5G Fund for Rural America

Broadband-for-all advocates and telecom providers who serve rural areas have spent the last couple of years worried about whether the U.S. Supreme Court would essentially scuttle the Universal Service Fund, which helps to subsidize service in underserved, rural, and remote areas of the country as well as connect libraries and schools across the country.

The denial of equitable access has been a defining feature throughout American history.

The Supreme Court has finally ruled to uphold the constitutionality of the Universal Service Fund, and telecommunications industry groups issued statements en masse praising the Supreme Court’s decision. But as they celebrated the end of the legal battle, they acknowledged there’s still a long road ahead for USF reform.

The Supreme Court ruled that an $8 billion fund that provides telephone and internet service in rural and low-income communities is constitutional, a break from a string of major rulings by the high court that have sharply curtailed the power of federal agencies.

"We are glad to see the Supreme Court uphold the constitutionality of the Universal Service Fund, which is critical for expanding reliable internet access to rural and low-income Americans, schools, libraries, and rural health centers,” said Reps Brett Guthrie (R-KY) and Richard Hudson (R-NC). “The Committee on Energy and Commerce can now turn its attention to reforming the USF so it can continue to provide every American with access to the connectivity they need to participate in the 21st century economy.” 

The clock is ticking until the Supreme Court issues its verdict on the $8 billion Universal Service Fund. Even if USF survives the legal battle, the question remains—what then?

The Universal Service Fund's reliance on a shrinking base of traditional voice services has created an unsustainable contribution rate, prompting industry leaders to call for technology giants to start paying into the fund. While companies like Apple, Amazon, Meta, and Netflix earn an estimated $2,600 annually from each household connected through the USF, they contribute virtually nothing to maintaining that connectivity. The discussion comes as the Supreme Court prepares to rule on a Constitutional challenge to the fund's structure in Federal Communications Commission v.

The government giveth, and the government taketh away? That may be the case for the future of school-bus Wi-Fi, which is currently eligible for E-Rate discount under the Federal Communications Commission’s Universal Services Fund. Whether that will continue is now uncertain due to court cases challenging the validity of the USF funding model. In late March, the U.S. Supreme Court heard arguments on an appeal of a 5th Circuit decision that the Universal Service Fund’s revenue mechanism represents an unconstitutional delegation of legislative authority.

While it’s not common for an Federal Communications Commission issue to face the court of last resort, two combined lawsuits recently heard before the bench—Federal Communications Commission v. Consumers' Research and Schools, Health & Libraries Coalition v. Consumers' Research—could put millions of anchor institutions, rural communities and American families nationwide in real jeopardy of losing connectivity.

Criticism is mounting against the 5G Fund, a long-gestating US government program that would distribute billions of dollars to wireless network operators with the goal of funding the construction of 5G networks in rural areas. Indeed, the issues are so lengthy and complex that T-Mobile has suggested just ending the program altogether.