5G Fund for Rural America

There is currently a policy debate circulating asking who should pay to fund the Federal Communications Commission’s Universal Service Fund. For decades the USF has collected fees from telephone carriers providing landline and cellular phones – and these fees have been passed on to consumers. As landline telephone usage has continued to fall, the fees charged to customers have increased. To fix this, there have been calls to spread fees more widely.

As the Infrastructure Investment and Jobs Act awaits a vote in the House of Representatives later this month, a debate over the future of the Federal Communications Commission's Universal Service Fund (USF) is already starting. Provisions in the infrastructure bill call for the FCC to quickly complete an evaluation of how the legislation will impact how the FCC's achieves the goal of deploying broadband to all Americans. Congress wants to know how the FCC can be more effective in achieving this goal. One brewing USF issue is how we pay for it.

The Federal Communications Commission’s (FCC) Universal Service Fund (USF or Fund) has been one of the nation’s most important tools for connecting our nation, including rural communities, low-income families, schools, libraries, and rural health care facilities. However, the funding mechanism that supports the Fund is under significant duress. The “contribution base” – the revenues used to calculate USF contributions – has declined 63% in the last two decades, from $79.9 billion in 2001 to $29.6 billion in 2021.

Between the American Rescue Plan Act, the Consolidated Appropriations Act of 2021, and the Rural Digital Opportunity Fund (RDOF), billions of federal dollars are pouring in to fuel broadband deployments. But all of these funding sources have one thing in common: they all focus heavily on fixed and fixed wireless deployments.

On March 2, 2021, Senate Commerce Committee Ranking Member Roger Wicker (R-MS) asked Federal Communications Commission Acting Chairwoman Jessica Rosenworcel for a detailed status of funds report for all Universal Service Fund (USF) accounts, including but not limited to the Connect America Fund (CAF), Lifeline Program for Low-Income Consumers, E-Rate - Schools & Libraries Program, and the Rural Health Care Program.

Pressure is rising on the Federal Communications Commission and Congress to rethink the $8 billion Universal Service Fund that subsidizes phone and broadband service, as it teeters on a shrinking budget base. Big phone companies like AT&T, entities that benefit from USF programs, and public interest groups see the Biden administration as a new opportunity to press their case for an overhaul of the funding mechanism.

This is the twenty-third report in a series prepared by federal and state staff members for the Federal-State Joint Board on Universal Service. The findings are reported in seven sections: Section 1 of the report provides an update on industry revenues, universal service program funding requirements, and contribution factors. Sections 2 through 5 provide the latest data on the low-income, highcost, schools and libraries, and rural health care support mechanisms.

The 5G Fund Supporters -- which includes the Multicultural Media, Telecom and Internet Council, Rainbow-PUSH and the NAACP -- asked the Federal Communications Commission to clarify how it plans to ensure that 1) the upcoming 5G mobile broadband subsidy program will accommodate needy areas other than rural, and better ensure 2) that diverse contractors have a chance at the money.

The next leadership team of the Federal Communications Commission must prioritize restoring the agency’s authority to protect consumers and competition in the broadband market. Under the next administration, FCC leadership should quickly commence a proceeding proposing to reclassify broadband as a “telecommunications service” under Title II of the Communications Act of 1934. This reclassification puts the FCC on the firmest legal ground to

Tuesday, November 3, is Election Day. And as you may well be trying to decipher the latest polls to predict who'll be running the federal government for the next four years, policymakers haven't taken a break. Here's a quick recap of the major news of the week.