Industry experts expect the FCC will petition the U.S. Supreme Court for a writ of certiori following the split rulings between the 5th U.S. Circuit Court of Appeals and the 6th and 11th circuits on the Universal Service Fund contribution mechanism, they said during a Schools, Health, Libraries & Broadband Coalition webinar Wednesday. The 5th Circuit sided with Consumers' Research in its challenge of the contribution mechanism and agreed to stay its ruling pending the commission's petition (see 2408270030).
Frontier Communications would no longer receive Arizona Universal Service Fund (AUSF) subsidies under a proposed settlement in a ratemaking docket at the Arizona Corporation Commission. Frontier and ACC staff filed the pact Friday in docket T-03214A-23-0250. Frontier is the only company in the state receiving this high-cost support. If the proposal is approved, Frontier will forgo collecting any further AUSF funding as well as about $104,000 it's currently owed. In addition, the agreement would adjust Frontier basic service rates that were last revised in 1989. It would designate certain basic telecom services as competitive and deregulate other tariffed intrastate telecom services. Frontier would offer the basic services through a price-cap rate structure. The agreement said "appropriate ACC oversight of Frontier's regulated services” will continue. In March, Arizona commissioners refused hiking monthly AUSF surcharges because they said they wanted to address the issue in the Frontier ratemaking docket.
Consumers' Research objected again to the FCC's proposed quarterly USF contribution factor for Q4 2024. The group said in comments posted Friday in docket 96-45 that the FCC should reject the proposed 35.8% contribution factor and let Congress "fund universal service via a standard tax appropriation." The group challenged the USF contribution mechanism in the 5th U.S. Circuit Court of Appeals, which granted a stay of its ruling in favor of Consumers' Research pending the FCC's petition for a writ of certiorari before the U.S. Supreme Court last month (see 2408270030).
Verizon faced tough cross-examination Friday as consumer advocates hammered the company’s petition for Connecticut deregulation. Paul Vasington, the carrier's senior director-regulatory and government affairs, said during a Public Utilities Regulatory Authority (PURA) virtual hearing that the market where the ILEC seeks deregulation has reached “full potential” competitively given many VoIP and wireless options. However, officials from the Connecticut Office of Consumer Counsel (OCC) questioned whether Verizon competitors offer services that are the functional equivalent of landlines.
A total of 68% of NTCA members said in a recent survey they would need to cancel deployment projects next year, equaling more than $1 billion, if the USF program goes away following the 5th U.S. Circuit Court of Appeals' recent ruling (see 2408140055), which found that the USF contribution factor is a "misbegotten tax.” Also, 71% said “they would need to cancel 2026 deployment projects, equaling nearly $900 million and representing nearly 83% of these companies’ planned investments for 2026,” without USF support, NTCA said. “If USF support were eliminated, there is substantial potential for default on outstanding network construction loans, including many held by the federal government,” the group said. NTCA members reported receiving an average of $72 monthly per broadband subscriber in USF support. The survey results were released last week. “As this survey highlights, without USF support, not only could consumers who currently have broadband see the cost of their bills skyrocket, but rural providers will find it harder or even impossible to make the further investments needed to connect those still waiting for service or to repay loans for deployments already made,” said NTCA CEO Shirley Bloomfield.
FCC Chairwoman Jessica Rosenworcel noted work the agency has done in recent months that addresses broadband for students following the loss of the emergency connectivity fund and affordable connectivity program in a Monday speech. Speaking to the Consortium of State School Boards Association, Rosenworcel mentioned a July FCC order that lets schools and libraries use E-rate support for off-premises Wi-Fi and an order from 2023 allowing use of E-rate to support school bus Wi-Fi, both of which have been challenged in court (see 2408300027). She also discussed a three-year, $200 million cybersecurity pilot program for schools and libraries that commissioners approved in June (see 2406060043). Republican commissioners dissented on all three items. “Every child needs internet access at home to really thrive,” Rosenworcel said: “This was not true when I was growing up. I didn’t need the internet for homework. All I needed was paper, a pencil, and my brother leaving me alone.” Rosenworcel warned that the 5th U.S. Circuit Court of Appeals' recent 9-7 en banc decision that found the USF contribution factor is a "misbegotten tax” that could undermine FCC education efforts (see 2408140055). The 5th Circuit decision “is misguided and wrong,” she said. “It reflects a lack of understanding of the statutory scheme that helped create the world’s best and most far-reaching communications network” and “that is why we are asking the Supreme Court to overturn” the decision.
With Congress back for a three-week sprint before Election Day, Competitive Carriers Association CEO Tim Donovan remains convinced lawmakers will fully fund a program that removes unsecure gear from U.S. networks. In an interview, Donovan also said he expects at least some groups will seek reconsideration of the FCC’s recent order creating a 5G Fund.
The National Association of Surety Bond Producers urged the FCC to allow performance bonds to be used as an alternative to letters of credit for USF high-cost program recipients (see 2408200021). The FCC in July sought comment on whether it should amend its letter of credit rules. In separate meetings with an aide to Chairwoman Jessica Rosenworcel and Wireline Bureau staff, the group noted that performance bonds "guarantee the funding recipient's performance of the construction and installation of the broadband network needed" to provide broadband services "even in bankruptcy" for the amount of the bond, per an ex parte filing Friday in docket 10-90. It's also "in the public interest" to let performance bonds be used as NTIA did for the broadband, equity, access and deployment program.
Maurine and Matthew Molak filed a petition Thursday seeking review of a July FCC order that lets schools and libraries use E-rate support for off-premises Wi-Fi hot spots and wireless internet services (see 2407180024), in the 5th U.S. Circuit Court of Appeals. The Molaks previously sought reconsideration of the July order, which three public interest groups and T-Mobile opposed last week (see 2408280029).
The Rural Wireless Association expressed disappointment after the FCC released an order Thursday launching a multi-round reverse auction that will pay up to $9 billion to bring voice and 5G mobile broadband service to rural areas of the U.S. otherwise unlikely to see 5G deployments (see 2408290022). The Competitive Carriers Association also expressed concerns.