The Future of the Universal Service Fund and Related Broadband Programs

Changes from July 11, 2023 to March 1, 2024

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

The Future of the Universal Service Fund and
~~July 11, 2023~~March 1, 2024
Related Broadband Programs
Patricia Moloney Figliola,
Universal service is the principle that all Americans should have access to communications Universal service is the principle that all Americans should have access to communications
~~Coordinator~~Specialist in Internet and
services. It is the cornerstone of the Communications Act of 1934 (P.L. 73-416)—the law that services. It is the cornerstone of the Communications Act of 1934 (P.L. 73-416)—the law that
~~Specialist in Internet and~~Telecommunications
established the Federal Communications Commission (FCC). The FCC is an independent federal established the Federal Communications Commission (FCC). The FCC is an independent federal
~~Telecommunications~~Policy
agency charged with regulating interstate and international communications by radio, television, agency charged with regulating interstate and international communications by radio, television,
~~Policy~~
wire, satellite, and cable. wire, satellite, and cable.

~~Brian E. Humphreys~~
Since the enactment of the Communications Act, universal service policies and programs have Since the enactment of the Communications Act, universal service policies and programs have
~~Analyst in Science and~~
helped to make telephone service available nationwide, including in rural areas. The helped to make telephone service available nationwide, including in rural areas. The
~~Technology Policy~~
Telecommunications Act of 1996 (P.L. 104-104) expanded the focus of universal service, Telecommunications Act of 1996 (P.L. 104-104) expanded the focus of universal service,

amending the Communications Act, to include access to advanced telecommunications and amending the Communications Act, to include access to advanced telecommunications and
~~Colby Leigh Rachfal~~
information services, including high-speed (e.g., broadband) internet service to homes, schools, information services, including high-speed (e.g., broadband) internet service to homes, schools,
~~Analyst in~~
and businesses—especially in rural and high cost areas, and to low-income individuals. and businesses—especially in rural and high cost areas, and to low-income individuals.
~~Telecommunications~~
~~Policy~~
The Telecommunications Act of 1996 adopted a set of principles to guide universal service The Telecommunications Act of 1996 adopted a set of principles to guide universal service

policy and achieve universal service goals: promote the availability of quality services at just, policy and achieve universal service goals: promote the availability of quality services at just,
reasonable, and affordable rates for all consumers; increase nationwide access to advanced reasonable, and affordable rates for all consumers; increase nationwide access to advanced

telecommunications services; advance the availability of such services to all consumers, telecommunications services; advance the availability of such services to all consumers,
including those in low income, rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in including those in low income, rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in
urban areas; increase access to telecommunications and advanced services in schools, libraries, and rural health care urban areas; increase access to telecommunications and advanced services in schools, libraries, and rural health care
facilities; and provide equitable and non-discriminatory contributions from all providers of telecommunications services to facilities; and provide equitable and non-discriminatory contributions from all providers of telecommunications services to
the Universal Service Fund (USF), which supports universal service programs. the Universal Service Fund (USF), which supports universal service programs.
To advance the goals of universal service, the FCC uses various permanent, pilot, and temporary subsidy programs funded To advance the goals of universal service, the FCC uses various permanent, pilot, and temporary subsidy programs funded
through the USF. The USF is funded by fees on telecommunications carriers, rather than through appropriations. The FCC’s through the USF. The USF is funded by fees on telecommunications carriers, rather than through appropriations. The FCC’s
USF authority is governed by Section 254 of the Communications Act, as amended (47 U.S.C. §254), which was added by USF authority is governed by Section 254 of the Communications Act, as amended (47 U.S.C. §254), which was added by
the Telecommunications Act of 1996. Section 254(d) requires interstate telecommunication carriers to contribute to the the Telecommunications Act of 1996. Section 254(d) requires interstate telecommunication carriers to contribute to the
advancement of universal service based on mechanisms established by the FCC. The FCC has implemented this direction by advancement of universal service based on mechanisms established by the FCC. The FCC has implemented this direction by
adopting regulations requiring interstate carriers to pay a percentage of their revenue at a rate, set on a quarterly basis, called adopting regulations requiring interstate carriers to pay a percentage of their revenue at a rate, set on a quarterly basis, called
the “contribution factor.” While the FCC sets the regulatory and fee structure, the USF is administered by the Universal the “contribution factor.” While the FCC sets the regulatory and fee structure, the USF is administered by the Universal
Service Administrative Company, a nonprofit entity, under the direction of the FCC. Service Administrative Company, a nonprofit entity, under the direction of the FCC.
The FCC has established four USF programs: the High Cost Program, the Lifeline Program, the Rural Health Care Program, The FCC has established four USF programs: the High Cost Program, the Lifeline Program, the Rural Health Care Program,
and the Schools and Libraries Program. The agency and the Schools and Libraries Program. The agency says it continually seeks to improve and update USF programs to reflect the continually seeks to improve and update USF programs to reflect the
changing needs of beneficiaries and advances in technology. Additionally, changing needs of beneficiaries and advances in technology. Additionally, ~~policymakers have discussed options for~~
~~maintaining the viability of the four programs, for~~some Members have called on Congress to reexamine the USF and the fees it charges carriers (which may be passed on to consumers), evaluate the appropriateness of FCC authorities, and increase congressional oversight of USF spending. For example, by expanding the types of entities that example, by expanding the types of entities that contribute to the fund or covering additional services (e.g., rural 5G), expanding the contribution base (e.g., S. 3321), directing spectrum auction revenues to support the USF, or funding the USF through the appropriations process. Other Members have called on Congress to reexamine the USF and the “hidden tax” it places on carriers (which may be passed down to consumers), to rein in FCC authorities, and to increase congressional oversight of USF spending. While expanding the USF could help to close the digital divide, expanding its use could require higher fees for carriers and, therefore, consumers. During the 118th Congress, five bills have been introduced that would affect USF programs. The FAIR Contributions Act (S. 856) would require the FCC to study and report on the feasibility of funding the USF through contributions from edge providers (i.e., providers of online content or services, such as search engines). The Lowering Broadband Costs for Consumers Act (S. 3321) would require certain broadband and edge providers to contribute on an equitable and nondiscriminatory basis to preserve and advance the USF programs. The Reforming Broadband Connectivity Act of 2023 (companion bills S. 975 and H.R. 1812) would require the FCC to reform the contribution system of the USF. The Rural Broadband Protection Act of 2023 (S. 275) would require the FCC to establish a process to vet applicants seeking funding under the high cost universal service programs~~contribute to the fund.~~
~~During the 118th Congress, four bills have been introduced that would affect USF programs. These are the FAIR~~
~~Contributions Act (S. 856), which would require the FCC to study and report on the feasibility of funding the USF through~~
~~contributions from edge providers (i.e., providers of online content or services, such as search engines); the Reforming~~
~~Broadband Connectivity Act of 2023 (companion bills S. 975 and H.R. 1812), which would require the FCC to reform the~~
~~contribution system of the USF; and the Rural Broadband Protection Act of 2023 (S. 275), which would require the FCC to~~
~~establish a process to vet applicants seeking funding under the high cost universal service programs.~~
~~Some policymakers have discussed options for improving the efficiency and effectiveness of the USF generally, and~~
~~maintaining the viability of the four USF programs, for example, by expanding the types of entities that contribute to the fund~~
~~or covering additional services (e.g., rural 5G). Other Members have called on Congress to reexamine the USF and the~~
~~“hidden tax” it places on carriers (which may be passed down to consumers), to rein in FCC authorities, and to increase~~
~~congressional oversight of USF spending. While expanding the USF could help to close the digital divide, expanding its use~~
~~could require higher fees for carriers and, therefore, consumers~~. .

