An $8 Billion Phone Subsidy for Poor Is Targeted by Conservative Group

The $8.6 billion Universal Service Fund, a linchpin of US communications funding since the late 1990s, helps more than 8 million people afford phone and internet service. The conservative advocacy group Consumers’ Research filed lawsuits in three US courts saying the program should be invalidated because its funding is set by regulators, rather than by Congress, which has taxing authority. There’s a high chance one of the courts will strike down the program in 2023, shifting the battle to the Supreme Court, where justices skeptical of US regulatory agencies could hand the challengers a win. If the program is declared unconstitutional “that becomes a catalyst” for Congress to act, said Matthew Schettenhelm, a Bloomberg Industry analyst. “That hikes the risk for big-tech platforms, since one of the most prominent proposals is to make them pay into the program for the first time.” The Universal Service Fund is overseen by the Federal Communications Commission. The program takes in fees from telephone calls by consumers and spends that money to help needy people pay for service, both wireless and fixed lines. It’s also used to build telecommunications networks in hard-to-reach areas, and to connect libraries and rural health care clinics.