Universal Service Fund

Here’s what the Federal Communications Commission will consider at our February open meeting.

In response to Sen. John Thune's (R-SD) oversight letter on issues concerning federal broadband programs, NTCA–The Rural Broadband Association writes:

The Federal Communications Commission's Wireline Competition Bureau (WCB) announced the conclusion of the Connect America Fund Phase II auction long-form application review. There were 195 authorized applicant state combinations, totaling $1.48 billion authorized in 10-year support, covering 708,494 locations in 45 states. Authorized bids included a range of performance tiers, with more than one-half of the winning bids at 100/20 Mbps or higher.

The National Lifeline Association (NaLA) announces the establishment of the National Agent Coalition (NAC), the national trade association for distributors and representatives who conduct in-person enrollment into the Lifeline and Affordable Connectivity Programs (ACP). NAC will serve as a voice for agents, who are on the front lines of bridging the digital divide through these programs. They will support the industry by providing resources for agents, increasing agent impact and ensuring eligible consumers are enrolled.

Reducing the broadband affordability gap is an important and noble goal. Unfortunately, it is far from clear whether Lifeline, the federal program tasked with getting low-income households online, actually addresses this problem. For over a decade, academics, government watchdogs, and independent auditors have criticized the Federal Communications Commission’s inability or unwillingness to measure the program’s effectiveness—while private studies suggest much of this spending may be misdirected toward families at no risk of losing internet access.

Federal Communications Commissioner Chairwoman Jessica Rosenworcel said that using the E-rate program to subsidize mobile hotspot devices is a “great idea” and that there may be some activity on that front in the future. The chairwoman was fielding a comment from a mayor of a Texas city, who said that his jurisdiction has a program that lends out connectivity hubs – allowing others to connect to the device – in parts of the town for residents seeking internet. He asked whether that’s something that the FCC could fund.

The Federal Communications Commission's Wireline Competition Bureau (WCB), in conjunction with the Office of Economics and Analytics (OEA), authorized Rural Digital Opportunity Fund (Auction 904) support for 1,764 winning bids identified. Almost all the winning bids were made by Resound Networks. Resound Networks won bids for the following states: Arizona, Arkansas, Colorado, Kansas, New Mexico, Oklahoma, Texas. Hughes Networks won two bids for the state of Rhode Island.

The year 2023 could prove to be a volatile year for the Federal Communications Commission as it wrestles with a number of lawsuits concerning its Universal Service Fund (USF) program.

On Friday, December 30, 2022, the Federal Communications Commission released its third Communications Marketplace Report. In the RAY BAUM’S Act of 2018, Congress requires the FCC to assess the state of competition in the communications marketplace.

The $8.6 billion Universal Service Fund, a linchpin of US communications funding since the late 1990s, helps more than 8 million people afford phone and internet service. The conservative advocacy group Consumers’ Research filed lawsuits in three US courts saying the program should be invalidated because its funding is set by regulators, rather than by Congress, which has taxing authority. There’s a high chance one of the courts will strike down the program in 2023, shifting the battle to the Supreme Court, where justices skeptical of US regulatory agencies could hand the challengers a win.