Chairman Pai Remarks on Closing the Digital Divide

Looking ahead, the biggest challenge facing the long-term health of the FCC’s universal service programs is the way they are funded. We are in a unique position to solve this challenge. Here’s how. Back when I was a Commissioner in 2016, I proposed that Congress should authorize a dividend from the sale of wireless spectrum that would go toward closing the digital divide. Whenever the FCC auctioned spectrum for flexible use, we would set aside 10% of the net auction proceeds for the deployment of broadband in unserved communities. I thought it was a good idea then. I think it’s a good idea now. Congress should set aside about $50 billion in revenue from [the C-Band auction] to fund the FCC’s Universal Service Programs for the next five years. The law authorizing this spending would call on Congress to come up with a solution to the eroding contribution base within five years. In the near term, this proposal would allow us to eliminate the USF contribution system—a system which is regressive, wasteful, and often arbitraged. In addition, consumers would get a tax cut in the form of lower phone bills. Five years of breathing room would also give elected officials the time they need to figure out what should come next.