Lifeline/Low-Income Consumers

According to the Federal Communications Commission (FCC), 8.3 million households lack access to high-speed broadband. Providing universal access to communications service—initially voice service and now broadband—has always been a challenge in the United States. Although connecting urban, populated areas is relatively easy, serving sparsely populated rural areas is difficult due to differences in terrain and population density.

I want to start by thanking the Subcommittee for its decision to provide full funding for the Federal Communications Commission in your Fiscal Year 2024 FSGG bill. The work of the FCC matters. I’d like to highlight some the Commission’s recent work, made possible by your support of our budget, under my leadership. First, the Commission’s Affordable Connectivity Program, the largest broadband affordability program in our nation’s history, now helps 21 million households pay for high-speed internet service.

Two broad proposals have been advanced to modernize the Universal Service Fund's contributions system: 1) expanding the contribution base to include revenues from broadband internet access service, and 2) broadening the USF contribution base to include entities including edge providers such as streaming video providers, digital advertising firms, and cloud services companies. The most economically efficient option for reform is to expand the contribution base to include broadband internet access service revenues.

The  Universal Service Administrative Company (USAC) submitted projections of demand and administrative expenses for federal universal service support mechanisms for the fourth quarter of 2023. The Federal Communications Commission's Wireline Competition Bureau, in consultation with the FCC's Office of Managing Director, previously directed USAC to carry forward up to $211.50 million in unused funds from prior funding years to the extent necessary to satisfy funding year 2023 Rural Health Care program demand.

The Institute for Local Self-Reliance estimates that the Affordable Connectivity Program (ACP) will run out of money in 2024.

The National Digital Inclusion Alliance (NDIA) sees reshaping USF as a key potential strategy for achieving digital equity. Five key recommendations for Congress as it considers the future of USF are:

The Congressional directive in the Telecommunications Act of 1996 is for the Federal Communications Commission (FCC) to ensure that there be specific, predictable, and sufficient Federal and State mechanisms to preserve and advance universal service. The dilemma is that the source of Universal Service Fund (USF) programs is end user (i.e. retail) revenues from international and interstate wireline and mobile services, as well as revenue from providers of interconnected Voice over Internet Protocol (VoIP) services.

As what we can do with the internet has expanded, so too has the way we connect, and how we use it—at home and on the go. In the United States today, it has become the norm for a majority of households to have two types of subscriptions to the internet—mobile data for their phone and fixed (and for the most part) wireline service for their residence. Over 75 percent of households whose annual incomes exceed $50,000 have cellular data and wireline broadband subscriptions. For households below that level, 44.7 percent have both types of subscription plans.

In comments filed with the Senate Working Group on the future of the Universal Service Fund (USF), many organizations underscored the issue of redundant government expenditure in their submissions, with a notable focus on whether the Affordable Connectivity Program (ACP) should be integrated into the USF framework. The USF includes four programs targeting different vulnerable portions of the broadband market: the Connect America Fund, Lifeline, Schools and Libraries (E-Rate) and Rural Health Care.

The Benton Institute for Broadband & Society is greatly concerned with the preservation and advancement of the Federal Communications Commission’s Lifeline program—a vital Universal Service Fund program that must continue to be improved to achieve its goals, broaden its reach, and expand access to those who can benefit the most. Lifeline was created nearly 40 years ago with the aim of providing low-income households with low-cost landline telephony options. Now, nearly all U.S. households have telephone service and the Lifeline program plays an essential role in ensuring affordability.