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.
Spreading high-speed internet will remain a key focus for the California Public Utilities Commission in the years ahead, CPUC President Alice Reynolds told Communications Daily during a wide-ranging Q&A. Reynolds addresses broadband funding, affordability issues, state USF and the FCC’s net neutrality rulemaking in written answers to our questions, lightly edited for length and clarity.
Industry groups welcomed the FCC's inquiry on improving its broadband data collection (BDC) process. The agency sought feedback as part of a report to Congress about data collection and whether tools are needed to improve the data's accuracy (see 2401190071). Comments were posted Tuesday in docket 19-195.
ISPs and industry groups generally supported the FCC's proposal that builds on its Alaska Plan high-cost USF program by transforming it into an Alaska Connect Fund. Reply comments were posted Friday in docket 23-328 (see 2310190056). Some urged that the commission reconsider its eligible telecom carrier (ETC) designation requirement for support recipients and sought a technology-neutral approach.
A coalition of 21 Republican state attorneys general urged the U.S. Supreme Court to hear Consumers' Research's challenge of the FCC's quarterly USF contribution factor and methodology in an amicus brief posted Thursday (docket 23-743). "Agencies are finding all kinds of creative new ways to grab money and power for themselves lately," the coalition, led by West Virginia AG Patrick Morrisey (R), said. The FCC "extracts billions from American consumers based on a vague statute" and "doesn’t even do the work of setting these rates itself," they argued (see 2401100044). The AGs called the FCC's use of the Universal Service Administrative Co. unconstitutional and a violation of the nondelegation doctrine. "Those that would warn the Court away from reaching these issues are wrong," the group said: "The benefits of the present state of play are overstated." The FCC declined to comment Monday. The agency on Monday petitioned the court to extend until April 3 the March 4 deadline for responding to Consumers' Research's petition, citing a parallel case pending in the U.S. Court of Appeals for the 5th Circuit.
Pennsylvania’s biggest incumbent, Verizon, launched an all-out attack on state USF in comments Friday, urging that the Pennsylvania Public Utility Commission eliminate the fund. The carrier said the USF is archaic. In addition, AT&T joined Verizon in urging the PUC to reduce regulations, such as carrier of last resort (COLR) obligations. However, rural LECs argued that they will continue needing state USF support for as long as Pennsylvania heavily regulates them.
The telecom industry pushed back on a Vermont state bill that could shake up state USF contribution and telecom taxation. At a House Ways and Means Committee hearing streamed Wednesday, a wireless industry lobbyist said a proposed shift to connections-based USF contribution mechanism unfairly shifted costs to wireless customers. A New England Connectivity and Telecommunications Association (NECTA) lobbyist, representing the region’s cable industry, condemned a possible $15 annual tax on each pole attachment owned by private communications providers. Community media representatives supported the proposed tax for supporting public, educational and governmental (PEG) channels.
The USF contribution factor will likely decrease to 34% during Q2 2024, analyst Billy Jack Gregg wrote in a Friday email (see 2311030064). Gregg noted projected demand for the second quarter will be $2.092 billion, about $26.7 million less than the first quarter.
FCC Chairwoman Jessica Rosenworcel confirmed to congressional leaders Thursday that the Wireline Bureau will move forward with freezing new affordable connectivity program enrollments Feb. 8 amid the continued push to provide the program stopgap funding to keep it running once its original $14.2 billion allocation runs out in April (see 2401250075). Senate Communications Subcommittee ranking member John Thune, R-S.D., is beginning to cite a recent FCC Office of Inspector General report on its audit of ACP’s 2022 performance (see 2401300090) as vindicating Republicans’ misgivings about the program, which some lobbyists believe may complicate those funding efforts.