Congressional Research Service Congressional Research Service

The Future of the Universal Service Fund and Related Broadband Programs

Introduction
Universal service is the principle that all Americans should have access to communications Universal service is the principle that all Americans should have access to communications
services. It is the cornerstone of the Communications Act of 1934 (P.L. 73-416)—the law that services. It is the cornerstone of the Communications Act of 1934 (P.L. 73-416)—the law that
established the Federal Communications Commission (FCC).1 The FCC is an independent federal established the Federal Communications Commission (FCC).1 The FCC is an independent federal
agency charged with regulating interstate and international communications by radio, television, agency charged with regulating interstate and international communications by radio, television,
wire, satellite, and cable. The mission of the agency is to make available for all people of the wire, satellite, and cable. The mission of the agency is to make available for all people of the
United States, “without discrimination on the basis of race, color, religion, national origin, or sex, United States, “without discrimination on the basis of race, color, religion, national origin, or sex,
a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with
adequate facilities at reasonable charges.”2 adequate facilities at reasonable charges.”2
Efforts to make voice telephone service available throughout the United States began with the Efforts to make voice telephone service available throughout the United States began with the
enactment of the Communications Act. Since then, universal service policies and programs have enactment of the Communications Act. Since then, universal service policies and programs have
helped to make telephone service available nationwide, including in rural areas. The helped to make telephone service available nationwide, including in rural areas. The
Telecommunications Act of 1996 (P.L. 104-104) expanded the focus of universal service, Telecommunications Act of 1996 (P.L. 104-104) expanded the focus of universal service,
amending the Communications Act of 1934 to include access to advanced telecommunications amending the Communications Act of 1934 to include access to advanced telecommunications
and information services, including high-speed (e.g., broadband) internet service to homes, and information services, including high-speed (e.g., broadband) internet service to homes,
schools, and businesses, especially in rural and high-cost areas, and to low-income individuals.3 schools, and businesses, especially in rural and high-cost areas, and to low-income individuals.3
To advance the principle of universal service, the FCC uses various permanent, pilot, and To advance the principle of universal service, the FCC uses various permanent, pilot, and
temporary programs funded through the Universal Service Fund (USF).4 The USF is funded by temporary programs funded through the Universal Service Fund (USF).4 The USF is funded by
fees on telecommunications carriers, rather than through appropriations. The FCC’s USF fees on telecommunications carriers, rather than through appropriations. The FCC’s USF
authority is governed by Section 254 of the Communications Act, as amended (47 U.S.C. §254), authority is governed by Section 254 of the Communications Act, as amended (47 U.S.C. §254),
which was added by the Telecommunications Act of 1996. Section 254(d) requires interstate which was added by the Telecommunications Act of 1996. Section 254(d) requires interstate
telecommunication carriers to contribute to the advancement of universal service on an “equitable telecommunication carriers to contribute to the advancement of universal service on an “equitable
and nondiscriminatory basis” based on mechanisms established by the FCC. The FCC has and nondiscriminatory basis” based on mechanisms established by the FCC. The FCC has
implemented this direction by adopting regulations requiring interstate carriers to pay a implemented this direction by adopting regulations requiring interstate carriers to pay a
percentage of their revenue at a rate set on a quarterly basis, called the “contribution factor.”5 The percentage of their revenue at a rate set on a quarterly basis, called the “contribution factor.”5 The
FCC sets the regulatory and fee structures for the USF, which is intended to ensure that FCC sets the regulatory and fee structures for the USF, which is intended to ensure that
telecommunications services, including broadband, are available and affordable throughout the telecommunications services, including broadband, are available and affordable throughout the
country. The USF is administered by the Universal Service Administrative Company (USAC), country. The USF is administered by the Universal Service Administrative Company (USAC),
under the direction of the FCC.6 under the direction of the FCC.6
Universal Service Principles
The Telecommunications Act of 1996, which significantly amended the Communications Act, The Telecommunications Act of 1996, which significantly amended the Communications Act,
adopted a set of principles to guide universal service policy: adopted a set of principles to guide universal service policy:
• Promote the availability of quality services at just, reasonable, and affordable • Promote the availability of quality services at just, reasonable, and affordable
rates for all consumers. rates for all consumers.
• Increase nationwide access to advanced telecommunications services. • Increase nationwide access to advanced telecommunications services.

1 47 U.S.C. § 1 47 U.S.C. §§151 et seq. 151 et seq.
2 47 U.S.C. §151. 2 47 U.S.C. §151.
3 47 U.S.C. §254. 3 47 U.S.C. §254.
4 Federal Communications Commission (FCC), “Universal Service,” https://www.fcc.gov/general/universal-service. 4 Federal Communications Commission (FCC), “Universal Service,” https://www.fcc.gov/general/universal-service.
5 For more information about the contribution rate, see CRS Legal Sidebar LSB10904, 5 For more information about the contribution rate, see CRS Legal Sidebar LSB10904, Fifth Circuit Considers
Constitutionality of the Universal Service Fund, by Chris D. Linebaugh. , by Chris D. Linebaugh.
6 The Universal Service Administrative Company (USAC) is an independent, not-for-profit corporation that manages 6 The Universal Service Administrative Company (USAC) is an independent, not-for-profit corporation that manages
Universal Service Fund (USF) programs, including the collection of contributions and disbursement of funds. Universal Service Fund (USF) programs, including the collection of contributions and disbursement of funds.
Congressional Research Service Congressional Research Service

1 1

The Future of the Universal Service Fund and Related Broadband Programs

• Advance the availability of such services to all consumers, including those in low • Advance the availability of such services to all consumers, including those in low
income, rural, insular, and high cost areas, at rates that are reasonably comparable income, rural, insular, and high cost areas, at rates that are reasonably comparable
to those charged in urban areas. to those charged in urban areas.
• Increase access to telecommunications and advanced services in schools, • Increase access to telecommunications and advanced services in schools,
libraries, and rural health care facilities. libraries, and rural health care facilities.
• Provide equitable and non-discriminatory contributions from all providers of • Provide equitable and non-discriminatory contributions from all providers of
telecommunications services for the fund supporting universal service programs.7 telecommunications services for the fund supporting universal service programs.7
The FCC has updated the USF and its funding mechanisms to respond to improvements in The FCC has updated the USF and its funding mechanisms to respond to improvements in
telecommunications and internet technology and services. telecommunications and internet technology and services.
Universal Service Fund Programs
Section 254 directs the FCC, in consultation with a Federal-State Joint Board on Universal Section 254 directs the FCC, in consultation with a Federal-State Joint Board on Universal
Service,8 to consider the universal service principles outlined in the Communications Act when Service,8 to consider the universal service principles outlined in the Communications Act when
formulating USF policies and programs (e.g., affordable rates, rural access, essential to education, formulating USF policies and programs (e.g., affordable rates, rural access, essential to education,
public health, or safety). To advance the universal service principles, the FCC, with the Board, public health, or safety). To advance the universal service principles, the FCC, with the Board,
has established four programs: has established four programs:
• High Cost Program, • High Cost Program,
• Lifeline Program, • Lifeline Program,
• Rural Health Care Program, and • Rural Health Care Program, and
• Schools and Libraries Program (“E-Rate”). • Schools and Libraries Program (“E-Rate”).
Numerous proposals have been considered over the years to improve and update these programs Numerous proposals have been considered over the years to improve and update these programs
to reflect the changing needs of beneficiaries and advances in technology. Additionally, to reflect the changing needs of beneficiaries and advances in technology. Additionally,
policymakers have discussed options for maintaining the viability of the USF, for example, by policymakers have discussed options for maintaining the viability of the USF, for example, by
expanding the types of entities that contribute to the fund. The four programs and the issue of expanding the types of entities that contribute to the fund. The four programs and the issue of
changing the calculation of USF contributions are discussed below. changing the calculation of USF contributions are discussed below.
High Cost Program
Historically, the High Cost Program subsidized voice service to ensure universal access to phone Historically, the High Cost Program subsidized voice service to ensure universal access to phone
lines; the program is transitioning to provide support for broadband through its Connect America lines; the program is transitioning to provide support for broadband through its Connect America
Fund (CAF). According to the USAC, the High Cost Program provides support through more Fund (CAF). According to the USAC, the High Cost Program provides support through more
than a dozen separate legacy funds that support voice service,9 and modernized funds that support than a dozen separate legacy funds that support voice service,9 and modernized funds that support
broadband service expansion in rural areas.10 The modernized funds include, for example, the broadband service expansion in rural areas.10 The modernized funds include, for example, the
Alternative Connect America Cost Model (ACAM)—a voluntary option for rate-of-return carriers Alternative Connect America Cost Model (ACAM)—a voluntary option for rate-of-return carriers
(i.e., small independent telephone companies). According to USAC, “carriers that elected this (i.e., small independent telephone companies). According to USAC, “carriers that elected this
option receive predictable monthly payments to provide voice and broadband service to all option receive predictable monthly payments to provide voice and broadband service to all

