The USF contribution factor has “gone up really through the roof” and “led to a pretty vibrant debate right now about what the future of the universal service is going to be funded going forward,” said Keller and Heckman partner Casey Lide during a firm webinar Thursday. The telecom lawyer noted some groups sought direct congressional appropriations to fund USF, while others urged the FCC to include broadband internet access service revenue in the contribution base. Consumers’ Research’s challenge of the USF contribution factor in the 5th U.S. Circuit Court of Appeals based on the nondelegation doctrine could “force the hand on this kind of reform discussion,” he said (see 2301180054). If the court finds in favor of the petitioners, “it's undoubtedly going to go before the Supreme Court,” Lide said: "This Supreme Court could well uphold that [and] if that happens, then you're in a scenario where the universal service program is effectively gutted by judicial process.”

The FCC provided "no evidence" that it "actually reviewed and accepted" the Universal Service Administrative Co.'s figures for the Universal Service Fund 2021 Q4 contribution factor, Consumers' Research told the 6th U.S. Circuit Court of Appeals. The commission "couldn't even be bothered to issue a separate approval document," the group said in a letter posted Monday in docket 21-3886. The group said such "rubber stamping" violates the private nondelegation doctrine, citing the court's recent ruling in Oklahoma v. United States regarding the FTC' and the Horseracing Authority. The FCC disagreed in a letter posted Monday, saying USAC is "subordinate to a federal agency" and the commission "exercises extensive oversight." USAC "has no rulemaking or policy-making authority," the FCC said.

T-Mobile seeks to cloak its "private concern” with a change to California USF “in the language of equity and solicitude for low-income Californians,” the California Public Utilities Commission said Monday at the U.S. District Court of Northern California. T-Mobile and subsidiaries seek a preliminary injunction to stop the CPUC’s October decision to switch to connections-based contribution from taking effect April 1 (see 2302020058). Opposing that motion in case 3:23-cv-00483, the CPUC said T-Mobile lacks standing and fails to show California’s connection-based surcharge violates federal law.

T-Mobile will take California regulators to federal court over a decision to switch state USF contribution to a connections-based mechanism. In a complaint Wednesday against the California Public Utilities Commission (case 3:23-cv-00483), T-Mobile and subsidiaries urged the U.S. District Court of Northern California to preliminarily enjoin a $1.11 monthly per-line fee from taking effect April 1. A consumer advocate scoffed Thursday at T-Mobile’s claim that the order hurts low-income households.

Broadband industry officials Wednesday stressed the need for Congress to take an active role in broadband deployment and adoption efforts, before NTIA's broadband, equity, access, and deployment program and other recent federal investments. Some during a Broadband Breakfast webinar emphasized the role of fiber as states consider their plans and proper vetting of the FCC's new broadband maps.

A coalition of industry groups and consumer advocacy organizations filed separate briefs Thursday in support of the FCC in the Consumers’ Research case challenging the USF contribution factor in the 11th U.S. Circuit Court of Appeals (docket 22-13315). USTelecom, NTCA, and the Competitive Carriers Association requested that the court hear oral argument. The groups said Consumers' Research "exaggerate[s] every aspect of this case," including the Universal Service Administrative Co.'s "role in determining quarterly contribution factors." The Schools, Health & Libraries Broadband Coalition, Benton Institute for Broadband & Society, National Digital Inclusion Alliance, and MediaJustice also filed a brief in support of the FCC. "Petitioners cannot circumvent their timeliness problem through a manufactured challenge to this ministerial public notice," the groups said, claiming the challenge is instead an "untimely review of the constitutionality of the entire Universal Service Fund."

USTelecom asked Congress to "stay closely engaged" with the Biden administration and states to ensure broadband funding from the Infrastructure Investment and Jobs Act results in "maximum program effectiveness," in a letter Tuesday. The group is seeking legislation to "help ensure timely infrastructure permitting" and "appropriate oversight" of grant recipients. It also asked that the FCC's affordable connectivity program be made permanent: "While most customers enjoy faster speeds and lower broadband prices, those struggling financially need additional assistance." Congress should work with the FCC to expand the contribution base for the USF, USTelecom added, noting edge providers and platforms are "the greatest beneficiaries of high-speed networks." The group also sought action on public-private cybersecurity partnerships, privacy protections and eliminating the tax on federal broadband grants.

Consumers’ Research filed another legal challenge to the FCC’s Universal Service Fund, this time against the Q1 2023 contribution factor, in the 6th U.S. Circuit Court of Appeals. The group has another challenge in the 6th Circuit against the Q4 2021 contribution factor, plus a case in the 5th Circuit against the Q1 2022 factor, and a challenge in the 11th against the Q4 2022 factor. Oral argument was held in the 5th Circuit case earlier this month (see 2212060070), and the FCC filed a response brief in the 11th Circuit last week (see 2212230007). The latest filing takes a similar tack to Consumers’ Research’s other cases, arguing that the USF contribution factor is an unconstitutional tax because it's imposed by the FCC rather than Congress, and that the FCC has violated the Administrative Procedure Act. The group is likely challenging the contribution factor in the same circuit as an ongoing challenge to provide a backstop if the other 6th Circuit case is dismissed or rejected for narrow procedural reasons, said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman, who has filed in support of the FCC in other Consumers’ Research cases. Consumers’ Research didn’t comment. The new case likely won’t be briefed or move forward while the other 6th Circuit one is ongoing, Schwartzman said.

Consumers' Research's petition for review of the FCC's Q4 2021 USF contribution factor is untimely and its claims "lack merit," the commission told the 6th U.S. Circuit Court of Appeals in a brief posted Tuesday in case 21-3886. The commission's authority to delegate the Universal Service Administrative Co. with calculating the quarterly factor is "clearly constitutional" because USAC is "subordinate to the commission and assists only in performing the accounting, billing, disbursement, and related functions necessary to operate the program," it said. The FCC asked the court to "not reward petitioners’ disregard for Congress’s comprehensive framework for judicial review of FCC orders by entertaining this petition on the merits." A coalition of industry groups filed a joint brief in support of the FCC and asked the court to reject Consumers' Research's claim that the contributions are taxes rather than fees. Petitioners "exaggerate every aspect of this case" and USAC’s role in determining the quarterly factors, said USTelecom, NTCA, and the Competitive Carriers Association in a joint brief: "The FCC’s regulations demonstrate that USAC exercises no lawmaking authority." The Schools, Health, & Libraries Broadband Coalition, Benton Institute for Broadband & Society, National Digital Inclusion Alliance and Media Justice also asked the court to reject Consumers' Research's challenge, said the intervenors. "Petitioners cannot circumvent their timeliness problem through a manufactured challenge to this ministerial public notice," the groups said, citing the FCC's quarterly notice announcing each factor. Consumers' Research is seeking "untimely review of the constitutionality of the entire Universal Service Fund," the groups said, echoing arguments made by the industry coalition. The 5th Circuit held oral argument earlier this month on the group's challenge of the Q1 2022 contribution factor (see 2212060070).

A three-judge panel on the 5th U.S. Circuit Court of Appeals in New Orleans questioned the procedure of Consumers’ Research’s challenge of the FCC’s method for funding the Universal Service Fund under the nondelegation doctrine, during oral argument Monday. Judges also pressed the FCC on whether Congress should be tasked with setting specific funding limitations and how the FCC reviews the quarterly contribution factor calculations made by the Universal Service Administrative Co.