Universal Service Fund

LICT completed its spinoff of Michigan Broadband on August 31, 2023. The spinoff company is now known as MachTen. LICT, a rural broadband consolidator with operations in several states, withdrew from the Rural Digital Opportunity Fund (RDOF) program due to “substantial cost increases and other significant changes within the organization since we first participated and won in the RDOF public auction.”

The Senate working group tasked with assessing the Federal Communications Commission's Universal Service Fund (USF) collected comments on what it should focus on when considering potential reforms for the program. The USF funding mechanism was developed at a time when home phone service was the predominant method of communication.

Highline completed the construction of “The Thumb” service area, now offering fiber broadband to over 8,000 households in Sanilac, Tuscola, Lapeer, and St. Clair (MI) counties. Highline’s 823-mile fiber optic network was built with a combination of private investment backed by ITC Capital Partners and the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) grant program. While representing 14% of Highline’s total RDOF location commitment, Highline was able to complete this geographic portion of the network in two years rather than by the end of 2027.

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.

A tour of the remaining United States Digital Divide from a home in Quincy (CA) to an unserved farm in Newton (NC) to a home in Troy (AL).  These locations (and more) are from a random sample of BEAD-eligible unserved and underserved locations that are not part of the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) or Alternative Connect America Model (A-CAM) programs. 

We could theoretically reach 94% of the Unserved and Underserved locations nationally. We only miss 750,000 locations. The biggest misses by percentage are Iowa (61% of Unserved and Underserved), Idaho (66%), Illinois, Kansas, and California (all 71%), Minnesota (76%), and Colorado and Nebraska (about 80%). I find it helpful to think about this as a simple math problem: how far the money might go can be estimated by multiplying the number of locations that need service times the average cost to serve them. There are 11.9 million Unserved and Underserved locations nationally.

One of the primary goals in enacting the Telecommunications Act of 1996 was to let anyone enter any communications business—to let any communications business compete in any market against any other firm.

Federal Communications Commission Chairwoman Jessica Rosenworcel announced that the items below are tentatively on the agenda for the September Open Commission Meeting scheduled for Thursday, September 21, 2023. The FCC will consider:

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.

On July 23, 2023, the Federal Communications Commission adopted the Enhanced A-CAM Order, establishing the Enhanced Alternative Connect America Cost Model (A-CAM) program as a voluntary path for supporting 100/20 Mbps broadband deployment throughout the rural areas served by carriers currently receiving A-CAM support and in areas served by legacy rate-of-return support recipients.