Senate Bill Calls for USF Reform

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Sens. Amy Klobuchar (D-MN), co-chair of the bipartisan Senate Broadband Caucus, and John Thune (R-SD) introduced bipartisan legislation to strengthen the monetary formula for the Universal Service Fund, which promotes universal access to broadband and other telecommunications services.

The USF includes programs to support broadband access in rural communities, facilitate rural health care, and expand access to affordable broadband service for low-income families, schools, and libraries. The USF is largely funded by fees imposed on landlines. As the use of landlines continues to decline, this places a disproportionate impact on seniors, who are significantly more likely to use a landline than younger adults, according to the sponsors, who also include John Hickenlooper (D-CO), and Jerry Moran (R-KS).  

If passed, within 120 days of enactment, the Reforming Broadband Connectivity Act (S. 3236) directs the FCC to assess the need to expand the Universal Service Fund contribution base and submit a report to Congress detailing the results. The study must take into account the fairness and burden any fee changes will have on consumers and businesses, as well as the impact the proposed changes to the contribution system will have on seniors.

The point is to ensure the contribution base is “imposed fairly and equitably,” according to the bill text. The USF funding mechanism has become impractical because broadband revenues are not included in the base from which providers – and their customers — pay for the program, reported Telecompetitor. The percentage of long-distance telecom revenues that goes toward the fund now runs about 30 percent.

The USF was originally established to cover certain telephone costs in high-cost rural areas and for low-income households. Over the years, USF programs have been expanded to cover broadband, but the funding mechanism hasn’t changed.

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