With SCOTUS Review Pending, FCC Is Considering Record USF Contribution Factor
The FCC Office of Managing Director announced Thursday a proposed Q2 USF contribution factor of 36.6%, as calculated by the Universal Service Administrative Co. That’s up from 36.3% the previous quarter and the highest quarterly contribution factor in the program's history. Meanwhile, the U.S. Supreme Court will hear FCC v. Consumers’ Research March 26, a case about the contribution factor's legality.
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NTCA, the Competitive Carriers Association and USTelecom filed a reply brief at SCOTUS on Thursday defending the contribution factor and how USAC calculates it. “From the First Congress to today, Congress has regularly granted broad discretionary powers to the Executive to carry out federal objectives,” the brief said.
Section 254 of the Communications Act doesn’t “delegate legislative power to the Executive; instead, Congress took the universal-service subsidy long implicit in monopoly rate regulation and made the subsidy -- and Congress’ responsibility for it -- explicit while deregulating many aspects of the communications industry,” it added. Congress left the implementation details to the executive branch, “but to a lesser degree than under the prior regime,” the brief said: “That legislative change was a win for both consumers and nondelegation principles and has made the promise of broadband a reality for tens of millions of Americans.”
The carrier groups also defended USAC's role, saying the FCC didn’t delegate its executive authority to a private company. Instead, the commission "assigned ministerial tasks to a private entity that remains fully subordinate and subject to FCC oversight and control in the contribution-factor process, and whose actions have no legal effect unless and until the FCC determines and publishes the quarterly contribution factor.”
SCOTUS will consider challenges to the 5th U.S. Circuit Court of Appeals’ 9-7 en banc decision invalidating how the USF program is funded (see 2501090045). The National Federation of Independent Business’ Small Business Legal Center and numerous right-of-center groups filed in support of Consumers’ Research (see 2502190035).
The total contribution requirement for Q1 is $2.2 billion, of which just more than $1.1 billion supports the high-cost program. Next is the schools and libraries program ($653 million), Lifeline ($305 million) and the rural health care (RHC) program ($104 million). The Office of Managing Director proposes the contribution factor, and if the FCC does nothing more it’s deemed approved by the commission.
Questions remain as a result of unused RHC funds, analyst Billy Jack Gregg said in an email. “In the last three quarters the OMD has applied $157.3 million of unused funds as post-projection adjustments to reduce the USF assessment factor for those quarters,” he said.
The Wireline Bureau on Thursday extended the funding year 2025 application filing window for the RHC program until June 2. Applications were due April 1. “We take this action in response to multiple requests to extend the application filing deadline due to processing delays experienced by RHC program Applicants,” the bureau said.