Telecom and technology are finally converging, but the FCC has been slow to keep up with the change, Commissioner Brendan Carr said Tuesday at FCBA's first “all chapter” virtual event, with members watching from across the U.S.
Big wireless carriers sounded the alarm about California considering a connections-based USF contribution mechanism. Some wireline companies and consumer advocates supported the change, in Monday comments at the California Public Utilities Commission. They highlighted ways to mitigate possible regressive impacts of moving from a revenue-based mechanism for California’s public purpose programs (PPPs). Oklahoma and Nebraska commissions may soon adopt state USF contribution changes, said agency officials in those states.
Some members of Congress are taking a tentative renewed look at legislation to reallocate proceeds from the FCC's recent auction of spectrum from the 3.7-4.2 GHz C band to pay for broadband, before Capitol Hill's debate over infrastructure spending. President Joe Biden proposes $2.3 trillion for infrastructure, including $100 billion for broadband (see 2103310064). Republicans criticized the administration for pursuing corporate tax increases to help pay for it.
A federal court agreed with CTIA that a Kentucky 911 law conflicts with the 2018 federal Wireless Telecommunications Tax and Fee Collection Fairness Act. Responding to that federal statute, the 2020 state law made Lifeline providers directly liable for 911 fees and barred them from passing the charge to users. In an opinion (in Pacer) entered Tuesday, U.S. District Court in Frankfort, Kentucky, granted an injunction and restraint against the Kentucky 911 Service Board in case 3:2020-cv-00043. Judge Gregory Van Tatenhove agreed with industry that the Kentucky law is preempted by Section 1510 of the Fairness Act, which limits states from requiring someone out-of-state from collecting state or local fees. “Though the Board alleges that Kentucky’s intention” with the 2020 law “was to comply with Section 1510, the state has failed to do so,” wrote Van Tatenhove. The judge disagreed with CTIA that the law violated two sections of the Communications Act, and he didn’t address the association’s constitutional claims. Section 254(f) on USF doesn’t preempt the Kentucky charge because the fee “has no relation to the manner by which Kentucky operates its universal service fund,” he said. Section 332(c)(3) stopping states’ from regulating wireless provider rates and entry can’t “be read so broadly as to prevent any incidental effects on entry or rates that a [statute] might impose,” he said. The judge disagreed with the state board that CTIA lacks standing as an association representing affected carriers and that Communications Act Section 616a-1(f)(1) exempts state 911 charges from preemption. Such a “broad reading ... would allow states to impose extreme requirements, like the taking of large portions of the service providers’ subsidies, in the name of ‘collecting fees for 911 services,’” he wrote. CTIA is glad the court recognized that the Kentucky law "discriminated against Lifeline providers serving low income consumers," said General Counsel Tom Power. "We are committed to working with policymakers at all levels to ensure all Americans benefit from wireless connectivity and ensure that 9-1-1 systems are appropriately funded." The Kentucky board didn’t comment.
The FCC must close a loophole that lets gear from Huawei and other Chinese companies be approved under equipment authorization rules, Commissioner Brendan Carr said during a Center for Strategic and International Studies webinar Tuesday. The agency barred equipment by Huawei and ZTE in networks funded by USF. It should clamp down to ensure it’s not used in any U.S. systems, Carr said.
The Texas Public Utility Commission can't decline to fully fund state USF when it disagrees with state policy, rural telco groups argued at Monday's livestreamed argument at the 250th District Court in Travis County. The Texas Statewide Telephone Cooperative Inc. (TSTCI) and Texas Telephone Association (TTA) sued the PUC in January because members face reductions in Texas USF (TUSF) support due to the PUC refusing to raise the contribution rate (see 2101260046).
The FCC Wireline Bureau gave Tata Communications limited waiver of rules for revenue reporting years 2020 and 2021, in an order said Thursday. This waives the 12% limited international revenue exemption (LIRE)-qualifying threshold so Tata may "continue to contribute to the Universal Service Fund based solely on its interstate end-user telecommunications revenues." Waiver is limited to "direct USF contribution obligations only" and expires at year-end or the effective date of any new rules revising LIRE on an industrywide basis. Tata won't be exempt from paying indirect USF contributions if its interstate revenue declines to a level that would qualify the company for de minimis status.
The Biden-era FCC has a "seemingly endless list" of issues to be addressed, blogged former FCC Chairman Tom Wheeler Thursday. The USF contribution factor has spiraled to "an unacceptable rate that now threatens the entire program," Wheeler said, and the FCC under then-President Donald Trump "failed to take any action." Wheeler criticized former Chairman Ajit Pai for waiting until his final days in office to suggest a solution and not acting sooner. A "logical solution," Wheeler said, "would have been to seek congressional help" or expand the contribution base to include broadband. The Trump-era FCC punted on further defining broadband service, he said. The FCC should consider reinstating net neutrality rules if it also wants to reinstate privacy protections for network users, he said, because "returning ISPs to common carrier status ... triggers their responsibility to protect the privacy of their subscribers." It should reconcile with calls to repeal Communications Decency Act Section 230 and the Trump FCC having spent the past few years "assiduously cutting the agency's authority" and "swiftly expanding that authority into previously untouched areas that probably infringe" on First Amendment protections, Wheeler said. The Supreme Court's Chevron doctrine will likely play a role in how the FCC practices administrative law amid speculation that justices appointed by Trump "may seek to overturn the Chevron precedent," Wheeler noted. The Biden FCC should decide whether to work closely with DOJ, as it did during the Obama administration, in reviewing transactions, Wheeler said, because "that cooperation became more of an exception than the rule" under Trump. It will also have to "catch up" on addressing the needs of deaf and hard of hearing individuals. To achieve anything, Biden must nominate a new commissioner and decide whether to reappoint acting Chairwoman Jessica Rosenworcel, whose term expired in June 2020, Wheeler said. Pai declined to comment. The FCC didn't respond.
FCC staff approved Otelco's transfer of control request to Future Fiber FinCo., a public notice said Wednesday in docket 20-275. The OK is subject to conditions adopted in the Hargray/ComSouth order because Otelco's subsidiaries receive USF and fixed Connect America Fund Phase II support (see [Re:1805110048]). "The combined operating expenses of each post-consummation company’s rate-of-return affiliates shall be capped at the averaged combined operating expenses of the three calendar years preceding the transactions’ closing date for which the operating expense data are available," the PN said. The cap lasts seven years, less if the rate-of-return affiliates become model-based support companies.
With the USF contribution factor at an all-time high (see 2103020032), reform must be addressed “head-on,” said FCC Commissioner Brendan Carr during a Free State Foundation event Tuesday. The contribution factor has been “spiraling,” he said.