Lawmakers Have a Unique Opportunity to Modernize the Universal Service Fund

The Senate working group tasked with assessing the Federal Communications Commission's Universal Service Fund (USF) collected comments on what it should focus on when considering potential reforms for the program. The USF funding mechanism was developed at a time when home phone service was the predominant method of communication. As a result, voice service revenues were and continue to be the primary means by which USF’s programs are funded. With this outdated funding framework, a handful of companies and their customers provide nearly all of the funding for the USF. The most efficient and equitable way to reform USF funding and ensure that broadband benefits continue to be available to all is through direct congressional appropriations. Rather than relying on a contribution system that is patently outdated and no longer fits the fund’s original scope and relies on a quickly vanishing revenue stream, Congress should secure annual appropriations that will support the USF programs in a fair, straightforward, and reliable way. However, if ongoing direct appropriations are not possible, then Congress should provide the FCC with the authority to expand the base of contributors to the USF fund to include the types of companies and services that most benefit from expanding broadband availability. Contributions from large technology companies, edge service providers, and others that directly benefit from the nation’s universal service goals will ensure the fund is big enough to continue to support American connectivity needs and the USF’s objectives.