Federal lawmakers are taking another shot at expanding the funding base of the Universal Service Fund (USF). The USF includes four high-cost programs supporting basic telecommunications services for institutions and low-income Americans.
The program is funded by service providers. They pay into the program as a percentage of telecom, primarily voice, revenues, and those costs are passed on to customers. The USF is primarily funded through landline fees, disproportionately impacting seniors, who are more likely to use landlines than other Americans, note the bill sponsors. That approach has become increasingly impractical as voice revenues decline and a higher percentage of telecom revenues has been required to keep the program afloat, according to Telecompetitor.
The Reforming Broadband Connectivity Act of 2023 is similar to a previous version that was introduced two years ago, notes Broadband Breakfast. The bills introduced in the House and the Senate would require the FCC within one year of enactment, to solidify rules to reform how the USF is supported. Within 120 days the FCC must conduct a study on the need to broaden the fund’s base and submit the report to Congress.
Reps. Lizzie Fletcher (D-TX), Joe Neguse (D-CO), and Angie Craig (D-MN) introduced the House version. Senators Amy Klobuchar (D-MN), John Thune (R-SD) and Jerry Moran (R-KS) introduced companion legislation.
The bill’s introduction follows an FCC report to Congress that requested the legislative body provide the commission with the authority to change the fund’s contribution base.
Sponsors say the legislation is endorsed by the National Telephone Cooperative Association (NTCA) – The Rural Broadband Association, WTA – Advocates for Rural Broadband, USTelecom, and the Minnesota Telecom Alliance. “As we continue to rely on broadband for just about every aspect of daily life, including working and learning remotely, the Universal Service Fund is key to making critical communications services both available and affordable” said NTCA CEO Shirley Bloomfield. “Efforts to examine and address continuing erosion in the system that funds the USF will be essential to achieve and sustain a shared vision of universal connectivity.”
USTelecom SVP Government Affairs Brandon Heiner said, “Ensuring broadband service in the most remote, hardest-to-serve areas requires a sustainable Universal Service Fund with a sustainable funding formula.” He said the sponsors, “recognize that the contribution mechanism must be reformed to preserve connectivity for rural Americans. Directing the FCC to initiate a rulemaking to expand the contributions base will help secure the future of universal service.”
By Leslie Stimson, Inside Towers Washington Bureau Chief
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