NARUC, NASUCA Officials Wait for Answers on USF Amid Transition

State regulators will closely watch USF court cases, said Schram, a Republican member of the Nebraska Public Service Commission. At its meeting, NARUC passed a resolution authorizing the organization to defend the federal program’s surcharge mechanism through an upcoming amicus brief in Consumers' Research v. FCC at the U.S. Supreme Court (see 2411120014). In July, the 5th U.S. Circuit Court of Appeals ruled in that case that the funding mechanism for federal USF is unconstitutional. The Supreme Court said Nov. 22 it will take up the case (see 2411220050).

“We’ll see what decision the court renders and how Congress may respond,” said Schram. “There has to be a sustainable path in these high-cost areas. We’re seeing unprecedented investment by both the public and private sectors to deploy these broadband networks, but we've got to think about down the road how we're going to sustain, operate and maintain those networks.”

Schram said he hopes the Federal-State Joint Board on Universal Service will be involved in any future USF work. Some NARUC members have complained about a lack of activity at the joint board, which convenes state and FCC commissioners, under the Biden and previous Trump administrations (see 2407110015). The joint board’s first task should be finding “common ground” between state and federal governments and prioritizing "what the issues are.”

Schram supported expanding the USF contribution base. “It’s no secret [that] for years, USF has been on the back of voice consumers, [but] we’ve gone well beyond voice trying to build advanced networks that have benefited many more than just voice customers.” The commissioner said Big Tech companies are among those that benefit and should contribute to the fund. “The networks they’re riding on are being built by public and private investment.”

Some leading Republicans have criticized the BEAD program, including the next FCC Chairman Brendan Carr and Sen. Ted Cruz (R), who is poised to chair the Senate Commerce Committee next year (see 2411140058). However, Schram noted that most state broadband offices are “quite a ways along,” including some that have or soon will open application windows. “If there's going to be a decision on [BEAD’s] direction … it's going to have to come early in the next Congress.”

Also, Schram predicted significant lobbying to resurrect the affordable connectivity program (ACP) next year. However, he said he isn’t sure if the House will have enough votes.

‘Up in the Air’

Great uncertainty exists for state consumer advocates in the year ahead, NASUCA Telecom Committee Chair Regina Costa told us.

Advocates have a “wait and see” attitude to the incoming Trump administration, said Jeff Waller, a committee member from Alaska. “You can always assume the worst. Sometimes you’re right and sometimes you’re wrong.” Many consumer issues are bipartisan, including affordability, 911 and stopping illegal robocalls and texts, noted Michel Singer Nelson, a member from Colorado.

One big question is what happens to the FCC’s Title II reclassification decision, which is before the 6th Circuit. “We don’t know what’s going to happen with that … and that’s a very fundamental issue going forward” because it will determine if the government treats broadband as an essential service, Costa said. “So you add to that the Consumers’ Research lawsuit -- we have no idea what the Supreme Court is going to say about that.” Federal USF has been around for decades to great success, she noted.

“There are a lot of things here that are up in the air,” agreed Waller, who represents NASUCA on the Universal Service Administrative Co. (USAC). Waller said he hopes that even if SCOTUS agrees with the 5th Circuit, the government will respond by figuring out a way to make USF work. One of the biggest complaints Waller hears is that the USF surcharge is too high, he said. Making voice pay for broadband is like “assessing chicken coops to pay for the feed lots.”

There’s “widespread recognition that you can’t keep funding broadband service and data services with a surcharge that’s solely supported by voice,” said Costa. While the Telecom Committee chair is skeptical that the FCC will take it up, Costa doesn’t support having Congress funding USF with appropriations, which could fluctuate from year to year, she said. “You want that certainty.”

People have long recommended expanding the contribution base to broadband, said Nelson. “It’s used for broadband services. Why shouldn’t the broadband providers also contribute to it?” If a legislative change is needed to make that happen, Congress should act, she said.

NASUCA hopes for progress on ACP, which should be bipartisan, said Costa. “Every single state in the country has people who rely on that program.” Since the election is over, the hope is “people won’t need to position themselves to go at loggerheads on issues like this.” The program might be renamed or “re-flavored” to avoid political baggage, but that’s not what’s important, said Waller. “Hopefully, something gets in.”

Similarly, for BEAD, state consumer advocates “hope that the people who’ve been critical of it have constructive suggestions about how to improve it … because it is an essential program,” said Costa. “Just tossing it is not really a solution.”