The USF contribution factor could spike in Q3 from 17.4 percent to 19.6 percent or more of carriers' U.S. interstate and international (long-distance) telecom end-user revenue, said industry consultant Billy Jack Gregg in his quarterly email update. He cited Universal Service Administrative Co. projections of increased USF demand, particularly for E-rate school and library discounts, as the driver, and said the contribution (or assessment) factor could go even higher if projected industry revenue declines, as it has been trending. A 19.6 percent factor would be "the highest assessment factor ever." The previous high was 18.2 percent in Q1 of 2016, he said Wednesday. Some reacted to us with concern.

A draft item that would review nearly all of the FCC’s media regulations is hugely broad and likely will loop in controversial topics such as retransmission consent alongside narrower procedural rules, broadcast and pay-TV attorneys told us Thursday, after the draft public notice on the review was released. The Modernization of Media Regulation PN is planned for a vote at the commission’s May 18 meeting, as is a draft NPRM on eliminating the main studio rule for TV and radio broadcasters. Though the review item excepts media ownership and accessibility rules from the review, it includes every other media rule, according to the draft PN. Media entities likely will treat the proceeding “like a wish list,” asking the FCC to do away with every rule they don’t like, said Fletcher Heald broadcast attorney Frank Jazzo. FCC Chairman Ajit Pai announced both draft items at NAB 2017 (see 1704250065). Pai also is seeking votes on an open internet NPRM (see 1704270044) and on smaller wireless, wireline and satellite items at the meeting.

Telecom companies urged convening of state USF contribution revamp workshops in Nebraska, even if they delay the Public Service Commission's proposed adoption of a connections-based mechanism (see 1703280032). CenturyLink, Cox Communications and Level 3 sought workshops, in reply comments dated April 21 and posted Wednesday at the PSC (NUSF-100). “It is abundantly clear that more information must be presented before a connections-based mechanism can be safely implemented,” and it’s OK if that causes the PSC to miss a self-imposed Jan. 1 deadline for action, Cox said. "Stabilization of the fund can be achieved in 2018 under the current methodology while a thoughtful, reasonable connections-based methodology is created.” In another reply, CTIA said the PSC shouldn’t adopt USF changes now but instead should urge the Federal-State Joint Board on Universal Service to craft a plan for all states. "Nebraska is not unique in seeing declining revenues for its universal service program,” CTIA said. “Other states are seeing similar trends,” but the Nebraska PSC is alone in proposing "a novel contribution mechanism,” it said. However, a rural independent company -- Great Plains Communications -- replied that the PSC should reject calls for delay. “Any such delay should not occur since the Commission has already amply demonstrated that NUSF contribution reform is an urgent matter due to the continued erosion of the NUSF remittances generated by the current NUSF contribution mechanism.”

AT&T is under fire in California and Ohio for allegedly neglecting low-income households as the carrier deploys fiber-to-the-home (FTTH) broadband service. AT&T targeted wealthier communities for its fiber-to-the-home service in California, said the Haas Institute at the University of California, Berkeley in a Tuesday report. An earlier National Digital Inclusion Alliance report alleged AT&T denied high-speed internet access to low-income neighborhoods in Cleveland. Citing the NDIA data, a civil rights law firm Monday threatened a lawsuit against the company. Future research could look at whether the reported income disparity is a nationwide issue for AT&T, said Berkeley doctoral candidate Garrett Strain, the report’s co-author, on a media conference call.

AT&T is under fire in California and Ohio for allegedly neglecting low-income households as the carrier deploys fiber-to-the-home (FTTH) broadband service. AT&T targeted wealthier communities for its fiber-to-the-home service in California, said the Haas Institute at the University of California, Berkeley in a Tuesday report. An earlier National Digital Inclusion Alliance report alleged AT&T denied high-speed internet access to low-income neighborhoods in Cleveland. Citing the NDIA data, a civil rights law firm Monday threatened a lawsuit against the company. Future research could look at whether the reported income disparity is a nationwide issue for AT&T, said Berkeley doctoral candidate Garrett Strain, the report’s co-author, on a media conference call.

FCC Chairman Ajit Pai slammed Universal Service Administrative Co. E-rate oversight and urged improvements in the USF school and library discount program, which he said still has "serious flaws," despite previous remedy efforts. Pai said USAC's online E-rate Productivity Center (EPC) portal to process applications "is still not adequately functional," forcing critical steps to be carried out over a legacy IT system. "EPC implementation issues have created major headaches for applicants," many of whom "are still waiting for funding commitment decision letters for funding year 2016," he said in a letter to USAC CEO Chris Henderson listed in Wednesday's Daily Digest. "USAC has failed to fulfill specific commitments made to applicants even as it rolled out EPC system upgrades. USAC has frequently failed to devise solutions for applicants, instead requiring extensive FCC involvement, including from my office, to resolve problems." He also said $30 million has been spent on EPC despite an original estimate of $19 million, and the total cost could spike to "$60 million or greater." Telcos complained last year about EPC functionality (see 1607200074). Pai said USAC's "lack of full transparency" is compounding the various problems. "The current state of affairs is unacceptable. I seek your unqualified commitment that USAC will administer the E-Rate program in a manner that fully complies with Commission direction; works for applicants and participants; and promptly apprises the FCC of all relevant information concerning implementation," he wrote Henderson. Pai urged USAC to "swiftly resolve issues that continue to plague the system," with a focus on supporting and completing "basic EPC functionality" before addressing "ancillary" issues; to "be fully transparent and accountable to the Commission"; and "to identify alternative options to assist applicants" when IT failures occur, including through manual efforts by USAC or a contractor, if necessary. He asked USAC to devise a plan of action by May 18. USAC didn't comment.

