The 5th U.S. Circuit Court of Appeals' ruling against the FCC's Universal Service Fund contribution mechanism "should spur reform in Congress," Free State Foundation Director-Policy Studies Seth Cooper blogged Friday (see 2407300053). Congress "should act promptly to make the USF program fiscally sustainable and constitutionally sound" through direct appropriations, Cooper wrote, adding that broadband should be "intelligibly" defined as a service eligible for support. Cooper suggested requiring that "major online companies" contribute "under principles that limit subsidy amounts." There's "widespread agreement that universal service should support broadband access," Cooper said: "Congress should replace the amorphous definition of universal service as an evolving level of services that are consistent with the public interest." Should direct appropriations not be feasible, Cooper suggested amending Communications Act Section 254 to include Big Tech companies that "benefit immensely" from universal service.
While a 5th U.S. Circuit Court of Appeals' ruling rejecting the FCC’s USF contribution methodology calls the entire USF into question, it also offers an “opportunity” for change, Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy, blogged Tuesday. Some experts say the case is likely headed for U.S. Supreme Court review (see 2407260044). “For years, policymakers have acknowledged the need to overhaul the USF because of its ballooning fees, potential for waste, and outdated priorities,” Kane said in a Broadband Breakfast blog: “Now, with its legal foundation in question, Congress has a clear mandate to reallocate funding to vital broadband programs like the Affordable Connectivity Program (ACP), while eliminating outdated and redundant initiatives.”
Telecom and banking groups urged that the FCC adopt proposed modifications to its letter of credit (LOC) rules for Universal Service Fund support recipients. Comments were posted Tuesday in docket 10-90 (see 2407030062). The commission proposed modifying LOC rules for its high-cost programs and Connect America Fund (CAF) Phase II and Rural Digital Opportunity Fund (RDOF) support recipients.
The USF quarterly contribution factor for Q4 2024 will likely increase from 34.4% to 34.6%, analyst Billy Jack Gregg wrote in an email Saturday (see 2408020048). Gregg said overall projected demand will jump by $6.7 million to $2.114 billion, caused by increases in demand for the rural health and E-rate programs. Gregg also noted that annual revenue in 2023 was the lowest in USF history.
The Senate Appropriations Committee's report on its Financial Services Subcommittee FY 2025 funding bill “urges” that the FCC move forward on revamping the Universal Service Fund. The Senate Appropriations Financial Services bill, which the panel approved Thursday, would increase annual funding for the FCC and FTC for FY25 (see 2408010059). Senate Appropriations said in the report, released Thursday night, that it wants the FCC to “seek public comment this fiscal year on any reform proposals that have been submitted to the commission or otherwise previously considered that would promote the sustainability and viability of [USF] and resolve inequities in the current contribution structure.” The FCC should “act as soon as possible following review of that record to adopt reforms to achieve” revamp objectives, Senate Appropriations said: The commission “should also provide specific recommendations to Congress regarding additional authority it believes it may need to enact any reforms that are found to be prudent, advisable, or necessary.” Members of a congressional working group are grappling with whether the 5th U.S. Circuit Court of Appeals’ July ruling that the FCC's USF contribution factor is unconstitutional will affect their work on a revamp framework (see 2407300053).
Members of the congressional Universal Service Fund revamp working group are considering whether, and how much, the 5th U.S. Circuit Court of Appeals' ruling will affect their rollout of a framework for overhauling the program. The court ruled last week that the FCC's USF contribution factor is unconstitutional (see 2407240043). Experts believe lawmakers will likely factor the ruling into the framework, but it could be moot should the U.S. Supreme Court reverse the decision on appeal (see 2407260044). Uncertainty about USF’s future will likely extend the working group’s already lengthy process, lobbyists told us.
Most parts of the FCC’s three-year, $200 million cybersecurity pilot program for schools and libraries will become effective Aug. 29, a notice for Tuesday’s Federal Register said. FCC Commissioners approved the program 3-2 in June, with Republicans Brendan Carr and Nathan Simington dissenting (see 2406060043). “The Commission seeks to address the apparent needs of schools and libraries for additional support for cybersecurity services and equipment, while evaluating the impact that providing that support would have on the USF,” the notice said.
The 5th U.S. Circuit Court of Appeals' ruling Wednesday against the FCC's Universal Service Fund contribution factor for the first quarter of 2022 will likely have little to no immediate impact on the commission's USF-funded programs and providers contributing to the fund, trade groups and legal experts told us (see 2407240043). It's uncertain how the U.S. Supreme Court would interpret conflicting rulings of the 5th, 6th and 11th circuits. Consumers' Research asked SCOTUS in a supplemental brief filed Thursday (docket 23-456) to grant rehearing as a result of the circuit split.
Kentucky Gov. Andy Beshear and North Carolina Gov. Roy Cooper possess the best telecom policy credentials among the main contenders to be the Democrats’ vice presidential nominee, broadband advocates and other policy observers told us. All the contenders hold broadly similar views to Vice President Kamala Harris on broadband and telecom policy matters, but could bring different perspectives to the ticket, experts said in interviews last week.
Telecom companies argued for more flexible speed testing rules in comments Tuesday at the Nebraska Public Service Commission. Some Nebraska requirements are too challenging, and the state should avoid duplicating FCC-mandated tests, they said. Sometimes the "costs of conducting testing exceed the benefits" of it, Nebraska Rural Independent Companies (RIC) said.