Small and mid-sized cable operators are largely bullish about President-elect Donald Trump's incoming administration and his choice of FCC Commissioner Brendan Carr to head the agency, expecting aggressive deregulation, ACA Connects President Grant Spellmeyer said during an interview with Communications Daily. Spellmeyer discussed the industry group's 2025 priorities, growing questions surrounding BEAD, and what one does during the lame-duck weeks before inauguration and a new administration. The following transcript was edited for length and clarity.
Consumers’ Research and other conservative interests last week urged the FCC to zero out the USF contribution factor. Next year, the U.S. Supreme Court is slated to hear a case that Consumers’ Research brought in the 5th U.S. Circuit Court of Appeals (see 2412100060), which found in a 9-7 en banc decision that the contribution factor is a "misbegotten tax.” Posted Friday in docket 96-45, the filing arrived the day after the FCC Office of Managing Director proposed a contribution factor of 36.3% for Q1 2025 (see 2412120061). The contribution factor “is an unconstitutional tax raised and spent by an unaccountable federal agency -- which in turn has delegated almost all authority over this revenue-raising scheme to a private company registered in Delaware,” the Universal Service Administrative Co. The cost “is ultimately borne by consumers via a separate line item on nearly every phone bill in the country,” the filing said. In its decision, the 5th Circuit found the USAC “sets the USF Tax -- subject only to FCC’s rubber stamp” and the agency lacks "a documented process for checking USAC’s work,” the filing said. Among those endorsing the pleading was Edward Blum, president of Students for Fair Admissions, which last year won a SCOTUS case that effectively ended race-based affirmative action policies in American college admissions, and other respondents listed on Consumers’ Research’s initial SCOTUS brief.
The FCC’s final order on letter of credit (LOC) rules for providers receiving high-cost USF support saw one major change from the draft version. Commissioners approved the order 5-0, with language added at the request of Commissioner Anna Gomez (see 2412110050), addressing tribal issues. The final version notes that “making wholesale changes to our rules in the middle of an ongoing program would be unnecessary and could create confusion for support recipients,” the same as the draft. But the final version added a sentence: “Given the difficulties some Tribal carriers have collateralizing assets to support a LOC, however, we will consider waiving the relevant LOC requirements on an individual basis consistent with the Commission’s waiver standard, and we do not foreclose examining in future support programs whether Tribal carriers should be permitted to rely on alternatives to LOCs.” The FCC on Friday posted the final version of the LOC changes. It includes a statement by Chairwoman Jessica Rosenworcel. The agency also posted the final version of an order that expands the parts of the 6 GHz band where new very-low-power (VLP) devices are permitted to operate without coordination. That order was also approved 5-0 with no changes of note (see 2412110040). Only Rosenworcel and Commissioner Geoffrey Starks issued written statements. That order was also posted on Friday.
With USF in the crosshairs at the FCC (see 2412030044), the FCC Office of Managing Director Thursday proposed a contribution factor of 36.3% for Q1 2025. That’s up from 35.8% during Q4 2024 but below a November projection of 38.8% by analyst Billy Jack Gregg (see 2411040026). The total contribution requirement for Q1 is $2.2 billion, of which just more than $1 billion is tied to high-cost program support. Next is the schools and libraries program ($657 million), Lifeline ($288 million) and the rural healthcare program ($129.5 million).
The U.S. Supreme Court decision doing away with Chevron deference won’t grind the next FCC to a halt but could prompt congressional action on the USF, former FCC officials said during panel discussions Thursday at Broadband Breakfast’s "Broadband in the Trump Administration" event.
The FCC Wireline Bureau on Wednesday adopted the National Exchange Carrier Association's recommendations on proposed changes to the USF cost per loop (CPL) formula. The bureau sought comment in September, and none was received (see 2409190029), it said. “We find that NECA’s results and CPL calculations appear to be accurate and complete, and the proposed [high-cost loop support] formula should reasonably approximate the CPL of the sample average schedule companies, and thereby allocate funds appropriately to average schedule companies.”
FCC commissioners unanimously approved an order Wednesday amending the commission's letter of credit (LOC) rules for providers receiving high-cost USF support, moving away from reliance on the Weiss rating system. The order affects participants in the Connect America Fund Phase II and Rural Digital Opportunity Fund programs and those receiving support for Puerto Rico and U.S. Virgin Islands. The order saw tweaks at the request of Commissioner Anna Gomez, officials said.
The Rural Wireless Association, EchoStar and Communications Workers of America filed FCC petitions asking that the agency reject T-Mobile’s proposed acquisition of "substantially all” of UScellular’s wireless operations, including some spectrum (see 2405280047). Public interest and consumer groups also opposed approval. The deal is relatively small as telecom mergers go -- valued at about $4.4 billion, including $2 billion in assumed debt -- but has ignited substantial opposition. UScellular is the nation’s fifth-largest wireless carrier.
Many questions remain about how the U.S. Supreme Court will decide FCC v. Consumers’ Research, lawyers involved in the case said Tuesday during an FCBA webinar. The USF case is expected to be heard in the spring. SCOTUS decided last month to 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.
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).