The Q1 USF contribution factor is projected to reach a record 31.8%, consultant Billy Jack Gregg emailed stakeholders Wednesday. That comes amid dropping revenue.
Senate Republican leaders are eyeing a floor vote as soon as next week to confirm FCC nominee Nathan Simington, setting up what’s likely to be a partisan showdown over the prospect of a 2-2 commission deadlock at the start of President-elect Joe Biden's incoming administration. The Commerce Committee advanced Simington Wednesday, as expected (see 2012010064), on a 14-12 party-line vote. Senate Democrats are already watching the potential implications for Biden’s pick for the party’s third FCC seat, when Chairman Ajit Pai leaves Jan. 20 (see 2011300032).
The Senate Commerce Committee appeared on track before its Wednesday meeting to advance FCC nominee Nathan Simington’s confirmation to the full chamber. That's despite continued uncertainty about whether panel member Dan Sullivan of Alaska will join other Republicans in backing the nominee. Opponents of Simington’s confirmation claim President Donald Trump picked him to displace Commissioner Mike O’Rielly because the nominee supports the push for a rulemaking on its Communications Decency Act Section 230 interpretation (see 2011100070).
The Wyoming Business Council should "immediately release" coverage maps for broadband network projects funded by Cares Act grants and "halt any funding for projects that will result in subsidized overbuilding," said FCC Commissioner Mike O'Rielly in a letter to Gov. Mark Gordon (R) Wednesday. Local fiber and cable-based broadband providers raised concerns about the duplication of networks in already-serviced areas. O'Rielly said such duplication would "artificially impair the value of" FCC USF subsidies, because at least one of the grants will allegedly overbuild a recipient of Connect America Fund Phase II auction funding. Gordon's office didn't comment Monday.
Backers and some critics of Ajit Pai agreed he was a particularly effective FCC chairman, leaving behind a legacy of major accomplishments and changes. Pai announced Monday he will step down on Inauguration Day, Jan. 20 (see 2011300020). Supporters said his scorecard includes enacting policies that accelerated broadband deployment and steering the agency through the pandemic.
Rules barring USF recipients from using equipment suppliers that were deemed national security risks should be “technology neutral,” asked the Telecommunications Industry Association in calls last week with aides to FCC Commissioners Mike O’Rielly and Brendan Carr, per filings posted Wednesday in docket 18-89. “Follow this time-honored technology neutral approach in determining what equipment and services can be used by U.S. providers to replace at-risk equipment.” Some language in the FCC’s draft item “could be read as promoting certain solutions over others,” TIA said.
FCC creation of the 5G Fund for Rural America -- which puts USF dollars in support of 5G deployment (see 2010270034) -- takes effect Dec. 28, says Wednesday’s Federal Register.
The FCC Public Safety Bureau denied ZTE’s petition for reconsideration of the bureau’s June 30 order designating the Chinese telecom equipment maker as a threat to U.S. national security. The order, which also covers Huawei, bars both companies from participating in the USF (see 2007160051). Huawei also sought reversal (see 2007310048). The FCC denied ZTE’s argument that the FY 2019 National Defense Authorization Act and the Secure and Trusted Communications Networks Act (HR-4998) limit “authority to implement a prohibition on USF support for ZTE equipment. ZTE has previously raised this argument and we find no grounds on which to reconsider it here.” The company “does not dispute critical facts underlying” the ban, “and those uncontroverted facts, standing alone, are enough to sustain” it, the bureau said. It reviewed “the totality of the evidence, which included legal and political analysis from Congress and the Executive Branch, Chinese law experts, as well as evidence of security threats provided by allied intelligence services and outside cybersecurity experts.” The bureau “determined that either directly [through] the application of the Chinese National Intelligence Law, or indirectly through the application of political pressure, Chinese companies like ZTE are required to cooperate with intelligence agencies by providing customer information and network traffic information.” It said ZTE “has substantial ties to the Chinese government and its military” apparatus. “We continue to find that vulnerabilities and cybersecurity risks plague ZTE equipment,” the bureau said. It “also took into account ZTE’s record of knowingly violating U.S. law, obstructing U.S. investigations, and making false statements to U.S. authorities even after entering a guilty plea for violating U.S. trade sanctions.” The gearmaker didn’t comment. The denial is “another important step in our ongoing efforts to protect U.S. communications networks from security risks,” said FCC Chairman Ajit Pai. He noted plans for commissioners to vote Dec. 10 on rules (see 2011190059) to help U.S. telecom companies replace suspect network equipment proposed in HR-4998. “Now it is more vital than ever that Congress appropriate funds so that our communications networks are protected from vendors that threaten our national security,” Pai said. Lawmakers are pushing to allocate $1.6 billion-$1.8 billion (see 2009140062).
House Commerce Committee Chairman Frank Pallone, D-N.J., and ranking member Greg Walden, R-Ore., urged the FCC Monday help U.S. telecom companies replace suspect network equipment, including those entities that qualify for funding proposed in the Secure and Trusted Communications Networks Act (HR-4998). Lawmakers are working to appropriate $1.6 billion-$1.8 billion to implement the law (see 2009140062). "Some small and rural communications providers would not otherwise be able to afford these upgrades,” Pallone and Walden wrote FCC Chairman Ajit Pai. Support for HR-4998 funding is "bipartisan and bicameral. ... In the meantime, carriers are moving forward to remove their suspect equipment and need guidance." The lawmakers want the FCC list equipment and software that would be eligible for reimbursement and reassure companies they won't jeopardize eligibility for that funding if they buy replacements now. Pai “strongly agrees with the letter’s goal of ensuring that our nation’s communications networks are secure,” an FCC spokesperson emailed. The commission "has taken significant action to protect against threats to our communications networks, including prohibiting” use of USF money “to purchase or support equipment or services from companies posing a national security threat.” The spokesperson noted Pai’s plans for a Dec. 10 vote on an order to set up a reimbursement program (see 2011190059). Competitive Carriers Association CEO Steve Berry wants the agency to begin noncontroversial steps to help companies that qualify for the money.
The FCC released the three draft items Chairman Ajit Pai is proposing for the Dec. 10 meeting (see 2011180065). The meeting will be headlined by a report and order implementing the Secure and Trusted Communications Networks Act, with an NPRM on equipment certification rules and an order on ATSC 3.0 datacasting. Industry officials said it's unclear whether FCC Democrats will consider any of the drafts controversial or major items that should be left for next year under the new commission.