On May 11, the Senate Subcommittee on Communications, Media, and Broadband held a hearing titled "The State of Universal Service" to examine the status of the Universal Service Fund (USF), which supports four programs designed to expand telecommunications throughout the country. Joe Kane, the director of broadband and spectrum policy at the Information Technology and Innovation Foundation (ITIF), commended the Senate for holding the hearing and advocated for Congress to redirect some USF funding toward newer, more efficient programs.
The four telecommunications programs supported by the USF are High Cost Support Mechanism, Low Income Support Mechanism, Rural Health Care Support Mechanism and Schools and Libraries Support Mechanism (E-Rate), according to the Federal Communications Commission (FCC). High Cost subsidizes certain telephone companies that operate in high-cost areas in order to make service more affordable for the residents of those areas. Low Income helps pay the monthly telephone charges of low-income customers. Rural Health Care helps make telehealth services more affordable for rural residents by ensuring that rural health care providers can pay similar rates to those in urban areas. E-Rate provides services like internet access to eligible schools and libraries.
The hearing, which was led by Senator Ben Ray Luján (D-NM), chair of the Subcommittee on Communications, Media and Broadband, examined the four programs supported by the USF and discussed whether they continue to meet the needs of Americans today, according to the subcommittee's website. Lawmakers and stakeholders explored possible reforms to guarantee that the programs continue to work effectively.
In his opening remarks, Sen. Luján said that in the time since the USF was established, technology and society have advanced, so it is important to consider the ways in which the USF-supported programs can best serve the needs of today's students, educators, health care providers and workers.
"For example, in 2023 we know that students often learn outside the classroom," Luján said. "They learn during time at home, during commutes, and on the bus to school. But today, E-Rate for schools and libraries is restricted to connecting the physical school buildings or providing equipment within the classroom, which significantly limits utilization."
One witness at the hearing was Timothy Chavez, the technology director of Cuba Independent School District in New Mexico, who said that the E-Rate program has been "critical" in bringing internet access to the district, which is comprised of a majority of Native American and Hispanic students.
"We fully support the Universal Service Fund, and recognize that the support it provides allows communities like ours can survive in the 21st Century," Chavez said.
King released a statement commending the Senate for holding the hearing and called on Congress to redirect USF funding towards more efficient programs.
"The Senate is wise to reconsider the role of the Universal Service Fund (USF) since there has been dramatic progress toward closing the digital divide by other means. USF expenditures have continued for years as the contribution factor spirals upward without much evaluation of whether USF programs are achieving their goals. Now, Congress has taken positive steps to improve broadband funding, and it is time to reconsider the need for USF programs. The status quo for USF requires ever-higher fees levied on Americans’ phone bills to fund subsidy programs that are now redundant at best," King said in his statement.
"The new Broadband Equity, Access, and Deployment (BEAD) program is a more promising avenue for deploying broadband to rural areas than the USF High-Cost program. If a broadband network cannot survive without ongoing subsidies for its operation, then it ought not to get federal support, especially in light of burgeoning satellite broadband options."
"For individuals with difficulty paying for broadband, the Affordable Connectivity Program (ACP) is a more flexible and generous program than its USF equivalent, Lifeline. ACP, however, is in danger of exhausting its funding while Lifeline continues apace."
"Rather than doubling down on the old, unsuccessful programs by expanding the USF contribution base, Congress should retool its priorities and enact legislation that eliminates the High Cost and Lifeline programs in order to fully fund the ACP," King concluded.
