Universal Service Fund

Last week, we covered some of the broadband and digital equity initiatives launched by the states this summer. From digital equity resources in Louisiana to historic investments in broadband infrastructure funding for the Navajo Nation, here are some more notable broadband news bites we've seen from states and Tribal governments around the country.

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.

The Federal Communications Commission proposed reforms to improve the efficiency and effectiveness of its Rural Health Care (RHC) Program.

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 stakes for schools, libraries, and health clinics could not be higher. Last year, the Supreme Court delivered us a historic victory in SHLB v. Consumers’ Research when the Court confirmed that the Universal Service Fund, a bipartisan program with a three-decade-long record of connecting communities across rural and urban America, is constitutional. Today we made sure the Fifth Circuit heard from the anchor institutions and the people who depend on this funding to serve their communities.

The cost of online access for schools and libraries across Alaska could increase dramatically if a long-standing federal subsidy ends. The Federal Communications Commission is reviewing the E-rate program that for three decades has helped schools and libraries across the nation lower their connectivity costs. In the past, FCC Chairman Brendan Carr has suggested the subsidy should be reduced or eliminated. Alaska school leaders and public librarians are worried about a potential cut at a time when districts are already struggling with budget deficits.

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. 

On June 25, 2026, the FCC adopted a Notice of Proposed Rulemaking (NPRM) and a Further Notice of Proposed Rulemaking (FNPRM) seeking comment on a wide array of questions about how to update the E-Rate program to reflect how schools and students actually use the Internet.  This item is part of the FCC’s “top-to-bottom” review of all Universal Service Fund programs to promote efficiency, transparency, and accountability. The E-Rate program was created in an era when many schools and libraries lacked access to the Internet, or service would be too expensive for schools to purchase themselves.

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.