The Universal Service Fund (USF) is a vital program administered through the Federal Communications Commission intended to ensure that U.S. residents, educational institutions, and healthcare facilities have access to affordable communication services, including broadband. In May, the FCC proposed capping the total amount it would expend for USF programs and combining two USF programs – the E-Rate and Rural Telehealth programs. This is a bad idea, as it would make it even more difficult to ensure everyone across the country has access to broadband.
Broadband internet access is an essential tool that we use in almost every facet of daily life. American residents need it not just for entertainment (hello Netflix and online games!), but also to do homework, apply for jobs, and utilize government services (like applying for Medicaid or renewing your car’s registration). Unfortunately, there’s a significant digital divide in the U.S. between those who have access to affordable broadband and those who don’t. According to the FCC’s 2019 Broadband Deployment Report, in 2017, 26% of those in rural areas and 30% of those in tribal lands lacked access to fixed broadband.
However, even these low numbers are frequently accused of overestimating the number of Americans with access to broadband, because of faulty reporting mechanisms. The FCC likely underestimates the number of Americans with access to broadband because it deems an entire census block (which can encompass a fairly large geographical area) to be served, even if just one household within that block is served. Most likely, the number of people without access to broadband is much higher. According to Microsoft, over 160 million people don’t use the internet at broadband speeds. That’s almost half of the country. That’s a huge problem. And that’s why members of Congress, the Trump administration, and current FCC leadership have said closing the digital divide is a pressing national priority. Given these facts, it’s confusing that the FCC has proposed capping the USF, since a cap will impede efforts to make sure every U.S. household has access to affordable broadband.
The USF is comprised of four programs that promote universal access to broadband. The Connect America Fund (also known as the High Cost support program) provides funding to broadband providers to build infrastructure in areas (primarily rural) where it’s expensive to do so, but there isn’t a large customer base, so the business case just isn’t there. The Lifeline program partially subsidizes the cost of phone service and broadband for low-income households. The E-Rate program helps provide affordable broadband access for schools and libraries by paying part of the cost, so that all students can connect to the internet, and the Rural Telehealth program supports affordable broadband access for health facilities so that people in rural communities can remotely access medical professionals.
These programs were created at a time when landline telephone service was the primary means of communications. As a result of that legacy, the universal service programs are funded through a fee on landline telephone subscribers. However, with the widespread adoption of mobile phones followed by smartphones, the number of landline subscribers has rapidly dwindled, leading the universal service charge levied on each remaining telephone subscriber to rise dramatically. At the same time, the demand for universal service dollars to support broadband access has risen – and the FCC has responded by modernizing the USF programs to support access to broadband. A shrinking number of landline telephone subscribers cannot support the growing demand for broadband in the USF long-term; the solution isn’t a cap.
By capping the overall USF and combining the E-Rate and Rural Telehealth programs, the FCC would not only grossly violate Congress’s intent to ensure access to communications services for every American at affordable rates, but could also widen, not narrow, the digital divide. Each program within the USF plays its own distinct role in achieving universal access to communications services. A cap could force programs to compete against each other, as some programs would lose funding if demand for another program increased. This is problematic because, again, these programs serve distinct purposes. Residents should not have to worry that their children will either lack the internet they need to learn and be prepared for the workforce or go without the internet they need to access healthcare when they can’t make it to a clinic. These goals are separate, all important, and should not be made to compete.
Rather than capping the universal service fund, the Commission should take action that will actually address the problem of rising universal service charges for landline telephone subscribers. Namely the FCC should broaden the base of support for USF programs by assessing broadband internet access services in addition to landline subscribers. Unfortunately, in 2017 the FCC walked away from its ability to take this common-sense step when it reclassified broadband as a Title I, or “information service,” (only Title II “telecommunications services” – like landline telephone service — contribute to USF). As a result, the FCC eliminated its own authority to make necessary reforms to the USF contribution mechanism. However, if the FCC were to again classify broadband as a telecommunications service, it would actually have the authority to take action that could reduce the USF contribution burden on landline telephone subscribers, while also sustainably funding efforts to close the digital divide.
Internet access is essential for every household – it’s almost certainly how you are reading this blog post right now. To ensure that everyone across the country can benefit from being connected, the FCC should withdraw its proposal to cap the USF and combine the E-rate and Rural Telehealth programs. To retain funding for these vital programs without sticking a declining number of landline telephone subscribers with the bill, the FCC should refocus its efforts on creating actual, useful reforms to contribution mechanisms.