News of the Day

Last Thursday, the Federal Communications Commission (FCC) adopted its annual assessment of whether advanced telecommunications capability is being deployed in a reasonable and timely fashion across the U.S. In addition to deployment, the Report considers broadband affordability, adoption, availability, and equitable access, when determining whether broadband is being deployed in a reasonable and timely fashion to “all Americans.”

The Commission’s Report, issued pursuant to section 706 of the Telecommunications Act of 1996, raises the Commission’s benchmark for high-speed fixed broadband to download speeds of 100 megabits per second and upload speeds of 20 megabits per second – a four-fold increase from the 25/3 Mbps benchmark set by the Commission in 2015.

The increase in the Commission’s fixed speed benchmark for advanced telecommunications capability is based on the standards now used in multiple federal and state programs (such as NTIA’s BEAD Program and multiple USF programs), consumer usage patterns, and what is actually available from and marketed by internet service providers.

The Report concludes that advanced telecommunications capability is not being deployed in a reasonable and timely fashion based on the total number of Americans, Americans in rural areas, and people living on Tribal lands who lack access to such capability, and the fact that these gaps
in deployment are not closing rapidly enough.

The Report also sets a 1 Gbps/500 Mbps long-term goal for broadband speeds to give stakeholders a collective goal towards which to strive – a better, faster, more robust system of communication for American consumers.

A split state Supreme Court ruled the Catholic Charities Bureau Inc. is not exempt from having to pay unemployment tax to cover their employees because the work they do providing services to those with disabilities isn’t primarily for religious reasons.

The court found in its 4-3 decision Thursday that it’s undisputed the group meets one of the requirements to be exempt from the system because it is supervised by the Superior Diocese.

The court found the four sub-entities of Catholic Charities Bureau Inc. involved in today’s decision don’t attempt to share the Catholic faith with participants, nor supply them with any religious materials. It also found the group hadn’t shown how paying unemployment taxes would prevent it from fulfilling a religious function or engaging in any religious activities. The court also rejected the argument that an analysis of the group’s activities crossed a threshold barring the courts from unnecessary entanglement in church matters.

Each Roman Catholic Diocese in Wisconsin has a social ministry arm. The case the court decided today involved the Superior Diocese’s Catholic Charities Bureau and four sub-entities. None of the four is funded by the diocese, instead receiving money primarily through government contracts, and one had no religious affiliation before it asked to be overseen by the diocese.

They provide services for people with developmental or mental health disabilities, including job coaching and placement, food services and other aid.

According to court records, the state ruled in 1972 that the CCB had to pay unemployment taxes on its employees after it self-reported the nature of its work as “charitable,” “educational,” and “rehabilitative,” not “religious.” After a Douglas County Court in 2015 ruled one of the sub-entities of the CCB was operated primarily for religious purposes, the organization asked to have the four subsidiaries involved in today’s decision removed from the state unemployment system.

The 4-3 ruling affirmed an appeals court decision that upheld a ruling by the Labor and Industry Review Commission that the four must continue paying unemployment taxes on their employees.

Since early January 2024, U.S. refinery utilization has decreased 11%, falling as low as 81% during the two weeks ending February 9 and February 16, and briefly dropped below the five-year (2019–23) low. Although U.S. retail average prices for gasoline and diesel are below 2023 prices for this time of year, decreasing regional inventories for the major U.S. refining regions increased retail prices for both fuels last month.

The sharp decline in refinery utilization is the result of reduced plant operations in both the Midwest and Gulf Coast regions and more intense seasonal patterns. The decline is also affecting inventories.

The U.S. Gulf Coast (PADD 3), the area with the largest drop in refinery utilization, has been the primary source of overall reduced U.S. refinery runs. Since the first week of January, U.S. Gulf Coast four-week average refinery utilization has decreased 14%, falling below 80% for the past two weeks. The reduced refinery runs are likely the result of weather-related issues stemming from cold temperatures, as well as planned maintenance. Weatherization against extreme cold is less common on the Gulf Coast compared with other regions, such as the Midwest, and a lack of winterization can contribute to power outages or damage to instruments, resulting in temporary shutdowns.