7 FCC, “Universal Service,” https://www.fcc.gov/general/universal-service. 7 FCC, “Universal Service,” https://www.fcc.gov/general/universal-service.
8 The Federal-State Joint Board on Universal Service is composed of the FCC Commissioners, State Utility 8 The Federal-State Joint Board on Universal Service is composed of the FCC Commissioners, State Utility
Commissioners, and a consumer advocate representative. For more information, see FCC, “Federal-State Joint Board Commissioners, and a consumer advocate representative. For more information, see FCC, “Federal-State Joint Board
on Universal Service,” https://www.fcc.gov/general/federal-state-joint-board-universal-service. on Universal Service,” https://www.fcc.gov/general/federal-state-joint-board-universal-service.
9 Legacy funds include Frozen High Cost Support, High Cost Loop, Intercarrier Compensation Recovery, and Interstate 9 Legacy funds include Frozen High Cost Support, High Cost Loop, Intercarrier Compensation Recovery, and Interstate
Common Line Support. For more information, see USAC, “Funds,” https://www.usac.org/high-cost/funds. Common Line Support. For more information, see USAC, “Funds,” https://www.usac.org/high-cost/funds.
10 USAC, “High Cost Fund,” https://www.usac.org/high-cost/. 10 USAC, “High Cost Fund,” https://www.usac.org/high-cost/.
Congressional Research Service Congressional Research Service

2 2

The Future of the Universal Service Fund and Related Broadband Programs

funded locations over the program’s 10-year support term (2017-2026).”11 Carriers must meet funded locations over the program’s 10-year support term (2017-2026).”11 Carriers must meet
specified broadband deployment milestones during the 10-year support term.12 specified broadband deployment milestones during the 10-year support term.12
The Rural Digital Opportunity Fund (RDOF)13 and 5G Fund for Rural America14 are the most The Rural Digital Opportunity Fund (RDOF)13 and 5G Fund for Rural America14 are the most
recent initiatives established as part of the CAF.15 recent initiatives established as part of the CAF.15
Rural Digital Opportunity Fund
Through competitive reverse auctions—a mechanism that awards funds to the company that Through competitive reverse auctions—a mechanism that awards funds to the company that
commits to deploying service at the lowest cost—the FCC committed $20.4 billion to bring high-commits to deploying service at the lowest cost—the FCC committed $20.4 billion to bring high-
speed, fixed16 broadband service to rural homes and small businesses in two phases.17 speed, fixed16 broadband service to rural homes and small businesses in two phases.17
• The Phase I auction began on October 29, 2020. The FCC announced the results on • The Phase I auction began on October 29, 2020. The FCC announced the results on
December 7, 2020. 180 bidders won $9.2 billion to deploy high-speed broadband to over December 7, 2020. 180 bidders won $9.2 billion to deploy high-speed broadband to over
5.2 million unserved homes and businesses.18 Following the auction, the FCC has 5.2 million unserved homes and businesses.18 Following the auction, the FCC has
continued19 to review long-form applications20 and authorize support for winning bidders continued19 to review long-form applications20 and authorize support for winning bidders
over the 10-year period after the auction process is complete.21 over the 10-year period after the auction process is complete.21
• The Phase II auction, for which the FCC has not yet determined a timeframe, may • The Phase II auction, for which the FCC has not yet determined a timeframe, may
provide up to $11.2 billion to deploy high-speed broadband, targeting partially served provide up to $11.2 billion to deploy high-speed broadband, targeting partially served
areas as well as the few unserved areas that did not receive Phase I funding. In a areas as well as the few unserved areas that did not receive Phase I funding. In a
November 10, 2022, letter from FCC Chairwoman Jessica Rosenworcel to Senator Roger November 10, 2022, letter from FCC Chairwoman Jessica Rosenworcel to Senator Roger
Wicker, Chairwoman Rosenworcel noted that the FCC Wicker, Chairwoman Rosenworcel noted that the FCC
discussed the need for future efforts like RDOF Phase II, in light of anticipated discussed the need for future efforts like RDOF Phase II, in light of anticipated
broadband infrastructure work from new programs like broadband infrastructure work from new programs like
the National the National
Telecommunications and Information Administration’s Broadband Equity, Access, Telecommunications and Information Administration’s Broadband Equity, Access,
and Deployment Program. We noted that after funding from these new programs is and Deployment Program. We noted that after funding from these new programs is
put in place, the FCC could consider deployment initiatives for areas still lacking put in place, the FCC could consider deployment initiatives for areas still lacking
service or otherwise falling short of the speed and latency standards required.22 service or otherwise falling short of the speed and latency standards required.22

