Consumers’ Research and other conservative interests are once again asking the FCC to zero out the USF contribution factor, this time for Q3 2025. The group filed the day after the FCC Office of Managing Director proposed a contribution factor of 36% for Q3 (see 2506110058). The U.S. Supreme Court is expected to rule in coming days on an appeal of a 5th Circuit en banc decision last summer, which found that the USF contribution factor is a "misbegotten tax.” Justices heard oral argument in that case in March (see 2503260061).
The leaders of the House and Senate Communications subcommittees said Thursday they're reviving the bicameral USF revamp working group, which had paused its work on legislative recommendations last year amid uncertainty following the 5th U.S. Circuit Court of Appeals’ ruling in the Consumers' Research lawsuit against the program’s funding mechanism (see 2407300053). The Supreme Court heard oral arguments for its review of the case in March (see 2503260061). Working group members had considered melding the FCC’s lapsed affordable connectivity program with USF’s Lifeline program and keeping the latter’s narrower eligibility rules (see 2404170066).
Two Texas associations this week petitioned the 5th Circuit U.S. Court of Appeals asking it to overturn a January declaratory ruling by the FCC in response to the Salt Typhoon cyberattacks. CTIA, NCTA and USTelecom previously asked the FCC to reconsider the ruling (see 2502190081), which now-Chairman Brendan Carr had opposed (see 2501160041). Commissioners approved it 3-2 in the final days of the Biden administration.
Consumers’ Research has filed another challenge to the legality of the FCC’s USF contribution factor, this time for Q2 of this year, at the 5th U.S. Circuit Court of Appeals. The group chose what's likely the friendliest circuit for an appeal; the U.S. Supreme Court is currently considering an appeal of a 5th Circuit en banc decision last summer, which found that the USF contribution factor is a "misbegotten tax.” Justices heard oral arguments in that case last week (see 2503260061).
Trent McCotter, the lawyer for Consumers’ Research, faced tough questions during lengthy oral arguments Wednesday at the U.S. Supreme Court on the group’s challenge of the USF contribution factor and the USF in general. Sarah Harris, acting U.S. solicitor general, vigorously defended the USF on behalf of the government. Paul Clement of Clement & Murphy, a high-profile conservative appellate lawyer, represented industry defenders of the USF.
On the eve of a key U.S. Supreme Court case concerning the USF's future, FCC Chairman Brendan Carr said questions remain about the program's survival. How USF is paid for has to change, Carr told a Free State Foundation conference Tuesday. He also said he supports President Donald Trump's dismissal of Democratic commissioners at the FTC.
Lawyers for the Schools, Health & Libraries Broadband Coalition and the Benton Institute for Broadband & Society were cautiously optimistic Wednesday that their side would prevail at the U.S. Supreme Court in support of the FCC and the USF contribution factor in FCC v. Consumers’ Research. But they also expect a divided decision. SCOTUS is to consider the case March 26.
The government defended the FCC in a reply brief in FCC v. Consumers’ Research, the USF case before the U.S. Supreme Court, arguing that Consumers' Research (CR) creates a “straw man” to attack. Public interest groups, led by the Schools, Health & Libraries Broadband Coalition, also defended the legality of how the USF contribution factor is calculated. SCOTUS is set to hear oral argument March 26.
The FCC Office of Managing Director announced Thursday a proposed Q2 USF contribution factor of 36.6%, as calculated by the Universal Service Administrative Co. That’s up from 36.3% the previous quarter and the highest quarterly contribution factor in the program's history. Meanwhile, the U.S. Supreme Court will hear FCC v. Consumers’ Research March 26, a case about the contribution factor's legality.
ACA Connects CEO Grant Spellmeyer and two other communications industry executives set to appear at a House Communications Subcommittee hearing Wednesday urge lawmakers in written testimony to revamp the NTIA-administered, $42.5 billion BEAD program. Some also say they want quick congressional action on a potential U.S. Supreme Court overturn of USF’s funding mechanism. Sarah Morris, acting deputy NTIA administrator during the Biden administration, is also set to testify. Her written statement wasn’t available Tuesday afternoon. The panel will begin at 2 p.m. in 2123 Rayburn.