E-rate/Schools and Libraries Program

It is not controversial to say that the Federal Communications Commission’s (FCC) Universal Service Fund (USF) program is unsustainable. Something must change. Universal Service Fund programs cover the cost of maintaining telephone service in high-cost areas, wiring rural schools, libraries, and healthcare facilities for the internet, and providing devices and services at discounted rates to low-income households.

The fate of the $8 billion Universal Service Fund (USF) now lies in the hands of the Supreme Court, which has the power to determine whether the subsidy program is unconstitutional. The legality issue concerns the Federal Communications Commission’s choice to delegate the administration of USF programs (Connect America Fund, Lifeline, E-Rate and Rural Health Care) to a private third party—the Universal Service Administrative Company (USAC). The Sixth and Eleventh Circuits have already ruled to uphold the constitutionality of the USF’s current funding mechanism.

Former Federal Communications Commission Chairman Ajit Pai said Congress should fund the $8.1 billion Universal Service Fund through annual appropriations. “I do think that the time has come for Congress to shift this to a general appropriation,” said Pai, FCC chairman from 2017 to 2021. “[If USF were funded by appropriation] we wouldn’t have this situation now where we’re essentially getting more and more money from a declining base of contributors.”

Chris Mitchell speaks with Andy Schwartzman, Senior Counselor at the Benton Institute for Broadband & Society, about pressing legal issues affecting telecommunications policy in the U.S.

The Universal Service Fund (USF) has been stuck in legislative limbo as the government wrestles with how to improve the subsidy program. Experts think USF reform could see momentum in Trump’s second term, but how that will pan out is a trickier question to answer. The USF, which supports broadband access and affordability in rural and low-income communities, is made up of four [sic] smaller programs: Connect America Fund, Lifeline, E-Rate and Rural Health Care. One glaring problem with the current USF framework is the shrinking contribution base.

The future of the $8.5 billion Universal Service Fund (USF), which supports broadband access in schools, libraries, and rural communities, hangs in the balance as three critical court cases move forward. In a rare twist, two cases saw oral arguments on the same day, adding a sense of urgency to the outcomes. These decisions could redefine affordable internet connectivity for students, families, and communities nationwide. We summarize each case and outline the stakes for the E-rate and other USF programs. As we await the courts’ decisions, SHLB is not just observing from the sidelines.

The Federal Communications Commission received 2,734 applications from schools, libraries, and consortia of schools and libraries to participate in the Schools and Libraries Cybersecurity Pilot Program, representing $3.7 billion in requests to fund cybersecurity projects during the three-year program. During the application filing window—which ran from September 17, 2024 through November 1, 2024—the Pilot Program attracted applications from all 50 states, Puerto Rico, and the District of Columbia, including schools and libraries in both rural and urban communities.

A bipartisan group of senators is looking into Universal Service Fund (USF) reform and, even better, there are solutions on which both parties can agree.

AT&T subsidiary Wisconsin Bell last recently reiterated its argument to the Supreme Court that telecommunications companies should not be hit with tougher fines for fraudulent reimbursement requests to a major broadband subsidy program. The company is seeking to overturn a Seventh Circuit ruling that found the False Claims Act applies to reimbursements from the E-Rate program, a broadband subsidy for schools and libraries funded by the $8-billion-per-year Universal Service Fund.

Federal Communications Commission Chairwoman Jessica Rosenworcel spoke at the National Congress of American Indians Annual Convention on October 29, 2024. She highlighted some of the important work of the FCC's Office of Native Affairs and Policy, including the new "Missing and Endangered Persons" or MEP alert code. She also highlighted the newly announced Tribal Library E-Rate Advocacy Program, or TLEAP. "We are going to save Indigenous women and girls with our new missing and endangered persons alert code.