11 USAC, “ACAM,” https://www.usac.org/high-cost/funds/acam/. 11 USAC, “ACAM,” https://www.usac.org/high-cost/funds/acam/.
12 Ibid. For information on other modernized funds, see USAC, “Funds,” https://www.usac.org/high-cost/funds. 12 Ibid. For information on other modernized funds, see USAC, “Funds,” https://www.usac.org/high-cost/funds.
13 For additional information about RDOF, see CRS Report R46501, 13 For additional information about RDOF, see CRS Report R46501, Rural Digital Opportunity Fund: Requirements
and Selected Policy Issues, by Colby Leigh Rachfal. , by Colby Leigh Rachfal.
14 For additional information about the 5G Fund for Rural America, see CRS Insight IN11661, 14 For additional information about the 5G Fund for Rural America, see CRS Insight IN11661, 5G Fund for Rural
America, by Jill C. Gallagher. , by Jill C. Gallagher.
15 The High Cost Programs included previous initiatives, such as the Connect America Fund Phase II Auction, which 15 The High Cost Programs included previous initiatives, such as the Connect America Fund Phase II Auction, which
ran from July 24, 2018, to August 21, 2018. FCC, “Connect America Fund Phase II Auction (Auction 903),” ran from July 24, 2018, to August 21, 2018. FCC, “Connect America Fund Phase II Auction (Auction 903),”
https://www.fcc.gov/auction/903. https://www.fcc.gov/auction/903.
16 Fixed technologies include, for example, fiber optic cable, cable modem, fixed wireless. 16 Fixed technologies include, for example, fiber optic cable, cable modem, fixed wireless.
17 FCC, “Auction 904: Rural Digital Opportunity Fund,” https://www.fcc.gov/auction/904. 17 FCC, “Auction 904: Rural Digital Opportunity Fund,” https://www.fcc.gov/auction/904.
18 FCC, 18 FCC, Auction to Bring Broadband to over 10 Million Rural Americans, https://www.fcc.gov/document/fcc-auction-, https://www.fcc.gov/document/fcc-auction-
bring-broadband-over-10-million-rural-americans. bring-broadband-over-10-million-rural-americans.
19 FCC Chairwoman Jessica Rosenworcel indicated in a November 10, 2022, letter to Senator Roger Wicker that “FCC 19 FCC Chairwoman Jessica Rosenworcel indicated in a November 10, 2022, letter to Senator Roger Wicker that “FCC
staff is close to finalizing authorizations for RDOF support, with 413 out of 418 applications resolved.” staff is close to finalizing authorizations for RDOF support, with 413 out of 418 applications resolved.”
https://docs.fcc.gov/public/attachments/DOC-389366A2.pdf. https://docs.fcc.gov/public/attachments/DOC-389366A2.pdf.
20 After the auction, long-form applications were required from winning bidders to provide additional information to 20 After the auction, long-form applications were required from winning bidders to provide additional information to
the FCC about qualifications, funding, and the network that winning bidders intend to use to meet their obligations. the FCC about qualifications, funding, and the network that winning bidders intend to use to meet their obligations.
21 For example, see FCC, 21 For example, see FCC, Auction 904 17th Authorization Public Notice, January 13, 2023, https://www.fcc.gov/, January 13, 2023, https://www.fcc.gov/
document/auction-904-17th-authorization-public-notice. document/auction-904-17th-authorization-public-notice.
22 FCC, 22 FCC, Chairwoman Jessica Rosenworcel’s Response to Senator Roger Wicker Regarding the Rural Digital
Opportunity Fund, November 21, 2022, https://www.fcc.gov/chairwoman-rosenworcels-letters-congress and , November 21, 2022, https://www.fcc.gov/chairwoman-rosenworcels-letters-congress and
(continued...) (continued...)
Congressional Research Service Congressional Research Service

3 3

The Future of the Universal Service Fund and Related Broadband Programs

5G Fund for Rural America
In October 2020, the FCC adopted rules creating the 5G Fund for Rural America.23 The fund is In October 2020, the FCC adopted rules creating the 5G Fund for Rural America.23 The fund is
expected to distribute up to $9 billion from the USF over expected to distribute up to $9 billion from the USF over ~~the next~~ 10 years to bring voice and 10 years to bring voice and
broadband services to areas of the country that are unlikely to see unsubsidized deployment of 5G broadband services to areas of the country that are unlikely to see unsubsidized deployment of 5G
networks. Funds are to be awarded to providers, including satellite operators, to serve areas that networks. Funds are to be awarded to providers, including satellite operators, to serve areas that
are not served by a subsidized 4G Long Term Evolution (LTE) or 5G broadband service provider. are not served by a subsidized 4G Long Term Evolution (LTE) or 5G broadband service provider.
The FCC plans to award support through a competitive reverse auction. Further, the FCC The FCC plans to award support through a competitive reverse auction. Further, the FCC
announced it would award support in two phases: announced it would award support in two phases:
• Phase I to target up to $8 billion of support nationwide to areas lacking • Phase I to target up to $8 billion of support nationwide to areas lacking
unsubsidized 4G LTE or 5G mobile broadband; $680 million is set aside for unsubsidized 4G LTE or 5G mobile broadband; $680 million is set aside for
tribal lands. tribal lands.
• Phase II to provide at least $1 billion to support the deployment of 5G networks • Phase II to provide at least $1 billion to support the deployment of 5G networks
that facilitate precision agriculture. that facilitate precision agriculture.
To determine eligible areas for the 5G Fund, the FCC is to use data collected as required by the To determine eligible areas for the 5G Fund, the FCC is to use data collected as required by the
Broadband Deployment Accuracy and Technological Availability Act (P.L. 116-130). Broadband Deployment Accuracy and Technological Availability Act (P.L. 116-130). ~~The~~Among other requirements, the act act
required the FCC torequired the FCC to~~—among other requirements—~~ collect and display (on a map) specific collect and display (on a map) specific
location-level information about broadband services available throughout the country and location-level information about broadband services available throughout the country and
implement a implement a public challenge process. Pursuant to the act, the FCC released the National Broadband Map showing mobile coverage in August 2021.24 In November 2022, the agency released the first version of the fixed broadband map. Consumers, states, localities, and tribes could challenge the map to improve the data. In May 2023, the FCC released an updated version of the National Broadband Map to reflect challenges, continued to accept challenges to the May 2023 version, and announced another update (Ver. 3) would be released in November 2023. Following the release of Ver. 2 in May 2023, in September 2023, the FCC took action on the 5G Fund, seeking additional input on several questions concerning the 5G Fund to “reignite” its plan to support 5G deployment in rural areas.25 On September 21, 2023, the FCC adopted a Further Notice of Proposed Rulemaking, stating that with the “new, granular, and improved mobile coverage data” reflected in the new map, it would continue implementation of the 5G Fund.26 In the proceeding, the FCC sought comments on— • areas that will be eligible for 5G Fund support; • the budget for the 5G Fund; • the metric for accepting bids and identifying winning bids in a 5G Fund auction; ~~public challenge process.~~
~~The November 10, 2022, letter from FCC Chairwoman Jessica Rosenworcel to Senator Roger~~
~~Wicker explains the FCC’s position, stating~~
~~As was contemplated by the FCC at the time it adopted the framework for the 5G Fund for~~
~~Rural America and as the FCC later explained in its recent report [to Congress],24 our~~
~~support initiatives in the future should take into consideration the data we develop in the~~
~~Broadband Data Collection, as well as the impact of programs like the Broadband Equity,~~
~~Access, and Deployment Program [a program at the National Telecommunications and~~
~~Information Administration], before moving forward with new approaches to long-term~~
~~support for mobile broadband.25~~
~~On November 18, 2022, the FCC released the preproduction draft of the map—referred to as the~~
~~National Broadband Map. According to the FCC, the preproduction draft began an “ongoing,~~
~~iterative process that will improve the data submitted by providers by incorporating challenges~~
~~from individuals and other stakeholders.”26~~
~~The FCC released an update to its National Broadband Map on May 30, 2023. As of the~~
~~publication of this report, the FCC has not announced when the 5G Fund for Rural America~~
~~would begin.~~

https://docs.fcc.gov/public/attachments/DOC-389366A2.pdf. (Hereinafter, “ https://docs.fcc.gov/public/attachments/DOC-389366A2.pdf. (Hereinafter, “Chairwoman Jessica Rosenworcel’s
Response to Senator Roger Wicker Regarding the Rural Digital Opportunity Fund.”) .”)
23 FCC, 23 FCC, In the Matter of Establishing a 5G Fund for Rural America, Report and Order, GN Docket 20-32, October 27, , Report and Order, GN Docket 20-32, October 27,
2020, https://docs.fcc.gov/public/attachments/FCC-20-150A1.pdf. For additional information, see CRS Insight 2020, https://docs.fcc.gov/public/attachments/FCC-20-150A1.pdf. For additional information, see CRS Insight
IN11661, IN11661, 5G Fund for Rural America, by Jill C. Gallagher. , by Jill C. Gallagher.
24 FCC, 24 FCC, FCC Report on Future of the Universal Service Fund (WC 21-476, FCC 22-67), August 15, 2022,
~~https://www.fcc.gov/document/fcc-reports-congress-future-universal-service-fund.~~ Broadband Funding Map, https://broadbandmap.fcc.gov/home. 25 FCC, “FCC Seeks to Target USF Support for Rural Wireless Broadband Services by Leveraging Improved Maps,” press release, September 21, 2023, https://docs.fcc.gov/public/attachments/DOC-397096A1.pdf. 26 FCC, In the Matter of Establishing a 5G Fund for Rural America, Further Notice of Proposed Rulemaking, GN Docket 20-32, FCC 23-74, September 22, 2023, https://docs.fcc.gov/public/attachments/FCC-23-74A1.pdf. (Hereinafter, “FCC, In the Matter of Establishing a 5G Fund for Rural America, Further Notice of Proposed Rulemaking.”) Comments in the proceeding were due on October 23, 2023, and reply comments were due on November 21, 2023~~(Hereinafter, “FCC USF Report.”)~~
25 ~~Chairwoman Jessica Rosenworcel’s Response to Senator Roger Wicker Regarding the Rural Digital Opportunity~~
~~Fund~~.
~~26 FCC, FCC Releases Pre-Production Draft National Broadband Map, November 18, 2022, https://www.fcc.gov/~~
~~document/fcc-releases-pre-production-draft-national-broadband-map.~~
~~Congressional Research Service~~

