Universal Service Fund

Congress is finally demanding action on the Universal Service Fund.

This report advances the Meaningful Connectivity framework as a way to support more inclusive societies and strengthen digital economies. It measures the gap in the number of people with just basic internet access and those with meaningful connectivity and examines what this digital divide means for people’s online experiences. The framework focuses on four pillars: 4G-like speeds, smartphone ownership, daily use, and unlimited access at a regular location, like home, work, or a place of study.

The goal of universal service is to ensure that essential communications services are available and affordable for all. Equity remains a bedrock principle: the notion that society should take steps to ensure that all (or nearly all) citizens can use communications networks. However, whereas it was once fairly easy to identify the goal—widespread adoption of telephone service—today the situation is not as clear. Should, for instance, “universal service” include internet access? If so, at what level of service?

In addition to making unprecedented funding available for broadband, the Infrastructure Investment and Jobs Act also directed the Federal Communications Commission to study the impact of the new government broadband funding on the Universal Service Fund program. As part of this process, the commission asked stakeholders for their comments on this, and many of those comments – particularly those from service provider associations — had a common thread: The USF program will still be needed, but its contribution system needs reform.

Cable broadband operators are telling the Federal Communications Commission that it should not start making them pay into the Universal Service Fund, especially given the tens of billions of dollars in broadband subsidies the Biden Administration has offered up in COVID-19 and infrastructure laws.

Low-income households are spending too much on connectivity. Prior to the pandemic, the Federal Communications Commission’s Lifeline program supported mainly wireless communication services for low-income households; its $9.25/month subsidy resulting in service plans that restricted voice and data usage. To address Americans’ online connectivity needs during the pandemic, Congress directed the FCC to launch the Emergency Broadband Benefit (EBB) program—a historic expansion of financial support for universal service.

While the recent COVID-response programs are welcomed additions to the effort to connect all people, they are only one part of the total ecosystem required to achieve universal service. The Universal Service Fund continues to be an important part of that ecosystem. Specifically, the Lifeline program’s voice and data and voiceonly subsidies for consumers is not replicated elsewhere, and the Emergency Connectivity Fund program does not reach as far or cover as many needs as the E-rate program. One program does not serve all ends.

The Rural Wireless Association noted that the Universal Service Fund is unsustainable as currently constructed. When the 1996 Telecommunications Act was signed into law, voice telecommunications ruled the day and was the primary service supported by the USF. Circumstances have since changed. An explosion of innovation pushed consumers to use more data and demand higher speeds and lower latency.

Free Press called on the Federal Communications Commission to reinvent its Universal Service Fund (USF) policies so that millions more people can afford the costs of connectivity in the United States. Free Press urged the FCC and Congress to redraft policies crafted in the late 1990s, and last overhauled more than a decade ago, to reflect the sector’s many changes. Free Press wrote, “the good intentions that fueled that effort are no longer a reliable blueprint in a fundamentally changed marketplace.

The Federal Communications Commission adopted a Further Notice of Proposed Rulemaking seeking comment on further reforms to the Rural Health Care (RHC) Program rules to promote program efficiency and ensure that rural healthcare providers receive appropriate levels of funding. Specifically, the FCC is seeking comment on several facets of the RHC Program including: