News - May 11, 2023

INCOMPAS President Angie Kronenberg Delivers Opening Remarks at U.S. Senate Hearing On USF

WASHINGTON, D.C. – May 11, 2023 – INCOMPAS President Angie Kronenberg today delivered the following opening remarks at the Senate Commerce Media, Technology and Broadband Subcommittee hearing on “The State of the Universal Service.”  

Good morning, Chairman Lujan, Ranking Member Thune, and members of the Subcommittee. My name is Angie Kronenberg, and I am the President of INCOMPAS—the internet and competitive networks association. Thank you for the opportunity to testify on the importance and future of the Universal Service Fund—the nation’s critical connectivity program. I have had the honor and privilege to work on the USF for a significant portion of my career, including at the FCC. 

INCOMPAS is the leading trade association advocating for competition and innovation in the communications marketplace. We represent competitive broadband companies that are building networks of the future and the leading internet companies that are driving consumer and business demand for more robust broadband. Our members are bringing more choice and innovation, better customer service, lower prices and faster speeds to customers across the nation. 

The USF is extremely important to INCOMPAS’ members.The majority of INCOMPAS’ network providers participate in at least one USF program, and they have a strong interest in ensuring that the Fund can meet its goal to ensure affordable broadband across the nation. Our members are also required to contribute to the USF based on their telecom revenues and have had to deal with the increasing contribution factor. 

While the USF is critical for connectivity, millions of Americans remain unconnected, and too many Americans have limited or no choice for their home service. Consumers want more competition. Competition is the law, and it is key to meeting our connectivity goals.  

We need an all-of-the-above approach and support from both the public and private sectors to get every consumer and business connected. INCOMPAS recognizes the importance of the USF, Congressional funding and private investment to do so. And I want to thank Congress for its commitment to closing the digital divide by appropriating billions of dollars.  

The technology companies that INCOMPAS represents are also investing heavily in the networks. In the last decade, the world’s largest tech companies invested almost a trillion dollars in global digital infrastructure. And each year tech companies are investing over $120 billion.This is in addition to the billions of dollars they invest in online content and applications.These investments support the delivery of their own content, which drives higher demand for broadband and saves broadband providers over $5 billion each year.  

Now that Congress has allocated funding for broadband deployment and affordability, some are questioning whether we still need the USF at all, and the short answer is “Yes.” Most Congressional funding is targeted for broadband deployment, yet three of the four USF programs focus on affordability. We must continue to ensure that communities can afford to subscribe to these essential services. 

However, when we are dealing with taxpayer dollars and the USF fee on customers, we must be responsible.There are certain USF programs that have overlapping goals with the recent Congressional funding, so it will be important for the FCC to do a deep-dive analysis into each USF program to find efficiencies, which it has committed to do. And we’re pleased that you’re starting a working group to do the same. INCOMPAS is committed to supporting and assisting you and the FCC in your efforts. 

While the USF remains vital, it is in serious jeopardy. Telecom revenues have declined dramatically. As a result, the contribution factor has increased to a historic high of 30%. Without intervention, the factor is predicted to rise to 40% by 2025, putting the stability of the Fund at risk.  

Historically the USF contribution base includes all the services supported by the Fund, but it has not been modernized to do that for broadband. INCOMPAS has been working with the USForward Coalition, which consists of over 340 diverse organizations including civil society, trade associations and broadband providers that agree with the recommendation by former FCC official and USF expert Carol Mattey that the FCC should expand the contribution base to include broadband internet revenues. She estimates that doing so would bring the contribution factor down to less than 4% and is a logical, easy and equitable solution that the FCC has the authority to implement. 

In conclusion, Congress gave the FCC statutory responsibility to ensure that the USF is predictable and sufficient. INCOMPAS stands ready to work with Congress and the FCC to ensure that that the USF is sustained and advanced in our nation’s pursuit of Internet for All. Thank you, and I’m happy to answer your questions.