4

~~The Future of the Universal Service Fund and Related Broadband Programs~~

. Congressional Research Service 4 The Future of the Universal Service Fund and Related Broadband Programs • how areas eligible for 5G Fund support will be grouped for bidding; • the schedule for transitioning from mobile legacy high-cost support to 5G Fund support consistent with recent legislative amendments; • whether to require 5G Fund support recipients to implement cybersecurity and supply chain risk management plans; and • whether and how this proceeding might create an opportunity to support further deployment of Open Radio Access Network27 technologies.28 The FCC is continuing to consider comments in the 5G Fund proceeding and on related issues (e.g., funding levels, eligibility, impact on current wireless providers). The FCC may decide to change or clarify aspects of the 5G Fund based on this input, or leave the program as it was first presented in 2020. In November 2023, the FCC released the third iteration of its National Broadband Map. The FCC may decide to use this newest data on coverage for the 5G Fund to determine eligibility and awards. It could also wait for a future reiteration of the map, to target funding where it is needed most. Finally, it could wait until after the National Telecommunications and Information Administration (NTIA), an agency within the Department of Commerce, awards the $42.45 billion in funding allocated to the Broadband Equity, Access, and Deployment (BEAD) (a program created through the Infrastructure Investment and Jobs Act (IIJA, P.L. 117-58), and use the 5G Fund to fund areas that were not funded under BEAD, if it chooses.29 Additional iterations of the map are expected later in 2024. Lifeline Program
Through the Lifeline Program, the FCC provides subsidies to broadband providers to cover Through the Lifeline Program, the FCC provides subsidies to broadband providers to cover
monthly subscription costs for qualified consumers or households. Eligibility is limited to one monthly subscription costs for qualified consumers or households. Eligibility is limited to one
beneficiary per household. Low-income broadband subscribers may qualify for assistance beneficiary per household. Low-income broadband subscribers may qualify for assistance
through this program if they earn less than 135% of the federal poverty level or meet certain other through this program if they earn less than 135% of the federal poverty level or meet certain other
qualifying criteria, such as enrollment in federal nutrition or housing assistance programs. qualifying criteria, such as enrollment in federal nutrition or housing assistance programs.
Lifeline subsidizes beneficiaries via reimbursements to eligible providers to cover monthly Lifeline subsidizes beneficiaries via reimbursements to eligible providers to cover monthly
subscription charges—up to $9.25 per month in most cases; up to $34.25 for those living on tribal subscription charges—up to $9.25 per month in most cases; up to $34.25 for those living on tribal
lands. In many cases, beneficiaries pay nothing out-of-pocket. In other cases, Lifeline providers lands. In many cases, beneficiaries pay nothing out-of-pocket. In other cases, Lifeline providers
may apply the reimbursement to lower the end-user cost of eligible plans that exceed the subsidy may apply the reimbursement to lower the end-user cost of eligible plans that exceed the subsidy
amount. Lifeline does not provide reimbursement for mobile phones or connected computing amount. Lifeline does not provide reimbursement for mobile phones or connected computing
devices, but some providers include smartphones as a marketing incentive with their mobile devices, but some providers include smartphones as a marketing incentive with their mobile
broadband plans. Annual spending varies depending on program enrollments. Enrollment rates broadband plans. Annual spending varies depending on program enrollments. Enrollment rates
vary widely from state to state; nationally, 19% of eligible households—approximately 7.4 vary widely from state to state; nationally, 19% of eligible households—approximately 7.4
million subscribers—benefit from the Lifeline Program.million subscribers—benefit from the Lifeline Program.2730 27 An Open Radio Access Network allows interoperation between cellular network equipment provided by different vendors. 28 FCC, In the Matter of Establishing a 5G Fund for Rural America, Further Notice of Proposed Rulemaking. 29 For additional information, see CRS In Focus IF12429, Broadband Equity, Access, and Deployment (BEAD) Program: Issues and Congressional Considerations, by Ling Zhu, and CRS In Focus IF12298, FCC’s National Broadband Map: Implications for the Broadband Equity, Access, and Deployment (BEAD) Program, coordinated by Colby Leigh Rachfal. 30 USAC, “Program Data”, https://www.usac.org/lifeline/resources/program-data. Congressional Research Service 5 The Future of the Universal Service Fund and Related Broadband Programs
Emergency Broadband Benefit Program/Affordable Connectivity Program
The Emergency Broadband Benefit Program (EBB) was established as a temporary program The Emergency Broadband Benefit Program (EBB) was established as a temporary program
under the Consolidated Appropriations Act, 2021 (P.L. 116-260), funded by an appropriation of under the Consolidated Appropriations Act, 2021 (P.L. 116-260), funded by an appropriation of
$3.2 billion to the FCC to help low-income households pay for broadband service and connected $3.2 billion to the FCC to help low-income households pay for broadband service and connected
internet devices. The EBB supports the goals of the USF, but it is not funded through USF internet devices. The EBB supports the goals of the USF, but it is not funded through USF
contributions. Funding for the EBB was available until expended or until six months after the contributions. Funding for the EBB was available until expended or until six months after the
Coronavirus Disease 2019 (COVID-19) public health emergency was terminated (as declared by Coronavirus Disease 2019 (COVID-19) public health emergency was terminated (as declared by
the Secretary of Health and Human Services). The FCC engaged the USAC to implement the the Secretary of Health and Human Services). The FCC engaged the USAC to implement the
EBB Program. EBB Program.
Under Title V of the Under Title V of the ~~Infrastructure Investment and Jobs Act (IIJA, P.L. 117-58)~~IIJA, the EBB was , the EBB was
renamed the Affordable Connectivity Program (ACP). The sunset provision tied to the COVID-19 renamed the Affordable Connectivity Program (ACP). The sunset provision tied to the COVID-19
pandemic was eliminated. Under the IIJA, Congress appropriated $14.2 billion for the ACP, to pandemic was eliminated. Under the IIJA, Congress appropriated $14.2 billion for the ACP, to
remain available until expended. remain available until expended.
Observers predict that the ACP will run out of funds by the end of April 2024 and the FCC stopped accepting enrollments on February 7, 2024.31 The creation of the EBB in 2021, now transitioned to the ACP, highlighted issues related to the The creation of the EBB in 2021, now transitioned to the ACP, highlighted issues related to the
ongoing and developing connectivity needs of low-income Americans, as well as potential areas ongoing and developing connectivity needs of low-income Americans, as well as potential areas
for improvement and reform of the Lifeline Program. for improvement and reform of the Lifeline Program. ~~ACP as~~As written in statute written in statute, the ACP differs from the differs from the
Lifeline Program in its funding structure, benefits levels, and provider and beneficiary eligibility Lifeline Program in its funding structure, benefits levels, and provider and beneficiary eligibility
requirements.requirements.2832 ACP offers broader and more generous eligibility provisions and significantly ACP offers broader and more generous eligibility provisions and significantly
higher monthly subsidies to cover the cost of residential broadband service—up to $30 in most higher monthly subsidies to cover the cost of residential broadband service—up to $30 in most
cases; up to $75 on tribal lands. In addition, ACP provides one-time discounts of up to $100 for cases; up to $75 on tribal lands. In addition, ACP provides one-time discounts of up to $100 for
connected laptops, desktop computers, or tablets purchased by subscribers from participating connected laptops, desktop computers, or tablets purchased by subscribers from participating
broadband providers. It also expands eligibility criteria for service providers, while imposing broadband providers. It also expands eligibility criteria for service providers, while imposing
public outreach and consumer protection mandates. Finally, ACP supports grant programs in the public outreach and consumer protection mandates. Finally, ACP supports grant programs in the
nonprofit and government sector to expand program outreach to historically nonprofit and government sector to expand program outreach to historically underrepresented communities.33 Rural Health Care Program34 The Rural Health Care (RHC) Program allows rural health care providers to pay rates for internet and telecommunications services similar to those of their urban counterparts, making telehealth services more affordable in rural areas.35 The RHC has two permanent programs, the Healthcare Connect Program and the Telecommunications Program, and a three-year program, the Connected Care Pilot Program.36 The COVID-19 pandemic brought increased attention to the need for 31 FCC, The FCC is Taking Steps to Wind Down the Affordable Connectivity Program, https://www.fcc.gov/fcc-taking-steps-wind-down-affordable-connectivity-program. 32~~underrepresented~~
~~communities.29~~

