Universal Service Fund

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.

In this report, the Federal Communications Commission's Wireline Competition Bureau analyzes how the Connected Care Pilot Program and the COVID-19 Telehealth Program impacted healthcare providers’ use of telehealth services. Telehealth took on an increasingly critical role in healthcare delivery during the coronavirus disease 2019 pandemic.

The Alternative Connect America Model (A-CAM) program is a monthly subsidy from the Federal Communications Commission’s Universal Service Fund (USF) that covers about 1.27 million Broadband Serviceable Locations. A-CAM's funding comes from a surcharge on phone bills. But the “contribution base” — the number of phone lines — is shrinking. That means to generate the same amount of money, the percentage of the total phone bill needs to go up. That’s been happening quarter-over-quarter for years.

Residents of Morgantown (PA) became the latest to tap into Windstream’s Kinetic fiber network. But according to Jeff Small, President of Kinetic, Morgantown is just the beginning of Windstream’s plans for 2023. The newest passings in Pennsylvania are a part of Windstream’s national rollout to overbuild fiber on top of its historic DSL footprint. “We’re building 300,000 fiber passings a year,” explained Small. “When you look at the end of 2021, we had 164,000 fiber customers.

US Senators Roger Wicker (R-MS), Ben Ray Luján (D-NM), Todd Young (R-IN), and Mark Kelly (D-AZ), reintroduced the Funding Affordable Internet with Reliable (FAIR) Contributions Act (S.856). The legislation would direct the Federal Communications Commission to conduct a study into the feasibility of collecting Universal Service Fund (USF) contributions from internet edge providers. Among other provisions, The FAIR Contributions Act would:

Nextlink is almost 2 years ahead of schedule in its Federal Communications Commission's Connect America Fund II (CAF II) broadband network construction. Nextlink was supposed to be 40% complete with its $281 million CAF II program construction but has in fact built 70% of its required locations across six states.

Cal.net, a service provider focused on offering fixed wireless access (FWA) and fiber broadband to California’s Central Valley and rural northern California, has a new CEO and new funding.

Congress should extend the worthwhile Affordability Connectivity Program (ACP) promptly by appropriating additional funding. At the same time, it can consider revising the program to better target the ACP benefit to those lower-income households most truly in need and adopting measures to minimize, to the extent possible, any waste, fraud, and abuse in the program. The ACP represents one-half of the federal government's push to make it possible for every American to access a high-speed Internet connection.

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.