Lifeline/Low-Income Consumers

The Federal Communications Commission's Office of Managing Director (OMD) announced that the proposed universal service contribution factor for the fourth quarter of 2026 will be 0.42 or 42.0 percent. The FCC's Wireline Competition Bureau (WCB), in consultation with the OMD, instructs the Universal Service Administrative Company (USAC) to apply $69 million in unused funds to offset the Schools and Libraries program demand and $56 million in unused funds to offset the Rural Health Care program demand.

In its August meeting, the Federal Communications Commission adopted a Notice of Proposed Rulemaking titled Maximizing Efficiencies in Universal Service Administration Company that looks at changing the rules governing USAC, the Universal Service Administration. USAC is a non-profit corporation that was formed by the FCC after passage of the Telecommunications Act of 1996, which created the Universal Service Fund.

A new "consensus-driven roadmap" on the future of the Universal Service Fund argues that universal service should be understood as an ongoing responsibility, not a goal to achieve, and offers six principles for Universal Service Fund reform.

For low-income Americans, the Lifeline program is not merely a discount—it is essential access infrastructure. With 91% of subscribers preferring mobile wireless service with hotspot capability over fixed broadband, it is clear that mobility is a functional requirement, not a preference, for this population. The current benefit level supports incremental use but falls short of providing the sustained connectivity needed for full, consistent access to telehealth, remote work, and coursework.

The Future of Universal Service Reform Task Force chaired by, Mignon Clyburn and Rachelle Chong, was convened to explore how the nation’s universal service policies should evolve to meet the communications needs of the twenty-first century. Participants represented a broad range of perspectives, including consumer advocates, industry representatives, education and health care stakeholders, public interest organizations, and policy experts.

The Federal Communications Commission adopted a proposal to strengthen the management and administration of the Universal Service Fund (USF) and the FCC’s oversight of the Universal Service Administrative Company (USAC). The proceeding builds on a prior inquiry into improving USAC’s administration of the USF and would launch a comprehensive review to ensure that funds are used for their intended purpose and the administration of those funds is efficient, fair, and cost-effective.

Judges probed the role of the $8 billion-per-year Universal Service Fund and its administrator. Conservative nonprofit Consumers’ Research is challenging the Federal Communications Commission program again, after a defeat at the Supreme Court in 2025. USF supports building and maintaining rural broadband networks, plus voice and internet discounts for low-income households, schools, and healthcare centers.

The Universal Service Administrative Company (USAC) projects a consolidated budget of $68.06 million for the federal Universal Service Support Mechanism in 4Q2026. Direct costs for all support mechanisms total $30.53 million. Joint and common costs (including billing, collection, and disbursement activities) total $37.53 million. Universal Service Support Mechanisms include High Cost, Low Income, Rural Health Care, Schools and Libraries, and Connected Care Pilot. 

The Federal Communications Commission's Wireline Competition Bureau (Bureau) announced the minimum service standards for Lifeline-supported services as required by the 2016 Lifeline Order. The 2016 Lifeline Order established minimum service standards for certain Lifeline-supported services and established annual increases in those standards either in the FCC’s rules or pursuant to calculations set out in the Order and the FCC’s rules. Accordingly, the Bureau announced the minimum service standards for fixed and mobile broadband data usage allowance.

The Federal Communications Commission notified IM Telecom, one of the nation’s largest recipients of federal Lifeline subsidies, that it will no longer be permitted to enroll new Lifeline subscribers. The FCC has taken this action to ensure the integrity of the Lifeline program, which is paid for by an assessment that appears on Americans’ monthly phone bills, after apparently repeated failures by IM Telecom to correct improper and potentially unlawful behaviors in the program.