~~27 USAC, “Program Data”, https://www.usac.org/lifeline/resources/program-data.~~
28 IIJA, Division F, Title V, §60502(a)(2). For additional information on EBB, see CRS Insight IN11612, IIJA, Division F, Title V, §60502(a)(2). For additional information on EBB, see CRS Insight IN11612, The
Emergency Broadband Benefit: Implementation and Future Policy Directions, by Brian E. Humphreys. , by Brian E. Humphreys.
2933 See FCC, “Affordable Connectivity Outreach Grant Program,” https://www.fcc.gov/acp-grants. See FCC, “Affordable Connectivity Outreach Grant Program,” https://www.fcc.gov/acp-grants.
~~Congressional Research Service~~

5

~~The Future of the Universal Service Fund and Related Broadband Programs~~

~~Rural Health Care Program30~~
~~The Rural Health Care (RHC) Program allows rural health care providers to pay rates for internet~~
~~and telecommunications services similar to those of their urban counterparts, making telehealth~~
~~services more affordable in rural areas.31 The RHC has two permanent programs, the Healthcare~~
~~Connect Program and the Telecommunications Program, and a three-year program, the Connected~~
~~Care Pilot Program.32 The COVID-19 pandemic brought increased attention to the need for~~
34 FCC, “Rural Health Care Program,” https://www.fcc.gov/general/rural-health-care-program. 35 The Communications Act of 1934, as amended, defines health care providers as (1) post-secondary educational institutions offering health care instruction, teaching hospitals, and medical schools; (2) community health centers or health centers providing health care to migrants; (3) local health departments or agencies; (4) community mental health centers; (5) not-for-profit hospitals; (7) rural health clinics; (8) skilled nursing facilities; or (9) consortia of health care providers consisting of one or more entities falling into the first seven categories. (47 U.S.C. §254(h)(7)(B)(vi)). 36 In April 2020, the FCC established a three-year Connected Care Pilot Program to provide up to $100 million of support from the USF to help defray eligible health care providers’ costs of providing connected care services and help assess how USF funds might be used to support connected care services. The program is to provide funding for selected (continued...) Congressional Research Service 6 The Future of the Universal Service Fund and Related Broadband Programs reliable high-speed services for health care providers and their patients. The pandemic also reliable high-speed services for health care providers and their patients. The pandemic also
accelerated the adoption of telehealth services, which were seen by some policymakers as accelerated the adoption of telehealth services, which were seen by some policymakers as
increasingly critical in providing health care in rural areas of the country. The FCC set the RHC increasingly critical in providing health care in rural areas of the country. The FCC set the RHC
program funding cap for funding year 2023 program funding cap for funding year 2023 (July 1, 2023, to June 30, 2024) at $6.82 million37 ~~at $6.82 million.33~~
Healthcare Connect Fund Program
The Healthcare Connect Fund (HCF) Program, The Healthcare Connect Fund (HCF) Program,3438 established by the FCC in 2012, supports established by the FCC in 2012, supports
broadband connectivity to eligible health care providers and encourages the establishment of state broadband connectivity to eligible health care providers and encourages the establishment of state
and regional provider networks. Under this program, eligible rural health care providers receive a and regional provider networks. Under this program, eligible rural health care providers receive a
65% discount on internet services. Eligible non-rural health care providers that are members of a 65% discount on internet services. Eligible non-rural health care providers that are members of a
consortium with more than 50% rural health care providers receive the 65% discount as well.consortium with more than 50% rural health care providers receive the 65% discount as well.3539
Telecommunications Program
The Telecommunications Program, The Telecommunications Program,3640 established by the FCC in 1997, subsidizes the difference established by the FCC in 1997, subsidizes the difference
between urban and rural rates within a state for telecommunications and voice services to between urban and rural rates within a state for telecommunications and voice services to
facilitate the use of telemedicine and telehealth.facilitate the use of telemedicine and telehealth.3741 This program provides non-profit or public This program provides non-profit or public
health care providers in rural areas access to telecommunications services at rates reasonably health care providers in rural areas access to telecommunications services at rates reasonably
comparable to rates charged in urban areas of a state. comparable to rates charged in urban areas of a state.

