Bill to Explore Collecting USF Contributions from Edge Providers Introduced

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Senate Commerce Committee Ranking Member Roger Wicker (R-MS), Shelley Moore Capito (R-WV), and Todd Young (R-IN), introduced the Funding Affordable Internet with Reliable (FAIR) Contributions Act. The legislation would direct FCC to conduct a study into the feasibility of collecting Universal Service Fund (USF) contributions from internet edge providers such as YouTube, Netflix, and Google.

Through the USF, the FCC disburses approximately $10 billion per year to fund broadband deployment to high-cost rural areas, schools and libraries, rural health care facilities, telehealth services, and broadband subsidies for low-income Americans. The USF collects money from telecommunications carriers, set at a percentage of their interstate and international revenues, which carriers usually pass onto consumers in their monthly bills. 

“More consumers are moving to internet-based services,” said Wicker. “This raises concerns about the sustainability of fees collected from consumers’ telephone bills, which support broadband deployment in underserved areas. As online platforms continue to dominate the internet landscape, we should consider the feasibility of Big Tech contributing to the USF to ensure rural areas are not left behind as we work to close the digital divide.”  

“Building out our internet infrastructure is expensive, and we have utilized various sources to pay for it. With communications platforms moving away from telephone networks toward internet heavy platforms, it’s important now more than ever that we start looking at ways that Big Tech can step up and help close the digital divide and secure true universal service,” said Capito.

FCC Commissioner Brendan Carr praised the measure. He called the current USF funding mechanism — a regressive tax on the monthly bills for traditional telephone service, both wireless and wireline — “unfair and unsustainable.”

In a May OpEd for Newsweek, he wrote the payment system is on the edge of collapse. “The FCC has kept it on life support by increasing the tax on consumers’ telephone bills at an accelerating clip,” wrote Carr. “Indeed, that tax recently surged above 30 percent for the first time. This is not sustainable; relying on this model to fund additional infrastructure would strain the system well past its breaking point.” He explained: “it’s like taxing horseshoes to pay for highways.”

Carr called requiring internet edge providers to contribute to the USF “more than fair.” Historically, the businesses that derived the greatest benefit from a communications network paid the lion’s share of the costs, according to the Commissioner. He noted the measure tells the FCC to open a proceeding to look at “ending the charge on consumers’ monthly telephone bills and shifting a fair amount over to Big Tech.” 

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