E-rate/Schools and Libraries Program

The Universal Service Fund (USF) is inefficient, ineffective, and funded by a regressive tax mechanism. Several reforms could improve the program:

The House Commerce Committee's Subcommittee on Oversight and Investigation held a hearing on May 10 discussing federal funding for broadband deployment as part of ongoing efforts to

The Federal Communications Commission quietly won two court cases over the last month that most folks have not heard about. A group of complainants brought a suit against the FCC, saying that the agency didn’t have explicit direction from Congress for the creation of the Universal Service Fund (USF) or the authority to delegate the operation of the USF to a third party.

Studies exploring the relationship between technology in the classroom and students’ outcomes have yielded mixed results. We contribute to the debate by examining the effects of broadband subsidies to schools on school performance measures in Florida. Specifically, using a nearly universal panel of Florida schools in the period 2016-2019, we assess the effect of federal broadband subsidies to schools via the E-Rate program on school grades.

The U.S. Court of Appeals for the 6th Circuit joined the 5th Circuit in rejecting an attack on the constitutionality of the Federal Communications Commission’s Universal Service Fund (USF). The  USF is a critical means of reducing the cost of broadband and other telecommunications services for schools, hospitals and libraries, for low-income consumers, and for residents of rural America. The Benton Institute for Broadband & Society, MediaJustice, and the National Digital Inclusion Alliance are intervenors supporting the FCC in this case.

FCC Commissioner Geoffrey Starks said, “I’m pleased that the Fifth Circuit agreed with what I and many others—including bipartisan members of Congress—have said about the Universal Service Fund. It is constitutional, both in concept and implementation. The Universal Service Fund continues to connect rural communities, schools, libraries, healthcare providers, and low-income households all across the country.

Coming from one of the more conservative courts in the country, this decision is a ringing ratification of the system Congress established to ensure that all Americans have affordable access to telecommunications service and advanced services like broadband. This should not come as a surprise, but once the USF was subjected to a legal challenge, the Benton Institute for Broadband & Society joined with public allies to defend this critical mechanism for ensuring universal broadband.

The 5th Circuit U.S. Court of Appeals upheld the decades-old funding mechanisms governing Federal Communications Commission subsidies, a decision that assures the delivery of billions of dollars in broadband aid across a variety of government programs. The FCC, for more than a quarter-century, has operated this pot of subsidies known as the Universal Service Fund, amounting to roughly $9 billion annually.

The Universal Service Fund is funded  by a quarterly surcharge on interstate and international telecommunications revenue. Each quarter, a private nonprofit known as the Universal Service Administrative Company (USAC) estimates how much money it needs to fund the Federal Communications Commission’s (FCC) myriad universal service initiatives. It also estimates the amount of telecommunications revenue expected to be generated by industry, and from there calculates the surcharge percentage necessary to cover program costs.

The total projected collected interstate and international end-user revenue base to be used in determining the contribution factor for the Universal Service Fund support mechanisms for the second quarter of calendar year 2023 (2Q2023) is $8,761,742,607.