Pro-Appropriations USF Revamp Possible When Cruz Gets Senate Commerce Gavel
Senate Commerce Committee ranking member Ted Cruz, R-Texas, could shift the direction Congress’ USF revamp takes when he becomes the panel’s chairman in January, lawmakers and lobbyists told us. Observers believe his impact on what Congress decides will partially depend on how the U.S. Supreme Court rules when it reviews the FCC appeal of the 5th U.S. Circuit Court of Appeals' ruling in favor of Consumers' Research's challenge of the USF contribution methodology (see 2411220050). A high court ruling upholding the 5th Circuit could shift momentum in favor of Cruz’s proposal that Congress make USF funding part of the appropriations process, officials said.
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Cruz for now is remaining tight-lipped about his plans for shaping a USF revamp. “We will assess all these issues in the new Congress,” he told us in a brief November interview. Cruz said in March he supported Congress reining in the FCC’s autonomy on USF spending and called a proposal expanding the contribution pool effectively a “tax on the working class” (see 2403060090). Republican FCC Commissioner Brendan Carr, President-elect Donald Trump's pick to become agency chairman, has long favored making edge providers pay into USF (see 2105240037).
Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., who co-formed a bicameral working group in 2023 on USF revamp recommendations (see 2305110066), told us he’s hoping the conclave will issue USF recommendations before year’s end. He acknowledged Cruz, as Senate Commerce chairman, would have a bigger role in shaping legislation in 2025. Cruz “is knowledgeable in these spaces, and I’m willing to work with anyone” on a USF fix, Lujan said. Cruz’s office didn’t respond to follow-up questions about how or if the lawmaker would consider the group’s recommendations.
The USF group's proposals “should be considered and looked at” because Republicans will need some Democratic votes for a legislative deal that can clear the Senate’s cloture threshold, Lujan said. Some of the group’s proposals were featured in an amendment Lujan and other senators attempted to attach to the FAA reauthorization law in May that would have altered the FCC’s lapsed affordable connectivity program (see 2405080047).
House Communications Subcommittee Chairman Bob Latta of Ohio and Health Subcommittee Chairman Brett Guthrie of Kentucky, Republicans seeking to lead the Commerce Committee in the next Congress, separately indicated they’re open-minded about a USF revamp’s contours. Latta, a working group member, said he’s “looking forward to seeing all the proposals that are on the table. Hopefully, we can get this stuff done” once Republicans have full control. Guthrie emphasized “it’s important that [USF] remain viable,” so he’s willing to consider any recommendations.
'More Uncertainty'
Sen. Shelley Moore Capito, R-W.Va., a member of Senate Commerce and the USF working group, told us there could be “ways to use” Congress’ appropriations process to address the connectivity program that “would be beneficial,” but she needed to hear more about Cruz’s proposal. Sen. Jerry Moran of Kansas, another Senate Commerce Republican and member of the USF group, said Cruz has “been supportive of our efforts, and we’ve made a good starting point” that will guide an overhaul in the next Congress.
House Communications ranking member Doris Matsui of California, a working group member, and other Democrats aren’t enthusiastic about shifting USF to appropriations. “I don’t think we want to subject it to more uncertainty” and “we have so many things” that could be part of a revamp, Matsui told us. “It’s important to have a consistent source of funding,” said Senate Appropriations Financial Services Subcommittee Chairman Chris Van Hollen, D-Md. Modifying the system “is the better way to go” given Congress has been unable to appropriate more ACP money.
James Erwin, executive director-Americans for Tax Reform’s Digital Liberty, expects the upcoming SCOTUS review of the Consumers’ Research case will “pause all momentum toward any” USF revamp until the justices reach a decision. “It’s possible that there won’t be a clear ruling either way,” but a high court decision that USF’s funding mechanism is unconstitutional would mean “the only reasonable solution would probably be switching to appropriations,” he told us. There has been some momentum among Republicans for an appropriations approach, but Cruz would still “need some bipartisan buy-in” to ensure congressional passage.
Affordable Broadband Campaign Board Chair Greg Guice said Congress’ inaction on ACP stopgap funding demonstrates “the appropriations process is not well-suited for long-term investments that broadband providers make and then expect to see a return on.” It would be better for Congress to focus on requiring the FCC to strengthen USF requirements, Guice told us.
National Lifeline Association lawyer John Heitmann warned that “if appropriations is going to be part of the puzzle, we need to figure out how it works in a manner that” ensures affected customers don’t experience the kinds of additional charges that occurred when ACP funding lapsed earlier this year. Heitmann told us he also expects Carr will weigh in on what the FCC needs Congress to do to update current statute to authorize the commission to “expand the [contributions] base, if that’s our way forward.”