Week ending August 7, 2026 — Regulatory Watch

Comments closed Tuesday in the FCC’s high-cost proceeding. The Fifth Circuit heard argument Wednesday on the constitutionality of the Universal Service Fund. The Commission opened a rulemaking Thursday on how USAC is run. The first comments on the KYUP FNPRM arrived Thursday and Friday, ahead of Monday’s deadline.

ITIF and NTCA split on whether to end legacy high-cost support

Comments in WC Docket 26-96, Reforming the High-Cost Program for an All-IP Future, were due August 4.

ITIF’s comments (ECFS), filed by Ellis Scherer and Elizabeth Sanchez, ask the Commission to eliminate CAF BLS and HCLS, let A-CAM I and A-CAM II expire on their existing 2026 and 2028 terms, and reassess Enhanced A-CAM rather than “lock up over $18 billion until 2038.” They price the package at $22.7 billion in reduced high-cost spending through 2031. ITIF’s case is that the mechanisms work against the transition: “Legacy High-Cost support also slows progress toward the Commission’s goal of an all-IP communications environment. Recipients of these subsidies often continue to provide voice service over legacy infrastructure, including copper networks, that can be costly to maintain and may provide lower-quality service than modern broadband platforms.”

The filing also takes up the technology-neutrality question the NPRM raises — how to determine eligible locations when unsubsidized competitors use different technologies, given the Commission’s own finding that satellite reaches 99 percent of locations without terrestrial broadband. ITIF’s answer is to stop classifying locations: “A consumer-directed affordability subsidy would dissolve the eligibility problem entirely because support goes directly to consumers without requiring the Commission to classify locations as eligible based on technology.” The filing does not say who would determine which consumers qualify.

NTCA filed the same day asking for the opposite: extend A-CAM I through 2028, fold the existing mechanisms into a comprehensive Extended A-CAM, give CAF BLS providers a voluntary path into it, and update the cost model to reflect current deployment and operating costs. Mike Romano, in NTCA’s account of the filing: “build on a program that has served rural America well, modernize it to reflect marketplace realities and provide the certainty needed for continued investment in and operation of rural broadband networks.”

State commissions filed in volume. The Nebraska Public Service Commission, the Nebraska Rural Independent Companies and Pinion each filed August 4. Washington filed a single joint comment from three agencies — the UTC, the Public Counsel Unit of the Attorney General’s office, and the State Broadband Office.

ITIF’s filing rests part of its case on the March Report and Order in WC 25-208 and 25-209, the network-modernization item — the same transition handled on the rules side. Replies in 26-96 are due September 3.

Fifth Circuit heard the USF challenge; the Commission opened a USAC rulemaking

A Fifth Circuit panel heard argument Wednesday in Consumers’ Research v. FCC, the renewed challenge to the roughly $8 billion-a-year fund and to USAC, after the Supreme Court reversed the same court in 2025. Reporting from the argument has the judges questioning both the spending and the administrator. A decision is months out.

Thursday the Commission adopted an NPRM in WC Docket 26-173, Maximizing Efficiencies in Universal Service Administration, covering USF administration processes, the structure of that administration, its operating costs, and the role of USAC’s Board of Directors. The Sunshine notice carries it on the same agenda as the direct-to-device spectrum NPRM and the broadcast ownership order.

The KYUP comment round opens Monday

The KYUP FNPRM was published in the Federal Register on July 9. Comments are due Monday, August 10; replies September 8.

The Industry Traceback Group filed Friday in WC 17-97 and CG 17-59. The FNPRM’s account of why the Governance Authority under-enforces is that it relies on “an overly formal reporting process to obtain information,” and the proposed remedy is to require the STI-GA to “establish formal information sharing arrangements with the Industry Traceback Group and call analytics providers to receive information about specific providers’ practices.” ITG is named in the obligation it is commenting on.

TelSwitch also filed Friday, cross-listing WC 26-49 — the numbering docket covering how assigned numbering resources are used, reported and resold — alongside the two KYUP dockets. Upstream-provider diligence and secondary-market number transfer are the same problem, and the Commission is running them as separate proceedings. Mark Dobronski filed Thursday.

The FTC’s AI-accuracy docket drew 52 comments, then the FTC dropped disparate impact

Fifty-two comments were posted Monday and Wednesday to the docket on the FTC’s proposed policy statement on the suppression of accuracy in AI systems, following the July 31 deadline. Twenty-one state attorneys general, led by Massachusetts, wrote that the draft rests on “a flawed premise that the outputs produced by artificial intelligence (‘AI’) models are inherently neutral and reliable.” Reps. Josh Gottheimer and Michael Lawler asked for a narrower fix: “we urge you to add an explicit civil-rights safe harbor to the policy statement.” The Chamber, NRF, CTA, ACLU, NCLC, Public Knowledge, Free Press, TechFreedom and America First Legal all filed in the same round.

On Friday the FTC issued a policy statement on disparate impact by a 2-0 vote, stating that “the FTC will no longer pursue disparate-impact claims in any context” and that it will not bring antidiscrimination claims under Section 5 at all. Chairman Ferguson, in the release: “Disparate-impact claims are nearly impossible to square with our colorblind Constitution.” The twenty-one-page statement mentions AI once, in a footnote quoting a third-party comment from 2020. Disparate impact was the theory under which the FTC could reach algorithmic outcomes — in scoring, verification and fraud decisioning — without proving intent.

Honorable mentions

Somos filed its 2026 toll-free number fee transmittal in WC 26-94 on Monday. (Disclosure: I am VP of Systems Engineering at Somos.)

The Build America: Eliminating Barriers to Wireline Deployments NPRM (WC 25-253) was published in the Federal Register Friday, with comments due September 21 and replies November 5. It proposes a rebuttable presumption that a state or locality has effectively prohibited service if it fails to act on a rights-of-way authorization within 120 days.

Two study-area waiver items moved in WC 10-90 on Thursday: a Stelle Telephone petition and a supplement from Rural Telephone Service Company and Moundridge Telephone. The Bureau’s monthly USAC omnibus, DA 26-762, issued Monday.

Looking ahead

KYUP comments are due Monday, August 10, with replies September 8. Replies in the high-cost proceeding are due September 3. The WC 26-173 comment cycle opens 30 days after Federal Register publication, which will put it near the KYUP reply date. The Fifth Circuit decision has no schedule.