Holiday Happenings: Supreme Court Changes Everything, Universal Service Fund Contributors and Prison Calls

Chevron Doctrine and Net Neutrality – It is not an understatement to say that the Supreme Court decision on June 28, 2024, in Loper Bright Enterprises v. Raimondo, to throw out the Chevron Doctrine will have the most far-reaching impact on telecommunications in decades.  For years, government agencies such as the FCC have increasingly gained power as Courts gave deference to their expertise when they released an order on any ambiguous subject.  If the agency’s reasoning made sense (was not arbitrary and capricious) a court would likely approve it. Going forward, Chevron will be replaced with the Major Questions Doctrine, which means significant ambiguous issues will be decided by a court without deference to an agency.  This has impacted the Net Neutrality Order already.

First, the Sixth Circuit Court determined on June 28, 2024, that it would handle the Net Neutrality case and not transfer it to the DC Circuit:

This case does not present one of those unusual circumstances requiring transfer. Eleven petitions for review challenging the FCC’s order were filed in seven circuits.  All but one of the petitioners oppose transfer.  The D.C. Circuit has some familiarity with the legal classification of broadband through its consideration of prior FCC orders.  But the FCC is vacillating positions on the proper classification of broadband demonstrate that the prior orders do not represent the staggered implementation of a single undertaking.  And, as the D.C. Circuit itself has explained, general familiarity with the legal questions presented by a case is decidedly different from acquaintance with the proceedings that gave rise to the order in suit.” (Six Circuit Court Order 24-7000, released 6-28-24.).

The Court also gave parties until July 8th to file briefs on how the Supreme Court Chevron decision impacts petitions to stay the Net Neutrality Order, scheduled to take effect on July 22, 2024.  The belief here is that a stay is much more likely now.

Should Broadband Providers Contribute to the Universal Service Fund – The debate has raged for several years now, with the contribution base to the Universal Service Fund shrinking as traffic has moved to the Internet, should the Fund be stabilized with broadband Internet service providers required to contribute?  The FCC has continually punted on the issue, including in the Net Neutrality Order.  There, the Commission said it would forbear reviewing this issue as part of regulating the Internet.  However, on June 21, 2024, the Affordable Broadband Campaign & WTA – Advocates for Rural Broadband filed a Petition for Reconsideration, seeking the FCC to reexamine this issue:

The Affordable Broadband Campaign…seeks reconsideration of the decision by the Federal Communications Commission (Commission) in the above-captioned proceeding to forbear from applying the first sentence of section 254(d) and the associated rules insofar as they would immediately require new universal service contributions to be assessed on broadband Internet access service to end users. Specifically, the Affordable Broadband Campaign (ABC) respectfully requests that the Commission not use its forbearance authority in this instance because: (1) the contribution mechanism is not stable or equitable; (2) the declining revenue base for contributions is hindering the ability of the Commission to ensure that universal service is properly evolving to acknowledge the essential role that broadband has in our economy and therefore the criticality of ensuring access for low income families; and (3) the Commission could have referred the issue to the Universal Service Contribution Methodology docket (WC Docket No. 06-122) and actually helped further inform the record at the Commission and “in other bodies. (ABC, WTA Petition for Reconsideration, p. 2).

Prison Phone Rates – The FCC has been implementing the Martha Wright-Reed Act (Act) which directs it to adopt a compensation plan that ensures fair compensation for IPCS (incarcerated people’s communications services) providers and just and reasonable rates and charges for incarcerated people’s audio and video communications services.  To comply with this edict, the Commission is expected to adopt an Order on July 18, 2024, in Docket 23-62 which will do the following for those who are incarcerated:

  • Lower existing per-minute rate caps for voice services by more than half and establish initial interim per-minute rate caps for video communications services, such as video conferencing and video visitation;
  • Simplify the pricing structure by incorporating the costs of ancillary services into the rate caps and prohibiting providers from imposing any separate ancillary service charges on IPCS consumers;
  • Limit the costs associated with safety and security measures that can be recovered in the per-minute rates to only those costs that the Commission finds are used and useful in the provision of IPCS;
  • Allow IPCS providers to offer alternate pricing plans for IPCS;
  • Prohibit IPCS providers from making site commission payments for IPCS and preempts state and local laws and regulations requiring such commissions, subject to a transition period;
  • Revising and strengthening IPCS accessibility requirements for incarcerated people with disabilities; and
  • Strengthening the Commission’s IPCS consumer disclosure rules.