A petition challenging the FCC USF Q4 contribution factor is likely to fail on procedural grounds but may be part of a bigger challenge to dismantle USF entirely, legal experts said in recent interviews (see 2110010062). Some said it may be an effort to force a reevaluation of the nondelegation doctrine that prohibits Congress from delegating legislative powers to executive branch agencies.

The USF Q4 contribution factor is “illegal and should be rejected,” said Consumers' Research as it asked the 6th U.S. Circuit Court of Appeals to vacate the FCC approval (see 2109100069), said a petition in its challenge (both in Pacer, No. 21-3886). The approval “exceeds the FCC’s statutory authority,” the group said. Congress' "standardless delegation" to the FCC to raise and spend money for USF violated the Constitution because "the revenues raised ... are taxes," it said. The group said the Universal Service Administrative Co., which administers USF programs, is a private company and the appointment of its board directors by the FCC chair violates the Constitution's appointments clause if it's determined that USAC isn't a private entity. The group also said the FCC failed to comply with the Administrative Procedure Act's rulemaking and Federal Register Act's publication requirements. The agency didn’t comment.

FCC commissioners approved an NPRM on making networks more resilient during disasters 4-0 Thursday, as expected (see 2109280051). Commissioners said more mandates could come as a result of the investigation. Acting Chairwoman Jessica Rosenworcel said the FCC plans a virtual field hearing as part of the Oct. 26 meeting on Hurricane Ida. Rosenworcel and Commissioner Brendan Carr traveled to Louisiana this week to tour areas hit by the latest storm. Commissioners also unanimously adopted an order on foreign ownership and an NPRM about closing two methods for scammers taking control of victims' mobile phones, SIM swapping and port-out fraud. Such actions were as expected (see 2109280009).

The FCC has the authority to include broadband services revenue in the USF contribution base but would need to establish a comment period before making any changes, industry groups said in recent interviews. A new report suggests adding broadband providers could drop the contribution factor to as low as 4% and avoid facing direct congressional appropriations (see 2109130053).

USForward asks the FCC to address the rising USF factor by spreading costs among consumers, assessing the fee based on broadband access service revenue. Monday's report said that's a better option than basing fees on numbers or connections. On a call with reporters, officials from NTCA, Incompas, Public Knowledge and the Schools, Health & Libraries Broadband (SHLB) Coalition disagreed whether action may have to await a permanent chair and full commission.

NTCA, Incompas, Public Knowledge and the Schools, Health & Libraries Broadband Coalition will release a "USForward" report Monday that "highlights the need for USF contribution reform, analyzes options for doing so, and provides recommendations on how best to reform this essential support mechanism," said a news release Friday. Consultant Carol Mattey, who wrote the report, will join the groups for a news briefing at 11 a.m. EDT.

Alaska telecom associations submitted state USF update proposals with a connections-based contribution method to the Regulatory Commission of Alaska in docket R-21-001. The Matanuska Telecom Association submitted its proposal for a flat-rate surcharge Wednesday after previewing it at an RCA meeting last month (see 2108110059). The revenue-based fee went as high as 19% in 2018 before the RCA capped it at 10%, MTA said. The RCA would require the new method and let the Alaska USF administrator set the monthly per line fee, the group proposed: No distribution changes are necessary. The Alaska Remote Carrier Coalition filed a plan for a new “Remote Alaska Fund” with a connections-based method that at first would support voice and later broadband. The RCA should set the AUSF at $30 million yearly, split evenly between small and large carriers, it said. GCI neither supports nor opposes any reform plan, and “is ambivalent about a connections-based funding mechanism,” the carrier commented. “Such a charge is certainly not a magic bullet that will solve the funding issue; the source of funding would continue to remain with ratepayers.” It could mean $2 per line monthly for every Alaska phone customer, and the RCA should consider how that “charge itself harms the goal of universal service,” GCI said. Alaska Communications suggested splitting the proceeding into two phases, the first to decide whether to continue the fund and any contribution changes, the second to tackle distribution changes.

Oklahoma adopted a connections-based contribution method for state USF on an interim basis Thursday. The Oklahoma Corporation Commission voted 2-0, with a concerned third commissioner abstaining, for a proposed order to replace the 6.28% revenue-based monthly fee with a $1.14 per connection surcharge. In Texas, state senators are pushing Gov. Greg Abbott (R) and the Public Utility Commission to act before rates spike for rural customers. Alaska, California and Oregon are mulling changes.

The House Appropriations Committee’s proposed report on the Financial Services Subcommittee-cleared measure to fund the FCC and FTC in FY 2022 seeks further work on changes to USF contribution rules and wants additional study of how municipal broadband can expand connectivity access. The committee was still considering the underlying bill late Tuesday afternoon. Dueling panels of telecom policy officials disagreed on how lawmakers should translate into legislation the $65 billion broadband component in a bipartisan infrastructure package framework President Joe Biden endorsed last week (see 2106240070).

Commissioner Nathan Simington said finalizing new broadband data maps is a “very high priority” for FCC action. It's a “very thorny problem,” Simington said in an interview Wednesday. The FCC had to build out capacities that didn’t exist after Congress “passed the ball,” and acting Chairwoman Jessica Rosenworcel is “working very hard to get it done,” he said. The commissioner has USF concerns and may be open to some changes.