Rural Health Care

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 Federal Communications Commission's Wireline Competition Bureau, in consultation with the Office of the Managing Director (OMD), announces the amount of unused funds for the Rural Health Care (RHC) Program that have been carried forward for funding year 2025. The FCC’s rules for the RHC Program establish a process to carry forward unused funds from past funding years for use in future funding years. The Universal Service Administrative Company (USAC) projects that, as of May 31, 2025, $129.30 million in unused funds is available for use in future funding years beginning in funding year

The Universal Service Administrative Company’s (USAC’s) estimated total Rural Health Care Program demand for Funding Year 2025 is $823.08 million, including the gross demand estimate of $787.21 million for the Telecommunications (Telecom) and Healthcare Connect Fund (HCF) Programs and the projected USAC administrative expenses of $35.87 million.

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 Universal Service Administrative Company submitted the contribution base amount to be used for the third quarter of calendar year 2025 (3Q2025). The total projected collected interstate and international end-user revenue base to determine the contribution factor for the Universal Service support mechanisms for 3Q2025 is $8,045,954,273. 

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.

The Schools, Health & Libraries Broadband Coalition submitted reply comments to the Federal Communications Commission regarding the In Re: Delete, Delete, Delete request for comments. SHLB's reply focused on the Universal Service Fund, and particularly the E-Rate and Rural Health Care programs. "We continue to emphasize that recommendations should ensure that Commission-led initiatives ultimately work to benefit anchor institutions and their communities and streamline the administration of the E-Rate and Rural Health Care programs."