A 5th U.S. Circuit Court of Appeals ruling last week against the SEC could have implications for FCC enforcement actions and the powers of administrative law judges like the FCC’s ALJ Jane Halprin, but it is too early to be sure how the ruling against the SEC applies to other agencies, said academics and communications attorneys in interviews. Based on that Jarkesy v. SEC decision, U.S. Supreme Court rulings and a pair of cases currently before SCOTUS, the outlook for ALJs at federal agencies -- including the FCC -- “looks a little shaky,” said Jeffrey Lubbers, an administrative law professor at American University. “I’d be surprised if this decision is the final word,” said former FCC General Counsel Tom Johnson, now with Wiley.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
Citing the need to modernize the FCC's high cost USF programs and align them with recent federal broadband investments through the Infrastructure Investment and Jobs Act, commissioners on Thursday unanimously adopted an NPRM seeking comment on an Alternative Connect America Cost Model (ACAM) Broadband Coalition proposal extending the program. The proposal would increase deployment obligations in exchange for additional funding, and seeks comment on whether to extend participation to carriers that haven't already been participating in the program.
The Biden administration’s Monday announcement (see 2205060046) that 20 ISPs committed to offer low-income households broadband plans with download speeds of at least 100 Mbps at no more than $30 per month got a mixed reception among communications policy stakeholders. All of the participating ISPs -- which include Altice, AT&T, Charter, Comcast, Cox, Frontier, Mediacom and Verizon -- were already part of the FCC’s affordable connectivity program that subsidizes qualifying households’ broadband up to $30 per month. The White House said the participating ISPs cover more than 80% of the U.S. population.
Arizona could modify state USF into a rural-focused fund to expand broadband, said Smith Bagley in comments Monday at the Arizona Corporation Commission (ACC). "A narrowly tailored state universal service fund may be uniquely qualified to understand and address specific local needs in a manner that large temporary federal grant programs cannot.” The ACC could, through a rulemaking, amend Arizona USF rules “to create a rural universal service fund similar to the fund created by the New Mexico Public Utilities Commission,” it said in docket T-00000A-20-0336. Smith Bagley provides wireless and wireline service to tribes in remote parts of Arizona, but some areas in that territory remain unserved, and the company's voice, 3G and 4G networks "cannot be upgraded to 5G without substantial additional investment in wireless equipment and middle-mile fiber connections to its towers,” it said. "In areas with poor demographics and sparse population density (often less than ten people per square mile) there is no business plan supporting these additional investments without assistance from either a universal service mechanism or a grant program specifically designed to encourage investment.” Smith Bagley disagreed with Frontier Communications that the fund should be limited to voice. Tuscon Electric Power and UNS Electric on Friday supported using AUSF for “broadband development in rural and tribal communities, especially those that may be impacted by coal plant closures.” ACC Chairwoman Lea Marquez Peterson sought comments from tribes and cooperatives after only telecom companies commented initially on a possible AUSF update (see 2203280052).
Industry disagreed whether the FCC should pause some of its high-cost Universal Service Fund programs amid the recent $65 billion federal broadband support from the Infrastructure Investment and Jobs Act, in reply comments posted Friday in docket 21-476 (see 2202180046). Others debated whether to expand the fund's contribution base or turn to direct congressional appropriations. The FCC sought comments on USF's future as part of its report to Congress due by Aug. 12.
Staff at state commissions pushed forward USF update efforts. The Oklahoma Corporation Commission is seeking comment and plans a meeting soon on draft legislation to update Oklahoma USF (OUSF) into a broadband-focused subsidy, the OCC emailed stakeholders Monday. The Regulatory Commission of Alaska (RCA) posted a staff proposal Friday to use Alaska USF (AUSF) to close the digital divide in places where voice remains the primary form of telecom access. The Oregon Public Utility Commission plans to post a state USF proposal within a week, it said Monday.
Citing the expanded use of telemedicine, FCC commissioners unanimously adopted a Further NPRM seeking comments on changes to the rural healthcare program’s telecom program’s rates determination rules and to the healthcare connect fund’s internal funding caps, during the agency’s monthly meeting Friday (see 2202170031). They also adopted an order requiring Aureon to submit information needed to calculate refunds to its customers, and a $45 million fine against a company that made more than 500,000 robocalls that violate Telephone Consumer Protection Act rules. Chairwoman Jessica Rosenworcel also said the FCC plans a notice of inquiry on receiver standards, which has been before the agency for 20 years.
Commenters on the Universal Service Fund generally agreed its funding system is unsustainable and in need of changes but disagreed on the solution, in comments posted Friday in docket 21-476 (see 2112220051) as the FCC prepares its report to Congress on the future of USF.
State utility commissioners should get active in broadband funding talks, said NTIA and U.S. Treasury officials at the partially virtual NARUC conference Monday. Each state is to receive at least $200 million combined through Treasury’s Coronavirus Capital Projects Fund and NTIA's broadband equity, access and deployment (BEAD) program. State commissioners may no longer say broadband is “not my jurisdiction,” said former FCC and South Carolina Commissioner Mignon Clyburn: “I’m sorry, you can’t rest on that anymore.”
The FCC will soon adopt rules that "crack down on revenue sharing” and exclusive access arrangements between broadband providers and building owners in multi-tenant environments said FCC Chairwoman Jessica Rosenworcel during an Incompas policy summit in Washington Tuesday (see 2201210039). The record the FCC received last year on broadband access in MTEs “made one thing very clear,” Rosenworcel said: “The agency’s existing rules are not what they could be.” Commissioners Brendan Carr and Nathan Simington encouraged NTIA to prioritize unserved areas in its new broadband programs. Other panelists urged the FCC to revise the USF.