FCC’s letter of credit requirement for recipients of rural broadband experiment funding would be “onerous” if applied to Connect America Fund (CAF) Phase II recipients, USTelecom said in comments posted Tuesday in docket 10-90. Rural broadband experiment recipients are required to obtain a letter of credit (LOC) equal to the amount they’ve previously received through the 10-year program, plus the amount scheduled to be dispersed to them over the following year. The LOC must also remain open for 120 days after the program's completion, USTelecom said. For CAF Phase II, the requirement should be “tailored to the amount of money ‘at risk’ annually or at most within a one to two year range,” the filing said. An LOC could be required for the first two years, with no more than one to two years of disbursements protected by an LOC, the group said. USTelecom also agreed with CoBank’s proposal (see 1503230031) to reduce the credit amount only to cover funds to be disbursed over the following year, the filing said.

Sen. Chuck Schumer, D-N.Y., is widely seen to count broadcasters as allies as he likely continues a rise through Senate ranks to lead Democrats after Minority Leader Harry Reid, D-Nev., retires after his current term expires. Schumer, currently the Senate’s third-ranking Democrat, already has Reid’s backing for the top spot and, assuming no other contenders emerge, would take over in early 2017. Reid announced his retirement Friday, inspiring widespread scrambling and early consensus that Schumer is the likeliest candidate to take over the position that may have serious bearing in a variety of telecom issues, including any rewrite of the Communications Act or the next satellite TV reauthorization process.

Industry groups are upset over an FCC policy statement creating what they call “draconian” treble damages for amounts owed to USF and other funds. CTIA, Comptel, NCTA and USTelecom filed petitions for reconsideration and a stay, saying the statement violates notice requirements and the “inflexible” triple damages violates the Communications Act. ITTA filed comments supporting the joint petitions.

USTelecom last week became the first of the major trade associations to challenge the FCC’s net neutrality rules (see 1503230066), but challenges by CTIA and NCTA also are expected, industry officials said. USTelecom is expected to file an additional appeal after the order is published in the Federal Register, which is when the other major trade groups also are expected to file. Net neutrality opponents say there are good reasons the 2015 order, which reclassifies broadband as a common carrier service, will be more broadly challenged than the 2010 order.

Court appeals of the FCC net neutrality order by Alamo Broadband and USTelecom (see 1503230066) are premature, the agency wrote the U.S. Judicial Panel on Multidistrict Litigation Friday. The order doesn't take effect until it's published in the Federal Register, which hasn't happened, said the letter from Deputy Associate General Counsel Richard Welch. The FCC assumes the court that's randomly selected to consolidate both appeals will rule on whether they're premature, the letter said, and the agency plans to file a motion to dismiss both petitions as premature once the court is selected. The FCC’s attempt to justify the reclassification of broadband by pointing to industry investments in mobile voice under Communications Act Title II is “revisionist history” and “simply not borne out by the facts,” CTIA said in a blog post Friday. Wireless carriers’ investment has focused on the “heretofore unregulated market for mobile broadband networks” rather than the regulated voice market, the association said. In the past decade, carriers invested $260 billion in their networks, and another $90 billion purchasing spectrum at auctions, "primarily to handle mobile broadband traffic,” said the group. “Of course, the wireless industry will continue to invest, but the uncertainty generated by the FCC’s action means there will be less investment. And that’s no illusion.” Free Press disputed the argument, in a news release Friday. The group noted, among other things, that the annual growth rate in wireless capital spending between 1993 and 2002, before wireless was classified as a deregulated Title I service in 2007, was more than seven times higher than the annual rate in the following decade. The rate from that decade was seven times higher than the rate from 2003 to 2013, Free Press said.

Release of the FCC net neutrality order brought limited clarity to how the rules and the commission’s accompanying reclassification of broadband as a Communications Act Title II service will affect state telecom regulation, state telecom lawyers and observers said in interviews last week. That lack of clarity largely stems from continued uncertainty about whether the net neutrality rules -- and particularly Title II reclassification -- will survive legal scrutiny, lawyers said. Alamo Broadband and USTelecom filed lawsuits Monday seeking reviews of the net neutrality order at the 5th U.S. Circuit Court of Appeals and the U.S. Court of Appeals for the D.C. Circuit, respectively (see 1503230066). The order faces continued scrutiny on Capitol Hill (see 1503200048).

In unanimously authorizing the beginning of local number portability administrator contract negotiations with Telcordia, FCC commissioners Thursday highlighted the savings from selecting the company’s bid compared with what the current LNPA, Neustar, has been charging.

The draft order authorizing beginning negotiations with Telcordia to be the next local number portability administrator (see 1503040053) is expected to be approved by the FCC Thursday. Details were being negotiated Wednesday, with one commission official saying there were “moving pieces.” If approved, Neustar, the current LNPA, is expected to challenge the decision in court, said those involved in the discussion.

Tennessee Attorney General Herbert Slatery sued the FCC over the order pre-empting portions of North Carolina and Tennessee state laws that restrict municipalities’ ability to deploy government-owned broadband networks. The FCC voted 3-2 Feb. 26 to issue the order, which specifically pre-empts the state laws for the Electric Power Board (EPB) of Chattanooga, Tennessee, and Wilson, North Carolina (see 1502260030). Slatery, a Republican, had been expected to sue the FCC over the order. North Carolina Attorney General Roy Cooper, a Democrat, is expected to sue the agency. It hadn’t received any challenge from North Carolina, said an agency spokesman Tuesday. The FCC is “confident that our decision to pre-empt laws in two states that prevented community broadband providers from meeting the needs and demands of local consumers will withstand judicial scrutiny,” he said.

Verizon General Counsel Craig Silliman said Congress will have to take on net neutrality. Silliman pointed to FCC struggles in finding a legal basis for the rules. “I’m sympathetic -- the FCC is wrestling around some tough legal issues,” he said at Brookings Institution Tuesday. “The irony of all this is Congress could do all this in a two-page bill.”