Oklahoma adopted a connections-based contribution method for state USF on an interim basis Thursday. The Oklahoma Corporation Commission voted 2-0, with a concerned third commissioner abstaining, for a proposed order to replace the 6.28% revenue-based monthly fee with a $1.14 per connection surcharge. In Texas, state senators are pushing Gov. Greg Abbott (R) and the Public Utility Commission to act before rates spike for rural customers. Alaska, California and Oregon are mulling changes.
The Q4 USF contribution factor will “plummet” to 28.5% from 31.8% during Q3, analyst Billy Jack Gregg emailed Tuesday. Universal Service Administrative Co. projected USF-applicable telecom revenue will drop $188.9 million to $2.12 billion in Q4, with quarterly demand decreasing due to “major reductions” in demand for high-cost and low-income funds. Despite the decrease, projected demand for 2021 is the “largest annual demand on the USF since 2012” at $9.3 billion, he noted. Projected USF revenue for 2021 will be $9.66 billion, Gregg said.
Provisions in the $65 billion broadband title in a developing infrastructure spending package weren't completely finalized Thursday, a day after the Senate cleared an initial test cloture vote 67-32 on proceeding to a shell bill (HR-3684). A bipartisan group of senators agreed Wednesday on the outlines of the package (see 2107280065). The Senate will vote Friday on the motion to proceed to HR-3684. Telecom-focused senators in both parties told us through Thursday that the thorniest broadband issue -- the extent of pricing transparency and digital redlining language -- remained in flux.
House Commerce Committee Republicans released Wednesday 32 discussion drafts aimed at holding “Big Tech accountable by improving transparency and content moderation accountability, reforming” Communications Decency Act Section 230, “promoting competition, and preventing illegal and harmful activity.” Committee Republicans want “Big Tech to be transparent, uphold American values for free speech, and stop their abuse of power that is harming our children,” said ranking member Cathy McMorris Rodgers of Washington. The drafts include one from McMorris Rodgers and House Judiciary Committee ranking member Jim Jordan, R-Ohio, to amend Section 230 to “remove liability protections for companies who censor constitutionally protected speech on their platforms, require appeals processes, and transparency for content enforcement decisions.” Jordan in June previewed plans for the legislation in response to House Judiciary advancement of Big Tech competition measures he saw as a bid at pursuing “radical” antitrust policy (see 2106240071). House Communications Subcommittee ranking member Bob Latta, R-Ohio, proposes amending 230 “to remove liability protections from companies that act as Bad Samaritans and knowingly promote, solicit, or facilitate illegal activity.” Former House Commerce Chairman Fred Upton, R-Mich., seeks to remove liability protections for actions the FTC takes against a company. Rep. Dan Crenshaw, R-Texas, proposes barring companies from blocking or preventing access to lawful content, along with degrading or impairing access. Rep. Billy Long, R-Mo., wants to require companies disclose how they develop their content moderation policies. Additional content moderation measures target revenge porn, child porn and doxxing. A bid by Rep. Markwayne Mullin of Oklahoma would require edge providers contribute to USF. Senate Commerce Committee ranking member Roger Wicker of Mississippi and other committee Republicans propose the FCC explore such a requirement (see 2107210067).
The FCC Wireline Bureau announced counties with conditional forbearance for eligible telecom carriers receiving high-cost USF support, effective Sept. 21, from the obligation to offer Lifeline-supported voice services. Friday’s public notice doesn't apply to Lifeline-only ETCs.
Senate Commerce Committee ranking member Roger Wicker, R-Miss., and Sens. Shelley Moore Capito, R-W.Va., and Todd Young, R-Ind., filed the Funding Affordable Internet with Reliable (Fair) Contributions Act Wednesday to explore requiring “Big Tech” companies to contribute to USF. It would direct the FCC to study “the feasibility of funding Universal Service Fund through contributions supplied by edge providers” like Google-owned YouTube and Netflix. The study should examine “the class of firms and services on which contributions could be assessed, including an inquiry into the specific sources of revenue potentially subject to contributions, such as digital advertising revenue and user fees” and USF contribution “equity issues.” The bill wants the FCC to examine equity of “alternative contributions systems” like federal appropriations and “whether a flat or progressive rate is most appropriate.” More “consumers are moving to internet-based services,” which “raises concerns about the sustainability of fees collected from consumers’ telephone bills,” Wicker said. “As online platforms continue to dominate the internet landscape, we should consider the feasibility of Big Tech contributing to the USF to ensure rural areas are not left behind as we work to close the digital divide.” Commissioner Brendan Carr, who proposed making edge providers pay into USF (see 2105240037), said “requiring Big Tech to contribute is more than fair.”
Oklahoma could soon join a small and growing list of states adopting USF connections-based contributions. In Oregon, parties are discussing other rule changes, and in Texas, small rural LECs are taking the Public Utility Commission to court for not fully funding USF. Other states mulling changes include California and Kentucky.
The FCC and Universal Service Administrative Co. should seek additional funding to extend the emergency broadband benefit program “for as long as necessary,” or at least until Lifeline reimbursement is increased, said a draft resolution to be considered by NARUC during its July 18-21 meeting. The draft recommends Congress phase out the program’s bypass of the state eligible telecom carrier designation process and the FCC address problems with enrolling eligible households through the national verifier. The draft also seeks Lifeline revisions. Also under consideration is a broadband expansion task force recommendation to prioritize areas with less than 25 Mbps download and 3 Mbps up (see 2106250048). It more participation in NTIA initiatives and the Federal-State Joint Board on Universal Service. It recommends a “centralized database of carriers” that don't meet USF obligations, and regularly testing network speed, latency and reliability for carriers receiving federal or state funding. NARUC will consider whether to urge the FCC to make the EBB program more permanent, as well as a resolution backing the California Public Utilities Commission’s petition to reconsider the confidentiality of filings in the network outage and disaster information reporting systems. NARUC’s telecom panel unanimously supported the CPUC's petition in November (see 2011100033). The FCC didn’t comment Wednesday.
The House Appropriations Committee voted 33-24 Tuesday to advance its FY 2022 funding bill for the FCC and FTC. The measure proposes giving the FCC $388 million and the FTC almost $390 million, mirroring what President Joe Biden proposed in late May (see 2105280055). A report on the legislation seeks further work on changes to USF contribution rules and wants additional study of how municipal broadband can expand connectivity access (see 2106290066). The committee approved an amendment to the bill from Rep. Chris Stewart, R-Utah, that would bar funding for government cloud computing unless the cloud services don't store or transmit images depicting violations of child exploitation law.
The House Appropriations Committee’s proposed report on the Financial Services Subcommittee-cleared measure to fund the FCC and FTC in FY 2022 seeks further work on changes to USF contribution rules and wants additional study of how municipal broadband can expand connectivity access. The committee was still considering the underlying bill late Tuesday afternoon. Dueling panels of telecom policy officials disagreed on how lawmakers should translate into legislation the $65 billion broadband component in a bipartisan infrastructure package framework President Joe Biden endorsed last week (see 2106240070).