Lifeline/Low-Income Consumers

Senate Majority Whip Dick Durbin (D-IL) and Representative Robin Kelly (D-IL-02) introduced a bicameral bill that would increase access to broadband service for low-income urban and rural Americans.  The Promoting Access to Broadband Act would help states increase awareness and enrollment in the Federal Communications Commission’s Lifeline program and Affordable Connectivity Program (ACP), which provide a monthly subsidy to help low-income households pay for their broadband and telephone service. The bill would:

There have been several lawsuits over the last few years that challenge the legitimacy of the Federal Communications Commission's Universal Service Fund (USF). A suit from a non-profit group called Consumers’ Research argues that USF fees are taxes and that the original creation of the USF was unconstitutional since the Telecommunications Act of 1996 gave the FCC the power to levy taxes.

According to the Federal Communications Commission (FCC), 8.3 million households lack access to high-speed broadband. Providing universal access to communications service—initially voice service and now broadband—has always been a challenge in the United States. Although connecting urban, populated areas is relatively easy, serving sparsely populated rural areas is difficult due to differences in terrain and population density.

I want to start by thanking the Subcommittee for its decision to provide full funding for the Federal Communications Commission in your Fiscal Year 2024 FSGG bill. The work of the FCC matters. I’d like to highlight some the Commission’s recent work, made possible by your support of our budget, under my leadership. First, the Commission’s Affordable Connectivity Program, the largest broadband affordability program in our nation’s history, now helps 21 million households pay for high-speed internet service.

Two broad proposals have been advanced to modernize the Universal Service Fund's contributions system: 1) expanding the contribution base to include revenues from broadband internet access service, and 2) broadening the USF contribution base to include entities including edge providers such as streaming video providers, digital advertising firms, and cloud services companies. The most economically efficient option for reform is to expand the contribution base to include broadband internet access service revenues.

The  Universal Service Administrative Company (USAC) submitted projections of demand and administrative expenses for federal universal service support mechanisms for the fourth quarter of 2023. The Federal Communications Commission's Wireline Competition Bureau, in consultation with the FCC's Office of Managing Director, previously directed USAC to carry forward up to $211.50 million in unused funds from prior funding years to the extent necessary to satisfy funding year 2023 Rural Health Care program demand.

The Institute for Local Self-Reliance estimates that the Affordable Connectivity Program (ACP) will run out of money in 2024.

The National Digital Inclusion Alliance (NDIA) sees reshaping USF as a key potential strategy for achieving digital equity. Five key recommendations for Congress as it considers the future of USF are:

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.

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.