The current Gulf Coast refinery maintenance started earlier than normal and has had a larger impact on refinery operations. Trade press indicates maintenance shutdowns are underway at the Motiva Port Arthur and Marathon Galveston Bay refineries, which together account for about 7% of total U.S. capacity, or more than one million barrels per day of processing capacity. Planned refinery maintenance is typically seasonal and generally peaks during late February and March.

In the Midwest (PADD 2), bp’s refinery in Whiting, Indiana, (the largest refinery in the Midwest) was taken offline because of an unplanned outage. This outage is also a major source of reduced utilization nationwide and the driving force behind a 10% drop in Midwest regional refinery utilization since the first week in January.

Lower refinery production has led to decreased inventories of both motor gasoline and diesel (defined as distillate fuel oil with sulfur content under 15 parts per million) in the United States. In the Midwest, high refinery runs at the end of 2023 and logistical limitations on moving gasoline and diesel out of the region increased regional inventories of both fuels at the end of last year. Inventories started the year near or above five-year highs through early February. On the U.S. Gulf Coast, inventories also started the year at above-average levels but have since decreased significantly as refinery utilization has dropped. Inventories of both gasoline and diesel dropped below their 2023 levels.

A plan to widen Interstate 94 in Milwaukee has received federal approval.

The Wisconsin Department of Transportation announced Friday that the plan received an OK from the Federal Highway Administration. The state DOT will now move on to final design and construction.

The project will widen I-94 from six to eight lanes along a 3.5 mile stretch between 16th and 70th streets on the city’s west side. Along with adding lanes, the project includes road modifications that will eliminate left-hand exit and entrance ramps and “right-sizing” the Stadium Interchange.

The state DOT wants to begin construction in late 2025. The project is expected to cost $1.2 billion.

Consumer prices rose at faster monthly and annual rates in February, according to inflation data released Tuesday by the Labor Department.

The consumer price index (CPI), a closely watched gauge of inflation, rose 3.2 percent annually in February and 0.4 percent last month alone.

More than 60 percent of February’s monthly increase in prices came from gasoline and shelter, the Bureau of Labor Statistics explained Tuesday.

The February inflation data also keeps the Federal Reserve on track to keep interest rates steady at the end of a policy meeting next week. While the Fed projected in Decemeber several rate cuts, the strength of the U.S. economy has iced those plans for now.

On March 1, a federal district judge in Alabama ruled that the beneficial ownership information (BOI) reporting required under the Corporate Transparency Act (CTA) is an unconstitutional exercise of Congress’s enumerated powers.

The judge granted summary judgment to the plaintiffs in the case of National Small Business United d/b/a the National Small Business Association, et al v. Janet Yellen. In a separate order, the judge enjoined FinCEN from enforcing the BOI against the plaintiffs. FinCEN announced they will comply with the court’s order and not enforce BOI reporting against entities that are members of the National Small Business Association as of March 1, 2024.

It is very likely that the government will appeal the decision to the 11th Circuit Court of Appeals.

What now?

Most companies can take a wait-and-see approach to the BOI litigation — and that’s because, for entities established before January 1, 2024, the required BOI reporting date is not until January 1, 2025.

For entities established on or after January 1, 2024, they only have 90 days from creation under state law to file an initial BOI report.

This means those entities that were not members of the National Small Business Association as of March 1 will need to decide whether to 1) move forward with filing the BOI report or 2) hope another court or Congress provides relief to the BOI filing requirements. Otherwise, they could face civil or criminal late filing penalties under the current BOI rules.

U.S. employers added 275,000 jobs in February and the unemployment rate ticked higher, the Labor Department reported on Friday.

Job growth was driven by the hiring of health care and government employees, along with food services. On the flip side, the manufacturing sector cut 4,000 positions.

Average hourly earnings, a key measure of inflation, increased 0.1% for the month and climbed 4.3% from the same time one year ago. Strong job growth combined with rising wages is fueling inflation, according to some economists.

On Tuesday, The Consumer Financial Protection Bureau (CFPB) finalized a new rule to cap all credit card late fees at $8, which will apply to the country’s largest credit card issuers, covering those with more than 1 million open accounts.

Banking and credit card companies have started reacting to a new Biden administration rule that puts an $8 ceiling on credit card late fees.