The FCC told the Universal Service Administrative Co. to reserve 100 percent of the E-rate funds it needs to cover three categories of potential funding disbursements: "(1) pending applications; (2) funding that has been committed but not yet disbursed; and (3) appeals pending with USAC and the Commission." Noting USAC had been reserving some funds for older appeals on an ad hoc basis despite a 2014 FCC letter's guidance, the commission said it sought to clarify various instructions to "provide a clearer and more consistent E-rate fund reserve practice for USAC" to implement. "The direction to reserve 100 percent for the above-referenced categories alters the 2014 Letter guidance that generally instructed USAC to not reserve funds for pending applications that are older than three years and pending appeals," said FCC Managing Director Mark Stephens in a letter to USAC listed in Tuesday's Daily Digest. "We know that not all funding applications are granted, not all committed funds are disbursed and not all pending appeals are granted. However, we have determined that a 100 percent reserve rate is the most consistent and transparent way for USAC to track needed funds and provides certainty that there is available funding for disbursements." Stephens gave other guidance details, including on "carry forward procedures" for the accounting of unused funds. USAC didn't comment.

Senate Commerce Committee Chairman John Thune, R-S.D., offered support last week for public broadcasting funding during one of his appearances throughout his home state, during Congress' two-week recess period. Public broadcasting “has a big following, not only here in South Dakota but across the country,” Thune, a member of GOP leadership, said during a town hall, video of which was posted by the Aberdeen American News. “And it delivers services and news and information in places around the country where sometimes it’s hard to find other sources.” Eliminating CPB funding was included in the Trump administration’s FY 2018, which Senate and House GOP appropriators opposed (see 1704040079). Thune said White House proposals tend to be considered differently once Capitol Hill appropriators act, and Congress has the key role in determining funding. "That’s usually a very different discussion from a budget that comes forward from the administration," Thune said. He resisted needing to "do away" with certain programs but said there may be a need to seek cost savings to make them operate more efficiently. Thune also noted his focus on 5G as part of his Mobile Now bill, which is “awaiting action on the Senate floor.” Some speculate the bill may face Democratic holds but none is confirmed. Thune told town hall constituents of the need for more spectrum and the large fraction held by the federal government. There’s a need to “share it, allocate it differently, find new frequencies, all sorts of things,” Thune said. “I’m hoping if we can get [Mobile Now] cleared through the Senate, we can get it cleared through the House and on the president’s desk.” Lawmakers are still “waiting to see” the administration infrastructure proposal but it will “hopefully” address broadband, he said. He also addressed Mobile Now last week in speaking to students at Dakota State University in Madison.

Senate Commerce Committee Chairman John Thune, R-S.D., offered support last week for public broadcasting funding during one of his appearances throughout his home state, during Congress' two-week recess period. Public broadcasting “has a big following, not only here in South Dakota but across the country,” Thune, a member of GOP leadership, said during a town hall, video of which was posted by the Aberdeen American News. “And it delivers services and news and information in places around the country where sometimes it’s hard to find other sources.” Eliminating CPB funding was included in the Trump administration’s FY 2018, which Senate and House GOP appropriators opposed (see 1704040079). Thune said White House proposals tend to be considered differently once Capitol Hill appropriators act, and Congress has the key role in determining funding. "That’s usually a very different discussion from a budget that comes forward from the administration," Thune said. He resisted needing to "do away" with certain programs but said there may be a need to seek cost savings to make them operate more efficiently. Thune also noted his focus on 5G as part of his Mobile Now bill, which is “awaiting action on the Senate floor.” Some speculate the bill may face Democratic holds but none is confirmed. Thune told town hall constituents of the need for more spectrum and the large fraction held by the federal government. There’s a need to “share it, allocate it differently, find new frequencies, all sorts of things,” Thune said. “I’m hoping if we can get [Mobile Now] cleared through the Senate, we can get it cleared through the House and on the president’s desk.” Lawmakers are still “waiting to see” the administration infrastructure proposal but it will “hopefully” address broadband, he said. He also addressed Mobile Now last week in speaking to students at Dakota State University in Madison.

Consumers should play a role in filtering out fake news across social media platforms and other websites, said a wide range of experts on news literacy. They said such literacy is an essential component and perhaps the best way of fighting fake news.