Lujan, Thune Form Senate Task Force Eyeing USF Revamp

Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., and ranking member John Thune, R-S.D., said during and after a Thursday hearing they’re forming a USF-focused task force to evaluate how to move forward on a comprehensive revamp of the program that may update its contribution factor to include non-wireline entities. Senate Communications members cited several telecom policy matters that intertwine with the push for USF changes, including future funding for the FCC’s affordable connectivity fund and restoring the commission’s lapsed spectrum auction authority.

The task force members are “going to work together to explore” USF “issues and hopefully find a sustainable path forward that delivers for the American people,” Lujan said during the hearing. His office said four other senators agreed to be on the task force: Shelley Moore Capito, R-W.Va.; Amy Klobuchar, D-Minn.; Jerry Moran, R-Kan.; and Gary Peters, D-Mich. Lujan’s aiming to “build on the promise and possibility” of USF programs and examine “how these programs should be updated and improved and expanded to meet” future needs.

“Collecting information” on USF “to make stronger decisions” about a revamp “is going to be what the task force is all about,” at least initially, and to “see how we can find common space to work together” on a solution, Lujan said in an interview. He’s “optimistic” that “now there’s a group willing to take this on” given the attention a USF revamp has drawn on and off Capitol Hill, he said.

Lujan invoked the Funding Affordable Internet with Reliable (Fair) Contributions Act (S-856), which he and former Senate Commerce Committee ranking member Roger Wicker, R-Miss., refiled in March to direct an FCC study of expanding the USF funding pool to include edge providers like Google-owned YouTube and Netflix (see 2303160080). That bill and other already-filed measures are “a good starting point while you continue to gather information,” he said: “What I’ve learned about the Senate is you work to find a window and when that window opens, you have to move. I’m certainly hopeful that this is one of those areas where there’s agreement to move together.”

“Any of the research that’s been done” on USF and S-856’s proposed study “would be helpful” in charting the fund’s future course, Thune told us. “Studying the issue is good, but in the end we need to act and move forward in a way that is consistent with what the data tells us.” A “comprehensive” USF revamp measure may not be ready for passage until after the current Congress ends in January 2025, “although we have a good amount of time left” before that, he said: “Sometimes this stuff can extend too far” into the future “and run out the clock.” The task force will have “a Senate focus” for now, but “if there is interest” among House Commerce Committee leaders like Chair Cathy McMorris Rodgers, R-Wash., and Communications Subcommittee Chairman Bob Latta, R-Ohio, “I wouldn’t rule out” including them in deliberations, Thune said.

Competitive Carriers Association President Tim Donovan praised Lujan and Thune for forming the task force. “USF programs are critical for competitive carriers and the consumers they serve,” Donovan said: “These programs must provide sustainable, predictable, and sufficient support.”

Contributions Expansion?

Wicker noted during the hearing “there seems to be unanimity among the panel that we can’t do without” USF, but “the question is how will we put the money in” the fund and whether to expand the fund’s contribution base to include edge providers. “Big Tech is a primary beneficiary of where we are now” since major social media and streaming platforms are the current primary driver of network traffic, Wicker said: “And yet a disproportionate amount of the contribution to USF comes from landline” phone users.

“The current contribution mechanism is burdening the very people that we should not be burdening: older Americans,” the main group still using wireline phone service, said Public Knowledge Government Affairs Director Greg Guice. PK and other groups advocate “including broadband internet access service revenues in the base,” which would lower the contribution factor “from 30% to 4%.” Incompas President Angie Kronenberg said her group, NTCA and Golden West Telecommunications Cooperative are among those who back that proposal. They believe the FCC can make that change without the need for new legislation.

Boston College Law School professor Daniel Lyons questioned the feasibility of the broadband revenue proposal. “It doesn’t solve the larger … structural problems with universal service that lead to a growing numerator over a denominator that changes on a regular basis, whether you talk about just adding broadband providers or adding edge providers,” he said. It’s “much cleaner to simply make the universal service program an on-budget program through appropriations that would subject the program to a hard budget” and “oversight from Congress,” Lyons said.

Thune cautioned that any USF update “should not be viewed as giving the FCC a blank check to unnecessarily expand” programs that draw on the fund. He warned against the FCC heeding calls to expand the pool of what’s eligible for E-rate funding “outside of Congress’ clear direction” and believes it’s “long overdue for the FCC to undertake a fundamental analysis” of the Lifeline program. He, Klobuchar and other lawmakers refiled the Reforming Broadband Connectivity Act (HR-1812/S-975) in March in a bid to revamp the funding mechanism (see 2303280071).

Senate Commerce ranking member Ted Cruz, R-Texas, said in a written opening statement that lawmakers “need to consider all options to reform the USF, including subjecting it to the appropriations process, eliminating duplicative programs, and preserving only those efforts that demonstrate quantifiable benefits for American consumers.” Cruz asked the GAO Wednesday to give him an updated assessment of the fund’s administration (see 2305100073), citing concerns about funding abuse and a lack of effective oversight of the Universal Service Administrative Co.

Spectrum, ACP Concerns

Senate Commerce Chair Maria Cantwell, D-Wash., noted concerns from PK and others about the FCC’s decision not to award T-Mobile licenses it won in the 2.5 GHz auction after its spectrum auction authority expired in early March (see 2303220077). “We’re basically hurting our own process of getting spectrum out because of this,” she said. The impact to consumers of not issuing these licenses is real, Guice said. T-Mobile “is relying on these to build out its 5G network in a lot of small and rural markets” and will help them “better compete in a market where we have just a handful of providers.”

Twenty small wireless carriers urged Cantwell, Cruz and House Commerce leaders Thursday to “swiftly act” to reinstate the lapsed auction mandate. FCC Chairwoman Jessica Rosenworcel and other stakeholders also renewed pressure on Congress in recent weeks to resurrect the remit (see 2304190069).

“Like all carriers, we depend on auctioned and licensed spectrum to offer the communities we serve the latest wireless innovations and secure and reliable service,” the companies said in a letter to the House and Senate Commerce leaders. “Without increased access to 5G-ready spectrum and spectrum licenses that work for both large and small operators, we jeopardize our country’s wireless leadership and the benefits of wireless connectivity in rural, regional, and nationwide markets.” Congress “can avoid these outcomes by acting swiftly to reauthorize the FCC’s auction authority and advancing spectrum pipeline legislation” the carriers said.

Thune amplified criticisms he and other GOP leaders raised earlier this week about ACP when they sought an FCC Office of Inspector General review of the commission's management of broadband money it received during the COVID-19 pandemic (see 2305080067). He cautioned “against dumping billions” of dollars “of additional funding into this untested program” before lawmakers assess the FCC’s current administration of ACP: “Without such assessment, the FCC is failing to meet its obligations to American consumers.”