Lifeline/Low-Income Consumers

A look at some of the possible changes to the Universal Service Fund (USF):

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.

Earlier this year, a Benton Institute for Broadband & Society survey of low-income households found that 13 percent of Affordable Connectivity Program (ACP) participants (approximately 3 million households) would disconnect their home internet service without the subsidy and 36 percent (or 8.3 million households) would downgrade to a cheaper or slower plan.

A new permanent broadband affordability benefit focused on unconnected households and funded by repurposing the Universal Service Fund's High Cost Programs as they expire can close the digital divide. 

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.

The Federal Communications Commission takes emergency action to ensure continuity of Lifeline service for the Lifeline households formerly served by Q Link Wireless LLC prior to its suspension. The FCC finds good cause exists to temporarily waive certain Lifeline requirements to prevent disruption to certain Lifeline subscribers’ service in the wake of Q Link’s suspension from the Lifeline program.

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.”

The internet plays an essential, everyday role in the lives of Americans. Internet access—both fixed and mobile—is a critical resource that allows individuals and families to participate in work and education opportunities, receive telehealth services, access public benefits and services, communicate with loved ones, and more.  Yet affordability remains one of the primary barriers to reliable broadband access.

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.