Communications industry executives and former federal officials said during a Practising Law Institute event Tuesday they see a likely GOP-led budget reconciliation package next year as a potential vehicle for legislation that would reinstate the FCC’s lapsed spectrum auction authority. House Commerce Committee leaders and Senate Commerce Committee Chair Maria Cantwell, D-Wash., have repeatedly attempted to reinstate the authority during this Congress only to have their efforts stall (see 2409170066).
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.
A possible shakeup of the federal Universal Service Fund (USF) will be top of mind for state telecom regulators in the year ahead, NARUC Telecom Committee Chair Tim Schram said in an interview earlier this month at the association’s Anaheim meeting. USF is one of several areas of uncertainty in 2025, said three state consumer advocates in a separate interview at the collocated National Association of State Utility Consumer Advocates (NASUCA) conference.
The extent to which the U.S. Supreme Court decides the USF challenge on theoretical rather than practical grounds could have major implications for whether the court issues a decision that overturns the program's funding mechanism. The court said last week it will hear a challenge to the 5th U.S. Circuit Court of Appeals' 9-7 en banc decision, which found the USF contribution factor is a "misbegotten tax.” Consumers' Research challenged the contribution factor in the 5th Circuit and other courts.
A plan for cutting regulations and federal institutions such as the FCC could target broadband access programs and media regulations, but it's likely that a wave of litigation will stymie it, administrative law professors and attorneys told us. Future Department of Government Efficiency (DOGE) heads Vivek Ramasawamy and Space X CEO Elon Musk laid out their plans in a Wall Street Journal opinion column. “It's not to say that maybe some of these changes shouldn't be happening, but, you know, they're taking a wrecking ball to fix something that requires a little bit more finesse than that,” said University of Idaho law professor Linda Jellum. Asked about possible DOGE cuts at the FCC, incoming FCC Chairman Brendan Carr last week told reporters, “There's no question, there's tons of room for driving more efficiency at the FCC." He didn't elaborate.
T-Mobile asked that the FCC direct the Universal Service Administrative Co. to make Q-Link Wireless reimburse it for money it owes for using the T-Mobile network. Q-Link Wireless CEO Issa Asad faces prison time and a fine of more than $100 million after pleading guilty to fraud tied to the FCC’s Lifeline program (see 2410160029). Q-Link is required to provide restitution to the commission for Lifeline fraud, but there is no provision to compensate T-Mobile for unpaid bills, said a filing posted Friday in docket 09-197. “Q LINK has been able to retain over $500 million of USF support without fully compensating T-Mobile for the services it provided to Q LINK and indirectly to consumers,” the carrier said. “Re-directing the funds to T-Mobile would simply allow it to receive the Federal benefits for the service that it ultimately provided during the term of its agreement with Q LINK and for the services that it continues to provide to Q LINK’s Lifeline program customers,” T-Mobile said.
ANAHEIM, Calif. -- The NARUC Telecom Committee on Monday cleared draft resolutions on phone number conservation, the Universal Service Fund and utility coordination on broadband deployment. A USF panel that day described how reform could happen with Republicans controlling the FCC and Congress next year. Also, the affordable connectivity program (ACP) could return in 2025 despite Washington’s partisan climate, said Sanford Williams, deputy chief of staff for FCC Chairwoman Jessica Rosenworcel, during a collocated National Association of State Utility Consumer Advocates (NASUCA) meeting. State utility regulators are holding their annual meeting here this week.
The Nebraska Public Service Commission sought additional feedback on Nebraska Universal Service Fund (NUSF) distribution (docket NUSF-139). Commissioners voted 5-0 at their livestreamed session Tuesday to approve an order seeking comments by Nov. 25 and schedule a hearing for Dec. 4 at 10 a.m. CST. The commission hopes to “further refine” a proposed mechanism for distributing high-cost support next year, the order said. The PSC considers the 2025 support mechanism “transitional” as it moves through remaining issues in the docket. “The Commission emphasizes that more work will need to be done to transition the high-cost distribution support mechanism to account for federal and state infrastructure programs, the sustainability of broadband networks, and to ensure that the affordability goals of the NUSF Act will be met.” Under the PSC proposal, released for comment, the commission would keep providing high-cost support to wireline ILECs offering 100 Mbps download and 20 Mbps upload speeds in areas without wireline competitors providing service at that speed. It would also continue supporting ILECs offering 25/3 Mbps speeds, provided it’s in a location that’s “subject to a federally enforceable commitment to provide service at speeds of at least 100/20 Mbps” and that lacks wireline competitors with 25/3 Mbps speeds.
Rural and high-cost areas throughout Alaska remain "some of the hardest and most costly to serve in the country," the FCC acknowledged in a Monday order establishing the Alaska Connect Fund (ACF), complementing the 2016 Alaska Plan (see 2410150048). The order will take effect 30 days after Federal Register publication. Also adopted on Monday was a Further NPRM seeking comment on implementation of the fund.
U.S. Supreme Court justices Monday appeared divided on telecom industry arguments that reimbursement requests submitted to the Universal Service Administrative Co.-administered E-rate program can’t be considered “claims” under the False Claims Act (FCA). Justices peppered lawyers for both sides with questions during oral argument as they heard Wisconsin Bell v. U.S., a case from the 7th U.S. Circuit Appeals Court (see 2410070047).
The outcome of Tuesday's Senate elections could scramble Senate Commerce Committee Republicans’ leadership structure given the competitive contest between ranking member Ted Cruz, R-Texas, and Rep. Colin Allred, his Democratic challenger. Four other panel members also face tough or competitive reelection fights (see 2411040051). Democratic leaders on the House and Senate Commerce committees indicated they intend to stay in those roles in the upcoming 119th Congress regardless of the election’s outcome.