The Importance of the Universal Service Fund

Benton Institute for Broadband & Society

Monday, August 28, 2023

Digital Beat

The Importance of the Universal Service Fund

Adrianne B. Furniss

On July 27, 2023, the U.S. Senate's Universal Service Fund (USF) Working Group invited public comment on the future of the USF with the stated goal of creating a bipartisan forum to guide education, awareness, and policymaking on the USF. The opportunity to weigh in with the senators has had me thinking about the importance of the USF for bringing affordable broadband infrastructure and services to millions of people around the country. So I'm taking this opportunity to share my thoughts on one of the most important tools in our national effort to reach truly universal broadband.

The State of Universal Service in the U.S.

Congress’ commitment to advancing universal access has long been the foundational underpinning of our Nation's communication system. It has helped make communications services more affordable, more universal, and more empowering for the many previously disconnected Americans it has helped connect. But Universal Service Fund programs haven’t just connected the country with wires or wireless towers, they have helped connect people with vast new personal opportunity—giving a young child the opportunity to interact by phone with her rural grandmother, a Veteran the ability to access vital online government services, a student a connection to a whole new world of digital learning opportunities, and tribal or economically marginalized communities a chance to use vital services like remote medical care, online job training, remote work opportunities, or the critical government services that we all take for granted. 

This goal of universal access to telecommunications is not new—it dates back over 100 years—nor is it unique. Americans throughout our history have understood that universal access to infrastructure and services is a foundational element for advancing the American dream—and helps to make the country more equitable, inclusive, and prosperous. By taking bold steps to extend universal access to education, electricity, postal mail, telephones, and, now, broadband to all Americans, we have defined the American ideal and advanced a more prosperous nation. But now, at a time of near exponential innovation, when broadband access has emerged as an essential tool for almost every aspect of American life, ensuring access for the disenfranchised, to those who can benefit most, has emerged as perhaps the greatest digital challenge of our generation. How we pursue this ideal, and ensure every American—regardless of circumstance or geography—has access to an evolving level of communication services, has become one of the most defining questions of our time. 

In the United States today, nearly all households have telephone service—mainly because of the Nation’s commitment to universal service policy and the success of USF programs.

But inequalities become clear when looking at internet access by income. At the upper end of income distribution, it is the norm to have multiple pathways to accessing the internet. The 2019 American Community Survey shows that three-quarters (75 percent) of households whose annual incomes exceed $50,000 had both a wireline broadband subscription and a cellular data plan. For low-income Americans, the story was very different. Just over one-third (36 percent) of households whose incomes are $25,000 per year or less had both wireline and cellular data plan subscriptions.

These gaps have social and economic consequences. Many key applications are designed with the sophisticated user in mind, on the assumption that these early adopters represent revenue opportunities and can provide valuable feedback on early releases. Early versions rapidly become “designed in” for everyone. Telehealth sessions, relying as they do on two-way video, work better on fast wireline connections with no effective data cap. Messages on mobile devices offer effective follow-up communications on health care issues. Both are necessary for navigating the health care system. Yesterday’s massively open online courses (MOOCs) that distribute educational content to home computers become today’s “Zoom schools” for K-12 education that rely on students having access to large screens for learning. School officials often assume that text messages are the best means to deliver notifications to parents—which, of course, requires the parents to have a mobile device. Participating in a child’s remote learning works best when the household has multiple modes of connectivity.

There is no doubt that in enacting Section 254 of the Communications Act in 1996, Congress intended to give the Federal Communications Commission (FCC) authority to create and administer the Universal Service Fund. Nor is there any doubt that the scope of this authority extended to the FCC’s subsequent creation of the Universal Service Administrative Company (USAC) to facilitate administration of the USF, or that Congress has repeatedly exercised its oversight authority to examine the operation of the USF and USAC without questioning the statutory validity of the USF or USAC.  Even so, some litigants have recently challenged the very existence of the USF and USAC on the grounds that neither were within the scope of the powers created by the Telecommunications Act of 1996, and specifically, Section 254. So I believe it is crucial that Congress clearly state that USF and USAC were fully authorized, and make plain that going forward, Congress intends for USF programs to continue under the FCC’s authority and USAC’s administration.

“An evolving level of services”

In the Telecommunications Act of 1996, Congress defined “universal service” as an evolving level of services that:

  • are essential to education, public health, or public safety;
  • have, through the operation of market choices by customers, been subscribed to by a substantial majority of residential customers;
  • are being deployed in public telecommunications networks by telecommunications carriers; and
  • are consistent with the public interest, convenience, and necessity.

Moreover, Congress asserted the principle that rates should be “affordable,” and that access should be provided to low-income consumers in all regions of the nation.

Although universal service has traditionally meant telephone service—first traditional wireline and then wireless telephony—in 2016, the FCC explicitly said that “broadband has evolved into the essential communications medium of the digital economy.”

In the Report on the Future of the Universal Service Fund, the FCC formally adopted these goals: universal deployment, affordability, adoption, availability, and equitable access to broadband throughout the United States. The FCC also found it unnecessary to embrace a goal focused only on mobile deployment. The FCC believes that its goals of deployment and availability necessarily encompass deployment and availability of both fixed and mobile broadband.

For these reasons, the Benton Institute for Broadband & Society defines equity as what the norm is for most middle- or upper-middle-income households—that is, having both a wireline broadband subscription and a cellular data plan.

For more of my thinking about the Importance of the Universal Service Fund see:

Adrianne B. Furniss is the Executive Director of the Benton Institute for Broadband & Society.

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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By Adrianne B. Furniss.