~~30 FCC, “Rural Health Care Program,” https://www.fcc.gov/general/rural-health-care-program.~~
~~31 The Communications Act of 1934, as amended, defines health care providers as (1) post-secondary educational~~
~~institutions offering health care instruction, teaching hospitals, and medical schools; (2) community health centers or~~
~~health centers providing health care to migrants; (3) local health departments or agencies; (4) community mental health~~
~~centers; (5) not-for-profit hospitals; (7) rural health clinics; (8) skilled nursing facilities; or (9) consortia of health care~~
~~providers consisting of one or more entities falling into the first seven categories. (47 U.S.C. §254(h)(7)(B)(vi)).~~
~~32 In April 2020, the FCC established a three-year Connected Care Pilot Program to provide up to $100 million of~~
~~support from the USF to help defray eligible health care providers’ costs of providing connected care services and help~~
~~assess how USF funds might be used to support connected care services. The program is to provide funding for selected~~
Schools and Libraries Program Based on the Telecommunications Act of 1996, the FCC created the Schools and Libraries Program, commonly called the E-Rate Program.42 The program provides needs-based discounts to eligible schools and libraries for telecommunications services (e.g., local and long-distance calling, high-speed lines) and internet access, as well as internal connections (i.e., the equipment to deliver these services), among other services. Eligible schools and libraries may request support for “category one” services, which provide connectivity to schools and libraries, and “category two” services, which provide connectivity within schools and libraries.43 Provision of category one services are prioritized over category two services.44 pilot projects to cover 85% of the eligible costs of broadband connectivity, certain network equipment, and information pilot projects to cover 85% of the eligible costs of broadband connectivity, certain network equipment, and information
services necessary to provide connected care services to the intended patient population. (USAC, “Connected Care services necessary to provide connected care services to the intended patient population. (USAC, “Connected Care
Pilot Program,” https://www.usac.org/rural-health-care/connected-care-pilot-program.) Pilot Program,” https://www.usac.org/rural-health-care/connected-care-pilot-program.)
3337 FCC, FCC, Wireline Competition Bureau Announces E-Rate and RHC Programs’ Inflation-Based Caps for Funding Year
2023, Public Notice, DA-23-178, March 3, 2023, https://www.fcc.gov/document/e-rate-and-rhc-programs-inflation-, Public Notice, DA-23-178, March 3, 2023, https://www.fcc.gov/document/e-rate-and-rhc-programs-inflation-
based-caps-funding-year-2023. (Hereinafter, based-caps-funding-year-2023. (Hereinafter, Wireline Competition Bureau Announces E-Rate and RHC Programs’
Inflation-Based Caps for Funding Year 2023.) .)
3438 FCC, “Healthcare Connect Fund—Frequently Asked Questions,” https://www.fcc.gov/general/healthcare-connect- FCC, “Healthcare Connect Fund—Frequently Asked Questions,” https://www.fcc.gov/general/healthcare-connect-
fund-frequently-asked-questions. fund-frequently-asked-questions.
3539 Ineligible entities are permitted to participate as members of a consortium but cannot receive support from the HCF Ineligible entities are permitted to participate as members of a consortium but cannot receive support from the HCF
Program. Program.
3640 USAC, “Telecommunications Program,” https://www.usac.org/rural-health-care/telecommunications-program. USAC, “Telecommunications Program,” https://www.usac.org/rural-health-care/telecommunications-program.
3741 47 U.S.C. §254(h)(1)(A); 47 C.F.R. §54.601(a). 42 FCC, “E-Rate—Schools and Libraries USF Program,” https://www.fcc.gov/general/e-rate-schools-libraries-usf-program. 43 47 C.F.R. §§ 54.501, 54.502. 44 Category one services include telecommunications, telecommunications services, and internet access. Category two services include internal connections, basic maintenance of internal connections, and managed internal broadband services. See 47 C.F.R. §54.502(a). Congressional Research Service 7 The Future of the Universal Service Fund and Related Broadband Programs ~~47 U.S.C. §254(h)(1)(A); 47 C.F.R. §54.601(a).~~
~~Congressional Research Service~~

6

~~The Future of the Universal Service Fund and Related Broadband Programs~~

~~Schools and Libraries Program~~
~~Based on the Telecommunications Act of 1996, the FCC created the Schools and Libraries~~
~~Program, commonly called the E-Rate Program.38 The program provides needs-based discounts to~~
~~eligible schools and libraries for telecommunications services (e.g., local and long-distance~~
~~calling, high-speed lines) and internet access, as well as internal connections (i.e., the equipment~~
~~to deliver these services), among other services. Eligible schools and libraries may request~~
~~support for “category one” services, which provide connectivity to schools and libraries, and~~
~~“category two” services, which provide connectivity within schools and libraries.39 Provision of~~
~~category one services are prioritized over category two services.~~
In recent years, the FCC refocused the program on providing broadband services, including In recent years, the FCC refocused the program on providing broadband services, including
significantly expanding Wi-Fi access. Discounts range from 20% to 90% based on the poverty significantly expanding Wi-Fi access. Discounts range from 20% to 90% based on the poverty
level of the schools; rural schools and libraries may receive an even higher discount. If demand level of the schools; rural schools and libraries may receive an even higher discount. If demand
for funding is greater than the available funds, funding is allocated based on greatest need, as for funding is greater than the available funds, funding is allocated based on greatest need, as
determined by poverty level. On March 3, 2023, the FCC announced that the E-rate Program determined by poverty level. On March 3, 2023, the FCC announced that the E-rate Program
funding cap for funding year 2023 will be $4.768 billion.funding cap for funding year 2023 will be $4.768 billion.4045
Emergency Connectivity Fund
In addition to the existing E-Rate Program, the American Rescue Plan Act (ARPA, P.L. 117-2) In addition to the existing E-Rate Program, the American Rescue Plan Act (ARPA, P.L. 117-2)
established the $7.171 billion Emergency Connectivity Fund (ECF). The ECF has allowed established the $7.171 billion Emergency Connectivity Fund (ECF). The ECF has allowed
schools and libraries to purchase eligible equipment and services for use by students, school staff, schools and libraries to purchase eligible equipment and services for use by students, school staff,
and library patrons.and library patrons.~~41 The~~ 46 The third and final funding application window for the ECF closed on May 13, 2022;47 funding awards may be used to purchase eligible equipment and services between July 1, 2022, and December 31, 2023. As of November 1, 2023, the program has provided support to approximately program has provided support to approximately 18 million students, 11,500~~11,000~~ schools, 1, schools, 1,~~000~~
070 libraries, and libraries, and ~~100~~128 consortia, and provided nearly 13 million connected devices and over 8 million consortia, and provided nearly 13 million connected devices and over 8 million
broadband connections in all 50 states, the District of Columbia, and U.S. territories.broadband connections in all 50 states, the District of Columbia, and U.S. territories.~~42 The third~~
~~and final43 funding application window for the ECF closed on May 13, 2022; funding awards may~~
~~be used to purchase eligible equipment and services between July 1, 2022, and December 31,~~
~~2023.~~48
The funding provided to the ECF through ARPA was intended as an emergency supplement to the The funding provided to the ECF through ARPA was intended as an emergency supplement to the
E-Rate programE-Rate program, to purchase services and hardware not eligible for E-Rate funding to purchase services and hardware not eligible for E-Rate funding;: specifically, specifically,
broadband connectivity and connected devices for students, school staff, and library patrons broadband connectivity and connected devices for students, school staff, and library patrons
during the COVID-19 emergency period. Other programs created and funded through the IIJA during the COVID-19 emergency period. Other programs created and funded through the IIJA
(P.L. 117-58) are more likely viewed to complement funding available through E-Rate and the (P.L. 117-58) are more likely viewed to complement funding available through E-Rate and the
ECF. For example, states may allocate funds under the ECF. For example, states may allocate funds under the ~~Broadband Equity, Access, and~~
~~Deployment (BEAD) Program (a program at the National Telecommunications and Information~~
~~Administration established by the IIJA) for deploying and upgrading broadband network facilities~~

~~38 FCC, “E-Rate—Schools and Libraries USF Program,” https://www.fcc.gov/general/e-rate-schools-libraries-usf-~~
~~program.~~
~~39 47 C.F.R. §§ 54.501, 54.502.~~
40BEAD Program for deploying and upgrading broadband network facilities to provide or improve broadband service to schools and libraries that lack access to Gigabit-level broadband service.49 Construction of facilities through BEAD grants is a few years away, meaning the FCC may not have data to determine the impact of BEAD projects on the E-Rate Program for a number of years. It is possible that the additional funding, both through the ECF and BEAD grants, could provide significant new infrastructure, which could increase demand for recurring E-Rate funding. USF Program Fund Contributions In accordance with Section 254(d) of the Communications Act, the FCC requires any entity that provides interstate or international telecommunications services to the public for a fee to 45 Wireline Competition Bureau Announces E-Rate and RHC Programs’ Inflation-Based Caps for Funding Year 2023. .
4146 American Rescue Plan Act (ARPA, P.L. 117-2), Title VII, §7402, https://www.congress.gov/bill/117th-congress/ American Rescue Plan Act (ARPA, P.L. 117-2), Title VII, §7402, https://www.congress.gov/bill/117th-congress/
house-bill/1319/text. house-bill/1319/text.
~~42 FCC, FCC Announces over $2.5 Million in Emergency Connectivity Funding for Schools and Libraries, news~~
~~release, April 12, 2023, https://docs.fcc.gov/public/attachments/DOC-392526A1.pdf. A running total of funding~~
~~commitments is available at https://www.fcc.gov/ecf-current-funding-commitments.~~
4347 As demand in the third application filing window exceeded the remaining $1.5 billion in appropriated funding, there As demand in the third application filing window exceeded the remaining $1.5 billion in appropriated funding, there
will not be any additional application filing windows for the Emergency Connectivity Fund (ECF) program. FCC, will not be any additional application filing windows for the Emergency Connectivity Fund (ECF) program. FCC, “FCC
Announces over $2.8 Billion in Funding Requests for Final Window in Ongoing Work to Close the Homework ~~Gap~~,
Gap,” press release, May 25, 2022, https://docs.fcc.gov/public/attachments/DOC-383685A1.pdf. 48 FCC, “FCC Announces over $5 Million in Emergency Connectivity Funding for Schools,” press release, November 1, 2023, https://docs.fcc.gov/public/attachments/DOC-398178A1.pdf. A running total of funding commitments is available at https://www.fcc.gov/ecf-current-funding-commitments. 49 National Telecommunications and Information Administration (NTIA), Broadband Equity, Access, and Deployment Program (BEAD), Notice of Funding Opportunity, May 12, 2022, https://broadbandusa.ntia.doc.gov/sites/default/files/2022-05/BEAD%20NOFO.pdf. Congressional Research Service 8 The Future of the Universal Service Fund and Related Broadband Programs contribute to the USF.50 ~~press release, May 25, 2022, https://docs.fcc.gov/public/attachments/DOC-383685A1.pdf.~~
~~Congressional Research Service~~

