The entire Arizona Corporation Commission refused hiking monthly surcharges on customer bills for the state’s high-cost fund, despite projections that the Arizona Universal Service Fund (AUSF) will soon run out of cash. The ACC's lone Democrat joined four Republican commissioners in voting against increased surcharges during a livestreamed meeting Tuesday. Staff warned last month that the AUSF would be depleted by the end of April, meaning no more payments starting May for funding AUSF administrator Solix or Frontier Communications, the only company in the state receiving this high-cost support (see 2402280038). Frontier supported staff’s proposal to increase the monthly surcharge on customer bills. However, Arizona commissioners said during the livestreamed meeting that they preferred addressing the issue through an upcoming Frontier rate case planned for this fall. Commissioner Kevin Thompson (R) can’t support increasing the AUSF fee, he said. “Let’s look at this in the rate case and have a broader discussion on the merits of the AUSF as we go forward.” Arizona commissioners also declined raising AUSF contribution rates in 2022 and 2023 (see 2312050032).
The major questions doctrine "is not applicable" to reclassifying broadband as a Communications Act Title II service, Public Knowledge told FCC Wireline Bureau, Public Safety and Homeland Security Bureau, and Office of General Counsel staff. The group said in an ex parte filing posted Tuesday in docket 23-320 that the commission "would need to claim a new power or reverse a long-standing interpretation of a statute" for the doctrine to be considered. The FCC "does not need evidence of new harms to justify its reversal" to "the status quo ante," the group said, adding the commission "only needs to assert that the 2018 reversal does not comport with the FCC’s mandate to ensure universal service and promote public safety." Public Knowledge also asked the FCC not to forbear providers from Section 254(d) rules governing USF contributions, noting any contribution requirements would require the commission to first establish a specific mechanism (see 2403080055).
The Affordable Broadband Campaign urged the FCC not to immediately grant broadband providers forbearance from Communications Act Section 254(d) requirements in its net neutrality proceeding. The group's chair, Vernonburg Group Chief Policy Officer Greg Guice, said granting forbearance of Section 254(d), which governs USF contributions, is "unnecessary and not supported by the record," per an ex parte filing posted Friday in docket 23-320 (see 2310190020). The group urged the FCC to start a proceeding "focused on whether and how the contribution obligation would be undertaken." The group met with Wireline Bureau staff.
Senate Commerce Committee ranking member Ted Cruz, R-Texas, called Wednesday for Congress to substantially rein in the FCC's autonomy in setting USF spending and creating new programs amid a bicameral working group’s examination of a possible universal service revamp (see 2305110066). “Caught in a dilemma of wanting to further expand USF programs but having already maxed out the level of taxation American consumers can reasonably tolerate, the conversation at the FCC and in Congress has focused on expanding the pool of companies and products subject to” the USF contribution factor, which is effectively a “tax on the working class,” Cruz said in a paper. “This approach is anything but fair to American taxpayers: it would hide the problem of excessive USF taxation rather than fix it and ultimately make tax burdens worse by emboldening further unaccountable spending growth.” Instead, he said Congress should “take charge of defining universal service and deciding where USF funds may go.” Cruz proposes making most USF programs subject to congressional appropriations but believes “it may make sense to keep the High-Cost program within the current” funding framework “given ongoing multiyear commitments to providers.” Congress should eliminate “duplicative” USF spending, including combining the Lifeline program with the currently independent affordable connectivity program, given perceptions that the “federal government has too many broadband programs, and a poor record of coordinating them,” Cruz said. He also proposes curbing the FCC’s expansion of E-rate eligibility, citing concerns about permitting schools and libraries to use program support for off-premises Wi-Fi hot spots and wireless internet services (see 2311090028).
Lack of trained tradespeople and onerous permitting procedures could represent major challenges to broadband equity, access and deployment (BEAD) program implementation, speakers said Tuesday at Incompas’ annual policy summit in Washington. The looming end of the affordable connectivity program (ACP) (see 2403040077) is a big wrench in the works of planned BEAD projects, said Evan Feinman, who leads NTIA's BEAD program. He said internet service providers are recalculating project costs, and many planned projects will go into the red as they receive less help covering their operating expenses.
Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., and House Communications Subcommittee ranking member Doris Matsui, D-Calif., voiced varying levels of optimism during a Tuesday Incompas conference (see 2403050052) about the prospects that lawmakers will be able to reach a deal on stopgap funding that will keep the FCC’s affordable connectivity program running past this spring. The FCC said in a Monday update on its wind-down of the program that it will be able to provide only “partial” reimbursements for ACP in May (see 2403040077). Sen. Marsha Blackburn, R-Tenn., and Rep. Tim Walberg, R-Mich., highlighted their ongoing interest in enacting legislation to lift or ease permitting processes in a bid to streamline broadband deployments.
The Utah Public Service Commission set an April 5 technical conference on possibly tightening requirements for seeking state USF support. The Utah PSC said it opened docket 24-999-10 in response to Commissioner John Harvey’s request that the commission get more evidence showing that costs claimed by a telecom company to receive support are reasonable. Harvey suggested that this includes a showing that the utility has applied for federal funds that could offset broadband costs and that any broadband speed the company provides above the federal minimum “has been done without incurring additional costs … or that such extra costs are either insignificant (compared to the total costs of the project), or that the extra costs can be justified by other public policy considerations," the PSC said. Also, Harvey wants to see utilities show their network design “is the least cost design” and that they chose the lesser cost "option of self-construction versus contracted construction,” it said.
Numerous ISPs believe the affordable connectivity program's demise would give them a chance to snag subscribers from competitors. In earnings calls with analysts this quarter, many cable companies and telcos also told Wall Street they don't expect to take major hits to their subscriber base if the program ends (see 2311160076). The FCC said Monday that ACP funding will run out before the end of May (see 2403040077).
An all-but-certain bid by Senate Communications Subcommittee ranking member John Thune (S.D.) to take over as the chamber’s top Republican from current Minority Leader Mitch McConnell (Ky.) is throwing uncertainty into lobbyists’ expectations for who will hold the party's subpanel leadership role in the next Congress. In the House, some Republican contenders to replace term-limited Communications Subcommittee Chairman Bob Latta (Ohio) have emerged, but the race to be the party’s Commerce Committee leader and other factors continue to cloud the subpanel sweepstakes (see 2402290054).
Arizona Corporation Commission staff warned Tuesday that the Arizona Universal Service Fund (AUSF) could exhaust its money unless the commission increases contribution rates. Commissioners could vote March 12 on a staff-proposed order to raise fees. AUSF administrator Solix told commission staff “that although there were enough funds collected to fund the AUSF for January, February and March 2024, Solix has calculated that it's anticipated, by the end of April, the AUSF fund balance would be depleted and that the fund will not be able to pay the Commission-approved and contractual obligations to [Frontier Communications] and Solix, respectively, beginning in May 2024,” said a Tuesday (docket RT-00000H-97-0137). For basic local exchange and wireless service providers that interconnect with the public switched network, staff recommended increasing the monthly surcharge to 3.4 cents per access line, up from 2 cents, and to 34 cents per interconnecting trunk line, up from 20 cents. For intrastate toll service providers, Arizona commission staff recommended increasing the monthly surcharge to 45% of revenue, up from 34.1%. The new rates would start April 1 and would result in a $200,000 fund balance by year-end, a “reasonable level” that would “potentially eliminate the need to revise the AUSF surcharge rates again for 2024,” staff said. Arizona commissioners declined raising AUSF contribution rates in December (see 2312050032). Frontier is the only company receiving AUSF high-cost support.