NARUC Telecom Panel Approves 3 Resolutions, Weighs Future of USF

All three proposed telecom resolutions passed the committee by unanimous voice vote Monday. One, from Telecom Chair Tim Schram, which also appeared before other NARUC committees, seeks better coordination and greater cost sharing related to digging amid an influx of government funding for broadband deployment (see 2410290041). Coordination among underground utilities will be key to getting money to the right places, said committee Vice Chair Stephen DeFrank of Pennsylvania.

The committee agreed to delete a line from the initial draft that would have recommended utility coordination be considered when scoring broadband grant applications. Schram said that co-sponsor and Gas Committee Chair Tammy Cordova asked to remove it to avoid slowing deployment under the broadband equity, access and deployment (BEAD) program.

The committee cleared another Schram draft resolution that would authorize NARUC to defend the constitutionality of the federal USF surcharge mechanism in a forthcoming amicus brief in Consumers' Research v. FCC at the U.S. Supreme Court. In July, the 5th U.S. Circuit Court of Appeals ruled in that case that the funding mechanism for federal USF is unconstitutional. “The future of USF hangs in the balance,” said Schram, a Nebraska Republican. With so much public and private spending on broadband, “there has to be a path for sustainability going forward, and we don’t want to go down the road of stranded investment.”

The numbers resolution would urge that the FCC exercise its audit authority “to determine how companies are brokering or auctioning toll-free and other numbers via their websites and to determine how these companies obtain these telephone numbers.” States have been looking for ways to make numbers last longer. Indiana Utility Regulatory Commissioner Sarah Freeman, the item’s sponsor, noted that the U.S. could run out of numbers as soon as 2049 and any potential expansion could cost up to $270 billion.

USF Overhaul Prospects

Officials on a NARUC panel about updating federal USF agreed that more types of companies should pay into the fund. “We need to expand the contribution base [and] adhere to traditional cost, causation principles,” said Freeman. “If you benefit -- if you're receiving these subsidy dollars for your service -- you should be contributing to the program.”

“Widen the net” to include revenue from broadband companies and “anyone that benefits from broadband,” including edge and cloud providers, said Premier Communications CEO Ryan Boone, representing NTCA. For example, Amazon needs customers to have a good internet connection for watching Thursday Night Football on Prime Video, he said. However, if there's buffering during the game, “Amazon’s not getting the calls. We are.”

Updating USF will require congressional legislation, especially if policymakers want to widen the contribution base to include web companies not squarely within FCC jurisdiction, said John Heitmann, an attorney for the National Lifeline Association. Passing a bill is possible because USF has a “long legacy of bipartisan support” and the likely incoming Senate Commerce Committee chairman, Sen. Ted Cruz, R-Texas, has previously floated a plan for USF, said Heitmann.

The FCC doesn’t have to wait for Congress to widen the contribution base to include broadband information access services (BIAS), countered Rachelle Chong, a former FCC and California commissioner representing the Schools, Health & Libraries Broadband Coalition. The FCC “should act immediately to alleviate the current crisis,” said Chong: Requiring BIAS to contribute could drop the monthly surcharge on customer bills to 4% from 36%, with no material impact on broadband adoption levels.

Don’t switch to congressional appropriations to fund USF, considering the lapse in funding that occurred with the affordable connectivity program (ACP), warned Heitmann. Freeman concurred. “Congressional appropriation is probably too uncertain for something so important.” Chong agreed that the ACP experience shows it’s not wise to rely on congressional appropriations. A better way of promoting broadband affordability could be transitioning the Lifeline program for that purpose, she said.

With legislation, Congress could replace Lifeline with a revamped ACP that would become part of USF, said Heitmann. To gain bipartisan support, the new ACP must be more targeted, with stricter eligibility and verification rules, and no support for tablets, he said. Also, Heitmann predicted that Republican control of Washington would mean “some course correction” for E-rate. That probably will include ending support for Wi-Fi in school buses and for hot spot loaners, he said. Chong replied that she would be “distressed” if the U.S. stopped supporting Wi-Fi on school buses. That’s where kids now do much of their homework these days, said the SHLB representative.

Boone wants to dispel the “misconception” that USF is “just another grant program,” the NTCA representative said. While programs like BEAD offset the initial spend on a broadband deployment, USF is ongoing support for keeping networks sustainable, he said. Finishing a network build in a high-cost area doesn’t make that place cheap to serve in the long term, said Boone. “High cost is high cost.”

"There are a lot of unknowns as to how things are going to shake out from the new administration," remarked the panel's moderator, South Dakota Public Service Commissioner Chris Nelson (R). "It's all greenfield."

Future of ACP

“Recent events have changed the trajectory of the work” on digital equity, Williams said at the NASUCA meeting. The Rosenworcel aide, who also leads an FCC task force on digital discrimination, appeared to be referring to last week's U.S. presidential election results that will bring changed leadership at the FCC. “But the reality is that a lot of the commission’s work in this area” can “transcend partisanship,” he said. “In this era of extreme partisanship, you will have a hard time finding an issue that engenders broader support than the goal to close the digital divide.”

Williams hopes ACP is merely on “pause” after running out of funding in May. “ACP was too impactful [and] enjoyed too much support on Capitol Hill and across the country to just move on and say it was nice while it lasted.” A bipartisan group, including the next vice president, Sen. JD Vance, R-Ohio, led the effort to re-up ACP funding, noted the FCC official. “If ACP can unite those folks in this climate, I am hopeful it can be revived.” A “dysfunctional” level of partisanship has stymied ACP funding despite the bipartisan support, but that might change in the new Congress, he said.

In the meantime, states should seek ways to make broadband affordable, said Williams. A 2021 New York law requiring $15 monthly broadband plans was a “good idea,” he said. The state hasn’t been able to enforce the law due to litigation, now at the U.S. Supreme Court (see 2410300025).

Also at the annual conference, NARUC elected Georgia Public Service Commission Chair Tricia Pridemore (R) as its president, replacing North Dakota PSC Commissioner Julie Fedorchak (R). Last week, Fedorchak was elected a U.S. House representative. Also, NARUC elected Washington Utilities and Transportation Commissioner Ann Rendahl as first vice president and Virginia State Corporation Commission Judge Jehmal Hudson as second vice president.