News - September 14, 2021

New Report Recommends Path Forward for Universal Service Fund: Include Broadband to Save It

USF expert and former FCC official, Carol Mattey, details myths/realities and presents options for moving USF into the future, recommending an expansion of the Fund to include broadband internet access service

WASHINGTON, D.C. (September 14, 2021) – The current funding mechanism for the Federal Communications Commission’s (FCC) Universal Service Fund (USF) is under significant duress. The revenues subject to USF assessment have declined 63% in the last two decades, and in turn the contribution factor has risen dramatically, placing inequitable burdens on certain consumers and businesses and calling into question the sustainability of the USF programs. But there are solutions readily available to stabilize and save the USF which will ensure families, schools, hospitals and rural communities stay connected to broadband and voice communication services. That is the message in a new paper from USF expert and former FCC official Carol Mattey, being presented by advocacy organizations NTCA-The Rural Broadband Association, INCOMPAS and the Schools, Health & Libraries Broadband (SHLB) Coalition.  

The new paper, USForward, details how the FCC can take a smart, sustainable approach to contributions reform. Warning of a 40 percent contribution factor by 2025, the paper details the options the FCC has to address this problem now. It analyzes the real facts about the decline in USF revenues, debunking myths about landline use and highlighting activity by current providers that impact the program’s bottom line. Considering possible solutions, the paper makes the case for adding broadband internet access service revenues as a means of stabilizing the USF program to meet its mission and future goals. If the Commission does so, the paper projects that the contribution factor would fall significantly and remain under 4% over the next several years. Ms. Mattey makes the case why this option is the best way forward to modernize and stabilize USF for the future. 

**Read the new USForward paper. 


Quotes: 

Chip Pickering, CEO of INCOMPAS:
“The Universal Service Fund (USF) has long been a beacon of hope for families, rural communities and small businesses. Saving USF is a priority and broadband expansion is a smart, natural step in the program’s evolution that will ensure all students and job seekers have a pathway to a better future.” 

Shirley Bloomfield, CEO of NTCA:
“The federal Universal Service Fund is essential for the delivery of high-quality voice and broadband services to millions of Americans. USF not only helps make the business case for building networks, but it is critical as well in sustaining those networks and keeping services delivered over them affordable. NTCA is therefore proud to join with its partners in presenting the USForward report, which offers common-sense and readily achievable recommendations for putting USF on a more stable and equitable foundation.” 

John Windhausen Jr., Executive Director of the SHLB Coalition:
“The Universal Service Fund exists to ensure that every person, no matter who or where they are, can obtain high-quality, affordable broadband. But the current funding mechanism is on an unsustainable path, which could end internet access for many students, patients, and other community-members. Furthermore, the current USF fee is spiraling upwards and increasingly imposes an unfair burden on low-income people. The SHLB Coalition calls on policymakers to strengthen our national commitment to broadband equity for all by reforming the USF funding mechanism."

Chris Lewis, President and CEO of Public Knowledge:
“The promise of universal broadband service remains an unfulfilled one. The Universal Service Fund is and will remain an essential tool in our nation’s effort to ensure all Americans have broadband access. Contributions to the USF have been in need of updating for some time, but we have reached a critical point where the decline in the revenue base subject to contribution and the inequity it creates for consumers must be addressed. We are pleased to join in support of the USForward report. As the report emphasizes, the FCC has the existing authority to create a contribution mechanism that not only makes for a more equitable program, but also allows us to achieve the promise of universal service.”