Two prominent U.S. Senators sought to ensure the long-term viability of the government’s Universal Service Fund (USF), introducing a new bill which would initiate an overhaul of the broadband subsidy program’s funding mechanism.
Just three pages long, the Reforming Broadband Connectivity Act of 2021 directs the Federal Communications Commission (FCC) to conduct a study assessing the need to expand the USF contribution base and report back to Congress with recommendations within one year. The bill specifically asks the FCC to consider how changes to the funding structure would impact consumers, businesses and seniors.
Senators Amy Klobuchar and John Thune jointly sponsored the bill. Klobuchar, who is a co-chair of the Senate Broadband Caucus, said in a statement the measure “will help ensure we have the resources to keep the Universal Service Fund strong so we can continue to expand access to broadband.”
The measure has been referred to the Senate Committee on Commerce, Science and Transportation for review. In order to become law, the bill must be passed by both chambers of Congress and signed by President Joe Biden.
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Today, the USF distributes support for broadband access through four key programs: the Connect America Fund, Lifeline, E-rate and Rural Health Care. Money for the fund is collected from operators, which are required to contribute a portion of their telecom revenues. Klobuchar and Thune noted in a press release a majority of USF funding comes from fees attached to landline voice services. Broadband revenues are not currently subject to a USF assessment.
In September, NTCA – The Rural Broadband Association released a sponsored report which showed the revenues subject to USF payments have fallen 63% since 2001, from $79.9 billion to $29.6 billion in 2021.
Though it is unclear whether Klobuchar and Thune’s measure will become law, it would likely receive a friendly reception at the FCC. The agency’s Chairwoman Jessica Rosenworcel recently highlighted a need for USF reform, as did Commissioner Nathan Simington.