The Universal Service Fund should be revised and the FCC should consider requiring contributions from tech companies, said a bipartisan group of current and former commissioners on a virtual panel Wednesday hosted by the Multicultural Media, Telecom and Internet Council. The group, including former Chairs William Kennard and Richard Wiley, also discussed the lack of an FCC majority, the digital divide and media ownership.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
NARUC should press states and the federal government to lower barriers, including through increased funding and awareness campaigns, to enrollment in the affordable connectivity program, Telecom Committee member Crystal Rhoades said in an interview Thursday. The Nebraska Public Service Commission’s lone Democrat said she doesn’t expect controversy over her proposed resolution, which is up for vote at NARUC’s July 17-20 policy summit in San Diego (see 2207060037). However, Next Century Cities Senior Policy Counsel Ryan Johnston raised concerns that the draft omits local governments’ key role in raising awareness.
Alaska’s attorney general disagreed with CTIA seeking no major changes to Alaska USF. The AG’s Regulatory Affairs and Public Advocacy Section (RAPA) supported -- while CTIA opposed -- switching to a connections-based contribution method, in comments last month at the Regulatory Commission of Alaska (see 2206140074). CTIA’s suggestion that the RCA sunset AUSF rather than repurpose it for broadband “is counter to the long-standing federal and state communications policy goals of universal service,” RAPA replied Tuesday in docket R-21-001. RCA hasn’t found “that preservation of universal service is no longer accomplished through the AUSF” or that the fund “no longer promotes the efficiency, availability, and affordability of universal telephone service in Alaska,” it said. CTIA sees “broad opposition” to repurposing AUSF for broadband, said the wireless association. Incoming federal funding from the Infrastructure Investment and Jobs Act is “extremely relevant” to RCA’s consideration and “weighs strongly against taking action at this time.” GCI supports continuing a limited state fund, it said. “AUSF support for broadband is illegal under Alaska law and not supported by good policy,” as would be including broadband in the contribution base, said the carrier: GCI would be OK with shifting to a connections-based method or keeping the current revenue-based surcharge. Alaska Communications supported “many aspects of RAPA’s proposal, in that it would refocus support to areas with the greatest need.” The company doesn’t agree “the RCA should require AUSF recipients serving both high and low density areas to meet generalized service metrics to show they have used support for the purposes intended,” it said. Adopting RAPA’s plan to assess broadband connections “would be inviting possible future invalidation of part or all of the AUSF program either through a direct legal challenge to the Commission’s regulations or indirectly through other state or federal litigation,” warned the Matanuska Telecom Association. The Alaska Remote Carrier Coalition urged the RCA to adopt connections-based contribution and focus subsidies on remote areas not connected by roads.
The FCC should consider requiring "large edge companies" to contribute to the Universal Service Fund, Joan Marsh, AT&T executive vice president-federal regulatory relations, blogged Friday. "If we want the USF to have a strong broadband future, it's time to ask these entities to contribute to the support of our collective universal broadband goals, Marsh wrote, saying the FCC shouldn't stop at including only broadband internet access service providers. Marsh said the FCC's recent announcement that the USF Q3 contribution factor will be 33% is a "dramatic increase" from the previous quarter and the factor will continue to grow as revenue declines (see 2206100058).
The Supreme Court appeared to raise questions about the future of the Chevron doctrine Wednesday, under which agencies like the FCC and FTC are afforded deference by the courts in their decisions as expert agencies. The unanimous court ruled in American Hospital Assn. v. Becerra that the Department of Health and Human Service’s decision to reduce yearly Medicare payments to hospitals as part of the 340B program was unlawful. The government raised Chevron deference, but the decision by Justice Brett Kavanaugh never addresses the doctrine. The case had been decided by the U.S. Court of Appeals for the D.C. Circuit.
House Communications Subcommittee leaders said Wednesday they’re eyeing combining the Extending America’s Spectrum Auction Leadership Act (HR-7783) and revised versions of the Simplifying Management, Reallocation and Transfer of Spectrum Act (HR-5486) and Spectrum Innovation Act (HR-7624) before a full Commerce Committee vote. The subpanel unanimously advanced HR-5486, HR-7624, HR-7783 and four other telecom bills Wednesday, as expected (see 2206140077).
The House Communications Subcommittee will mark up the Extending America’s Spectrum Auction Leadership Act (HR-7783), a significantly modified version of the Simplifying Management, Reallocation and Transfer of Spectrum Act (HR-5486) and five other telecom bills Wednesday, as expected (see 2206100001), the Commerce Committee said Monday. The markup includes a revised version of the Spectrum Innovation Act (HR-7624) that proposes to use proceeds from the 3.1-3.45 GHz auction it authorizes to pay for next-generation 911 tech upgrades and additional money for the FCC’s Secure and Trusted Communications Networks Reimbursement Program to repay U.S. carriers for removing from their networks equipment made by companies deemed a national security risk.
Verizon asked the FCC to "defer consideration of any new high cost support" until funding from the new federal broadband programs have been "fully awarded," in a meeting with Wireline Bureau and Office of Economics and Analytics staff. The FCC can then identify unserved areas to "assess whether new high cost support is needed," Verizon said, per an ex parte posted Monday in docket 21-476. It also asked the FCC to seek additional funding for the affordable connectivity program and emphasize the Lifeline program's "distinct and important role" in its report to Congress on the future of the Universal Service Fund. Verizon backed expanding USF's contribution base "absent direct appropriations" by including "the most significant enterprises operating within the broader internet economy" (see 2203180062).
Minnesota’s attorney general supported revisiting LTD Broadband’s eligible telecom carrier (ETC) designation. So did some local governments and consumer and municipal broadband advocates, in comments due Wednesday in docket M-21-133 at the Minnesota Public Utilities Commission. LTD urged the PUC to reject the request by Minnesota Telecom Alliance (MTA) and Minnesota Rural Electric Association (MREA) to revoke the Rural Digital Opportunity Fund (RDOF) winner’s ETC status (see 2205170058).
Local officials and E-rate groups asked the FCC to heed calls to abandon its proposed centralized online competitive bidding portal for the program, said reply comments in docket 21-455 (see 2204280051). Many said the record showed such a change would hurt smaller E-rate participants and remains unnecessary. Some advocated for updates to the Universal Service Administrative Co.'s training and how it shares information with participants.