Universal Service Fund
When it comes to broadband, the Infrastructure Investment and Jobs Act is about more than money. For example, Congress also directed the Federal Communications Commission to consider the impact of the law's $65 billion broadband investment on the FCC's existing broadband support programs under the umbrella of the Universal Service Fund (known to wonks as the USF).
Low-income households are spending too much on connectivity. Prior to the pandemic, the Federal Communications Commission’s Lifeline program supported mainly wireless communication services for low-income households; its $9.25/month subsidy resulting in service plans that restricted voice and data usage. To address Americans’ online connectivity needs during the pandemic, Congress directed the FCC to launch the Emergency Broadband Benefit (EBB) program—a historic expansion of financial support for universal service.
As Congress found in the Infrastructure Investment and Jobs Act, access to affordable, reliable, high-speed broadband is essential to full participation in modern life in the United States. The aim of the Affordable Connectivity Program is to ensure broadband is affordable for any household no matter its income. Although the Federal Communications Commission has met an incredibly tight timeline to adopt rules and launch the new Affordable Connectivity Program, there is still a great deal of work to be done. Here's a quick look at what remains on the FCC's agenda.
Congress created the Affordable Connectivity Program through the Infrastructure Investment and Jobs Act, building on the Emergency Broadband Benefit Program created earlier in 2021. For the EBB Program, Congress provided the Federal Communications Commission with $3.2 billion to make monthly broadband service bills more affordable for low-income households. The Infrastructure Investment and Jobs Act adds an additional $14.2 billion for the Affordable Connectivity Program, while leaving in place the EBB Program's basic framework.
In November 2021, President Joe Biden signed into law the largest U.S. investment ever in broadband access, affordability, and adoption. With $65 billion flowing to broadband, Congress also asked the Federal Communications Commission to determine what impact the Infrastructure Investment and Jobs Act will have in achieving universal service goals for broadband. This week, the FCC launched a proceeding seeking public comment on how to best make sure everyone in the U.S. can use broadband.
How will the Infrastructure Investment and Jobs Act impact universal service policy and, specifically, the Lifeline program? The new law sets up a transition from the Emergency Broadband Benefit, a program that is only six months old, to the new, more permanent Affordable Connectivity Program.
In less than three months, nearly 800,000 low-income people who receive telephone subsidies through the Universal Service Fund's Lifeline program will be negatively impacted by changes scheduled to go into effect at the Federal Communications Commission on December 1, 2021. The FCC needs to change course and help more Americans keep connected to communications services that are essential to navigate the ongoing public health and economic crisis. Most importantly, the FCC should act swiftly and hit the pause button on the 2016 plan to zero-out support for voice-only services.
As the Infrastructure Investment and Jobs Act awaits a vote in the House of Representatives later this month, a debate over the future of the Federal Communications Commission's Universal Service Fund (USF) is already starting. Provisions in the infrastructure bill call for the FCC to quickly complete an evaluation of how the legislation will impact how the FCC's achieves the goal of deploying broadband to all Americans. Congress wants to know how the FCC can be more effective in achieving this goal. One brewing USF issue is how we pay for it.
The Federal Communications Commission’s (FCC) Universal Service Fund (USF or Fund) has been one of the nation’s most important tools for connecting our nation, including rural communities, low-income families, schools, libraries, and rural health care facilities. However, the funding mechanism that supports the Fund is under significant duress. The “contribution base” – the revenues used to calculate USF contributions – has declined 63% in the last two decades, from $79.9 billion in 2001 to $29.6 billion in 2021.
The key findings of this report reflect the need to establish a clearer connection between Federal Communications Commission policy and how Universal Service Administrative Company operationalizes this policy through an FCC-directed Lifeline program strategic plan. Currently no such document exists. This prescriptive document will significantly contribute to the resolution of many of the findings. Broadly, findings, observations, and recommendations span two main categories: