Senate Commerce Committee ranking member Ted Cruz, R-Texas, called Wednesday for Congress to substantially rein in the FCC's autonomy in setting USF spending and creating new programs amid a bicameral working group’s examination of a possible universal service revamp (see 2305110066). “Caught in a dilemma of wanting to further expand USF programs but having already maxed out the level of taxation American consumers can reasonably tolerate, the conversation at the FCC and in Congress has focused on expanding the pool of companies and products subject to” the USF contribution factor, which is effectively a “tax on the working class,” Cruz said in a paper. “This approach is anything but fair to American taxpayers: it would hide the problem of excessive USF taxation rather than fix it and ultimately make tax burdens worse by emboldening further unaccountable spending growth.” Instead, he said Congress should “take charge of defining universal service and deciding where USF funds may go.” Cruz proposes making most USF programs subject to congressional appropriations but believes “it may make sense to keep the High-Cost program within the current” funding framework “given ongoing multiyear commitments to providers.” Congress should eliminate “duplicative” USF spending, including combining the Lifeline program with the currently independent affordable connectivity program, given perceptions that the “federal government has too many broadband programs, and a poor record of coordinating them,” Cruz said. He also proposes curbing the FCC’s expansion of E-rate eligibility, citing concerns about permitting schools and libraries to use program support for off-premises Wi-Fi hot spots and wireless internet services (see 2311090028).
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
Latest News on the Universal Service Fund
Lack of trained tradespeople and onerous permitting procedures could represent major challenges to broadband equity, access and deployment (BEAD) program implementation, speakers said Tuesday at Incompas’ annual policy summit in Washington. The looming end of the affordable connectivity program (ACP) (see 2403040077) is a big wrench in the works of planned BEAD projects, said Evan Feinman, who leads NTIA's BEAD program. He said internet service providers are recalculating project costs, and many planned projects will go into the red as they receive less help covering their operating expenses.
Spreading high-speed internet will remain a key focus for the California Public Utilities Commission in the years ahead, CPUC President Alice Reynolds told Communications Daily during a wide-ranging Q&A. Reynolds addresses broadband funding, affordability issues, state USF and the FCC’s net neutrality rulemaking in written answers to our questions, lightly edited for length and clarity.
The FCC will continue updating Congress about the affordable connectivity program's status in hopes of convincing lawmakers for money to keep it running, Chairwoman Jessica Rosenworcel told reporters Thursday after the commissioners’ open meeting (see 2401250064). The FCC expects the initiative will exhaust its $14.2 billion allocation in April. The Wireline Bureau said earlier this month it would freeze new enrollments Feb. 8 as part of the program's wind-down process (see 2401110072).
The FCC didn't violate the nondelegation doctrine when it used the Universal Service Administrative Co. to calculate quarterly USF contribution factors and administer USF programs, a federal court ruled Thursday. In denying Consumers' Research's challenge of the FCC contribution factor (see 2306220062), the 11th Circuit U.S. Court of Appeals noted "all USAC action is subordinate to the FCC, and the FCC retains ultimate decision-making power."
Telecom companies raised concerns about adding state USF goals on service quality and other issues in comments posted Monday at the Nebraska Public Service Commission. And as the PSC considers sweeping Nebraska USF (NUSF) changes, Charter Communications warned that it might be unlawful to support broadband with a fund designed for telecom services. Small rural companies said the fund should support ongoing costs that make networks expensive in remote areas even after they are deployed.
LA QUINTA, Calif. -- Congress should continue “lifeblood connectivity” provided through the affordable connectivity program (ACP), Pennsylvania Public Utility Commission Chairman Stephen DeFrank said in an interview at this week’s NARUC meeting. Expect broadband, universal service and pole attachments to be key issues for the state PUC in the year ahead, he said. Industry officials debated possible USF changes during a Tuesday panel.
Industry welcomed the FCC's efforts to establish a sustainability framework as part of its review of the future of its USF high-cost programs. Comments posted Tuesday in docket 10-90 showed widespread support for a contribution revamp and ensuring ongoing support for operational expenses remains available.
Verizon, T-Mobile and AT&T told the FCC it should move with care on a 5G fund, especially given the perilous state of the USF. Groups representing small carriers said the fund is critical to connecting millions of Americans on the wrong side of the digital divide. Comments were posted Tuesday in docket 20-32 in response to a Further NPRM approved by commissioners 4-0 in September (see 2309210035).
The FCC’s USF program is in need of “substantial reform,” the Rural Wireless Association said in comments posted Monday in docket 10-90. RWA opposes picking winners through the use of reverse auctions. “In support of the FCC’s universal service goals, the Commission should expeditiously … transition high-cost support for fixed broadband to ongoing support to maintain networks that are deployed with funds from the Infrastructure Investment and Jobs Act and other federal and state grant programs; and … develop a model-based support mechanism for mobile networks,” RWA said.