduce that concern, said Kane, who last summer sponsored a NARUC resolution seeking more state and local membership (see 1707180007). “It really doesn’t have anything to do with it,” though it is bad optics, she said. Kane said she’s more worried about the resignation of Commissioner Mignon Clyburn, a strong state-and-local advocate (see 1804170056).

Allegations against Pierce “don’t affect the importance of the Committee’s work or problems with the makeup of its membership,” emailed New York Public Service Commissioner Gregg Sayre, another sponsor of the NARUC resolution. “The Committee’s membership needs to be more appropriately balanced between industry and state and local governments and regulators.”

“It is very unfortunate that a single member has been charged with serious wrongdoing,” emailed former FCC and California Public Utilities Commissioner Rachelle Chong. “I don't think the alleged misdeeds of one member should cast any aspersions on the important work of other members and the group as a whole.” Reaching remote, rural and tribal lands with broadband is an “immense” challenge, she said. Broadband projects must scale to reach national goals, “and that's where a diverse set of providers need to be involved to find the best use cases for each area,” she said.

Pierce’s arrest probably has little impact for BDAC, said Tellus Venture Associates President Stephen Blum, a local government consultant who has criticized the group. “Most of the substantive work, such as it is, happened since Pierce resigned last September.” The news is “more bad optics for a body that has already gone from bad to worse in that respect, but that's not a problem that seems to bother the FCC chair,” Blum said.

BDAC isn’t “corrupt in the sense that CEO Pierce may have been corrupt,” said Christopher Mitchell, Institute for Local Self-Reliance director of Community Broadband Networks. The panel “is definitely corrupt in the sense that it has been stacked with people who are likely honorable but all generally agree that local governments should exist to subsidize their business models," he said. "That is a different type of corruption and ultimately more dangerous because it is so much harder to spot.”