The Court Did Its Job, Now It’s Time for Congress to Get Millions of Americans Online

The Supreme Court recently provided the Federal Communications Commission a sizable legal win by upholding its Universal Service Fund as constitutional. Established in 1996, the $8 billion fund is the primary coffer for its universal service programs that are aimed to expand telecommunications and broadband services to low-income families, rural areas, schools, libraries, and hospitals. Even with the Fund’s legal troubles solved, USF has simply avoided the frying pan only to jump into the fire. Why? A recent paper from the Digital Progress Institute indicates that “the current trajectory for funding universal service is unsustainable.” The report credits the fund’s current contribution base as the primary culprit, which is tied to “telecommunication services.” Worse, although originally intended to be a business-to-business exchange, USF instead acts as a pass-through tax that we consumers bear as seen as a “USF” line-item on our phone bill. So, what’s the rub? Well, USF’s contribution base is shrinking, which has increased the contribution rate to fund universal service from 11.5% in 2009 to 36% this year. That’s a problem for everyday Americans as this fee is now almost totally borne by the consumer. If driving up the costs for hardworking citizens wasn’t bad enough, it will be harder for the FCC to reach those on the wrong side of the digital divide as those select services that fund USF dry up. We need Congress to step in.

[Joel Thayer is president of the Digital Progress Institute and an attorney based in Washington. Roslyn Layton, PhD, Senior Vice President of Strand Consult and Visiting Researcher at Aalborg University Copenhagen, is an international technology expert focused on the economics, security, and geopolitics of broadband internet technology.]