Sullivan Hold Seen Likely to Delay, Not Derail, Carr's Senate Reconfirmation

“I have major concerns” with how the FCC handles RHC given it's negatively affecting Alaskans, Sullivan told us: “And I’m not going to remove” the hold on Carr “until I get a commitment from [Pai] and his team on a plan to fix” ongoing problems with the program. Sullivan noted the agency's inability to adequately resolve Alaska healthcare providers' 2017 applications. Those actions led at least six Alaska-based healthcare providers to opt out of next year's program cycle because “they don't know” if they will be correctly reimbursed, Sullivan said. The FCC isn't providing “stability” or “certainty” to Alaska.

Pai “has been telling me for eight months now” that he was “going to solve” the problems with RHC that have “affected literally thousands of Alaskans” who depend on the program's subsidies, Sullivan said. He cited a March meeting with the chairman on the issue and his focus on it during an August oversight hearing (see 1808160071). “I haven't heard a damn thing” from Pai, even in the weeks since the Senate Commerce hearing, that effectively addresses RHC's issues, Sullivan said. “I'm very frustrated.”

The FCC in recent months "has increased funding" for RHC by 43 percent (see 1806250042) and staffers "have spent countless hours of staff time -- including the Chairman’s time -- resolving issues relating to Alaska," a spokeswoman emailed. The RHC funding cap hike took effect in late June (see 1806280013). "Because of our efforts, one of the two major Alaska communications providers has received funding commitments," the FCC spokeswoman said. "We have also offered a fair resolution regarding problems concerning the second major provider -- problems of its own making. Unfortunately, that corporation is continuing to insist that the FCC give it millions of dollars no-questions-asked -- taxpayer money that the company is not eligible to receive under our rules. That we cannot and will not do.”

Thune acknowledged Sullivan's hold Thursday, telling us it would inevitably also delay Senate confirmation of Starks since the intent has long been to advance the two nominees as a pair. Sullivan and Sen. Lisa Murkowski, R-Alaska, “are both engaged” on the RHC issue, although Murkowski is unlikely to also place a hold on Carr, Thune said. “We're trying to work with them and their staffs to try and break that loose.” Senate Commerce Staff Director Nick Rossi told us the committee also is working with the FCC to facilitate a solution.

“I think if we can get an agreement with the Democrats, we'll be able to move them, but” the Sullivan hold “is something we're trying to work through” within the GOP caucus, Thune said. “It all comes down to when” a larger nomination package can come together “and when there's enough pressure on both sides to try to get a deal” to move nominees under unanimous consent, Thune told reporters Wednesday: “It's all up to” Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y.

There wasn't widespread knowledge of the Sullivan hold within the communications sector, with some officials and lobbyists expressing surprise that Pai would let Sullivan's concerns fester long enough to endanger Carr's reconfirmation. Lobbyists believe it would be relatively easy to alleviate Sullivan's concerns and break the hold. "That [Sullivan] went public” on the hold “probably means there's a real answer out there and he just wants that answer a little bit faster,” one telecom lobbyist said. “I think [Carr] will ultimately get through,” but the hold likely solidifies expectations that confirmation won't likely come until after the November election, another lobbyist said.

Former FCC officials and other industry lawyers said it’s unclear how quickly agency leadership might be able to iron out differences with Sullivan and thus lift the hold on Carr. “That’s between Pai and Sen. Sullivan,” said a lawyer who represents clients involved in the rural healthcare proceeding. “You’d think they’d be able to work something out pretty quickly.” Other lawyers noted that many nominations run into similar holds. Various groups and companies active in the proceeding declined to comment. "The hold is the result of an avoidable miscommunication or lack of attention between the Pai office and the Carr office" with Sullivan, said a former senior FCC official. "Holds coming from the same political party are almost always very serious matters."

“The FCC has made some significant improvements in policies to support [RHC], especially by increasing the funding for the program,” said Schools, Health & Libraries Broadband Coalition Executive Director John Windhausen. “Other policy issues, such as how to expedite the processing of applications, were raised in the SHLB Coalition's 2015 petition for rulemaking but have not yet been decided. These issues have been teed up for a decision and we believe the FCC could move quickly to resolve them, which would incentivize greater rural broadband deployment.”