“Today’s flawed final rule will not only reduce competition and increase the cost of credit, but will also result in more late payments, higher debt, lower credit scores and reduced credit access for those who need it most,” American Bankers Association President and CEO Rob Nichols said.

Ranking Senator Tim Scott, R-S.C., announced plans in a media statement Tuesday morning to fight the new rule and its implementation.

“While lowering the cap on late penalties may sound like a good talking point, in practice it will decrease the availability of credit card products for those who need it most, raise rates for many borrowers who carry a balance but pay on time, and increase the likelihood of late payments across the board. Lawful and contractually agreed upon payment incentives promote financial discipline and responsibility,” Scott said in the press release.

“Ultimately, these commonsense practices protect consumers’ access to credit and enable a wider range of services,” the senator expanded. “To continue delivering for those who need it most, I will be using the Congressional Review Act process to fight the implementation of this rule.”

Governor Tony Evers signed a bill into law Monday that will expand the state’s tax credit for child care expenses.

The measure signed by Evers will allow Wisconsinites to claim up to 100 percent of the federal tax credit for child and dependent care on their state taxes starting in the 2024 tax year.

Previously, state filers could only claim 50 percent of the federal income tax credit, which applies to money spent on care for a child under 13 or on care for a disabled person.

The changes will increase the maximum credit a Wisconsin filer could claim from $525 to $3,500 for a single dependent, and from $1,050 to $7,000 for multiple dependents.

The changes will affect more than 110,000 taxpayers, with an average benefit of over $656, according to the Governor’s Office.

In a statement, Evers called the cost of quality child care “too darn high,” and said the credit is one step toward keeping parents in Wisconsin’s work force.

“Signing this bill today will go a long way toward defraying yearly family expenses on child care, giving Wisconsinites some breathing room in their household budgets and making sure our kids have the early support and care they need,” the governor said in written statement, following a Monday morning ceremony at La Casa de Esperanza, a community center and charter school in Waukesha.

The expanded credit, which received bipartisan support from state lawmakers, will cost the state an estimated $73 million in revenue in the 2025 fiscal year, according to Wisconsin’s Legislative Fiscal Bureau.

On Monday, the Federal Trade Commission (FTC) sued to block the largest proposed supermarket merger in U.S. history—Kroger Company’s $24.6 billion acquisition of the Albertsons Companies, Inc.—alleging that the deal is anticompetitive.

The FTC issued an administrative complaint and authorized a lawsuit in federal court to block the proposed acquisition pending the Commission’s administrative proceedings. A bipartisan group of nine attorneys general is joining the FTC’s federal court complaint.

Kroger operates thousands of stores across 36 states, which includes regional banners such as Fred Meyer, Fry’s, Harris Teeter, King Soopers, Kroger, and Quality Food Centers (QFC). Albertsons also operates thousands of stores across 35 states under regional names including Albertsons, Haggen, Jewel-Osco, Pavilions, Safeway, and Vons. If the merger were completed, Kroger and Albertsons would operate more than 5,000 stores and approximately 4,000 retail pharmacies and would employ nearly 700,000 employees across 48 states.

To try to secure antitrust approval of their merger, Kroger and Albertsons have proposed to divest several hundred stores and select other assets to C&S Wholesale Grocers (C&S), which today operates just 23 supermarkets and a single retail pharmacy. The FTC’s administrative complaint alleges that Kroger and Albertsons’s inadequate divestiture proposal is a hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together and falls far short of mitigating the lost competition between Kroger and Albertsons.

The FTC says the proposed divestitures are not a standalone business, and C&S would face significant obstacles stitching together the various parts and pieces from Kroger and Albertsons into a functioning business—let alone a successful competitor against a combined Kroger and Albertsons. The proposal completely ignores many affected regional and local markets where Kroger and Albertsons compete today. In areas where there are divestitures, the proposal fails to include all of the assets, resources, and capabilities that C&S would need to replicate the competitive intensity that exists today between Kroger and Albertsons. Even if C&S were to survive as an operator, Kroger and Albertsons’s proposed divestitures still do not solve the multitude of competitive issues created by the proposed acquisition, according to the complaint.