So I’ve been slogging through the reclassification comments. One sharply disputed issue is whether the FCC has authority — in the post-Comcast v. FCC world — to reform the Universal Service Fund (USF) to subsidize broadband. Sounds sexy I know, but it’s actually a huge deal. Here’s why.
The USF is a tax on people’s phone bill that is primarily used to subsidize phone service in rural areas that are expensive to serve. Today, these subsidies are limited to traditional old-school telephone service rather than broadband. The FCC’s National Broadband Plan (NBP) wants to change all that. It proposes to reform the program to subsidize rural broadband networks instead. And rural states — along with their Congressional delegations that are overrepresented in the Senate — really like the sound of that.
The catch, though, is that the FCC may lack the power to enact this politically popular reform because of Comcast. Before Comcast, reforming USF would easily fall within the FCC’s Title I ancillary jurisdiction. After Comcast, that authority’s not so clear.
So here’s the rub. Because USF reform is politically popular, everyone wants the FCC to have authority to enact it. Opponents of reclassification must therefore argue that the FCC retains sufficient ancillary authority even after Comcast. Supporters, by contrast, argue that USF reform is impossible without reclassification (which is a powerful political argument).
So who’s right? Short answer — it’s not clear, and it requires a ridiculously complex analysis. In some parts of the statute, USF support seems limited to “telecommunications carriers.” In other places, though, the statute mentions access to “information services.” On balance, I think the statute doesn’t authorize USF reform post-Comcast, but it’s not a slam dunk.
If anything, though, this lack of clarity strengthens the case for reclassification. Reforming USF under Title I will inevitably trigger a lot of tedious and expensive litigation — and different circuits could easily come to different conclusions. USF reform, though, is merely one piece of the NBP. Under a Title I approach, this same tedious litigation would accompany every single NBP action — delaying urgent reforms for years while US performance continues to fall behind the rest of the world.
To be sure, a future reclassification order will be challenged approximately 3.2 seconds after it’s adopted. But it would be one litigation to resolve everything all at once. Without reclassification, the NBP will die a death of a thousand cuts.