7

~~The Future of the Universal Service Fund and Related Broadband Programs~~

~~to provide or improve broadband service to schools and libraries that lack access to Gigabit-level~~
~~broadband service.44 Construction of facilities through BEAD grants is a few years away,~~
~~meaning the FCC may not have data to determine the impact of BEAD projects on the E-Rate~~
~~Program for a number of years. It is possible that the additional funding, both through the ECF~~
~~and BEAD grants, could provide significant new infrastructure, which could increase demand for~~
~~recurring E-Rate funding.~~
~~USF Program Fund Contributions~~
~~In accordance with Section 254(d) of the Communications Act, the FCC requires any entity that~~
~~provides interstate telecommunications services to the public for a fee to contribute to the USF.45~~
The act also grants the FCC permissive authority to assess contributions such that “any other The act also grants the FCC permissive authority to assess contributions such that “any other
provider of interstate telecommunications may be required to contribute to the preservation and provider of interstate telecommunications may be required to contribute to the preservation and
advancement of universal service if the public interest so requires.”advancement of universal service if the public interest so requires.”46 51 Contributions are Contributions are
determined quarterly, calculated based on the ratio of total projected quarterly costs of the determined quarterly, calculated based on the ratio of total projected quarterly costs of the
universal service programs to contributors’ projected interstate and international universal service programs to contributors’ projected interstate and international
telecommunications revenue. Providers may pass through the USF contribution cost to end-telecommunications revenue. Providers may pass through the USF contribution cost to end-
users.users.4752
The amount households pay for the “pass through” has been relatively stable in recent years, but The amount households pay for the “pass through” has been relatively stable in recent years, but
the contribution factor has increased significantly—from 16.7% in the first quarter of the contribution factor has increased significantly—from 16.7% in the first quarter of ~~201748 to~~
~~33.0~~201753 to 34.5% in the % in the ~~third~~fourth quarter of quarter of ~~2022.49~~2023.54 These increases are due in large part to a decline in the These increases are due in large part to a decline in the
contributions revenue base, i.e., providers are reporting a declining share of telecommunications contributions revenue base, i.e., providers are reporting a declining share of telecommunications
revenues and an increasing share of non-telecommunications revenues.revenues and an increasing share of non-telecommunications revenues.5055 USF demand and USF demand and
disbursements, however, have remained relatively stable over the past decade—in 2012, USF disbursements, however, have remained relatively stable over the past decade—in 2012, USF
disbursements were $8.71 billiondisbursements were $8.71 billion~~, and~~; in in ~~2020~~2022, disbursements were $ disbursements were $~~8.27~~7.44 billion. billion.5156 These figures These figures
~~might~~ indicate that the declining contribution base indicate that the declining contribution base ismay be the primary driver of the increased the primary driver of the increased
contribution factor, rather than increased demand from consumers. contribution factor, rather than increased demand from consumers.

~~44 National Telecommunications and Information Administration (NTIA),~~ ~~Broadband Equity, Access, and Deployment~~
~~Program (BEAD), Notice of Funding Opportunity, May 12, 2022, https://broadbandusa.ntia.doc.gov/sites/default/files/~~
~~2022-05/BEAD%20NOFO.pdf.~~
45 Legislative Activity in the 118th Congress During the 118th Congress, five bills have been introduced that would affect USF programs, and one hearing has been held. The Lowering Broadband Costs for Consumers Act (S. 3321) Senator Markwayne Mullin introduced the Lowering Broadband Costs for Consumers Act (S. 3321) on November 15, 2023. The bill would require certain edge providers to contribute to the USF. Specific provisions would require the FCC to— • complete a rulemaking within 18 months to authorize assessing edge providers for USF contributions; • expand the contribution base so that broadband providers and edge providers contribute on an equitable and nondiscriminatory basis to preserve and advance the USF programs; and 50 The Communications Act of 1934, as amended, directs that every telecommunications carrier that provides interstate The Communications Act of 1934, as amended, directs that every telecommunications carrier that provides interstate
telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the specific, predictable,
and sufficient mechanisms established by the FCC to preserve and advance universal service. 47 U.S.C. §254(d). For and sufficient mechanisms established by the FCC to preserve and advance universal service. 47 U.S.C. §254(d). For
more detail on the contribution rates, see CRS Legal Sidebar LSB10904, more detail on the contribution rates, see CRS Legal Sidebar LSB10904, Fifth Circuit Considers Constitutionality of
the Universal Service Fund, by Chris D. Linebaugh. , by Chris D. Linebaugh.
4651 47 U.S.C. §254(d). For example, in 2006, the FCC relied on this authority to require interconnected Voice over 47 U.S.C. §254(d). For example, in 2006, the FCC relied on this authority to require interconnected Voice over
Internet Protocol providers to contribute as a means of ensuring a level playing field among direct competitors. Internet Protocol providers to contribute as a means of ensuring a level playing field among direct competitors.
4752 47 C.F.R. §54.712. 47 C.F.R. §54.712.
48 FCC, Proposed First Quarter 2017 Universal Service Contribution Factor 53 FCC, Office of Managing Director Announces 4th Quarter USF Contribution Factor Is 34.5 Percent (CC Docket 96-45, DA-(CC Docket 96-45, DA-~~16-1367~~23-843), Public ), Public
~~Notice), December 9, 2016, https://www.fcc.gov/document/proposed-first-quarter-2017-usf-contribution-factor-167-~~
~~percent.~~
~~49 FCC,~~ ~~Proposed Third Quarter 2022~~Notice, September 13, 2023, https://docs.fcc.gov/public/attachments/DA-23-843A1.pdf. 54 FCC, Proposed Fourth Quarter 2023 Universal Service Contribution Factor (CC Docket 96-45, DA-(CC Docket 96-45, DA-~~22-623~~23-843), Public ), Public
Notice, Notice, ~~June 9, 2022~~September 12, 2023, https://www.fcc.gov/document/omd-announces-, https://www.fcc.gov/document/omd-announces-~~usf-3q~~4th-quarter-usf-contribution-factor--contribution-factor-~~33-~~345-percent. percent.
5055 FCC, FCC, Universal Service Monitoring Report, , 2021,, Table 1.1, https://docs.fcc.gov/public/attachments/DOC-Table 1.1, https://docs.fcc.gov/public/attachments/DOC-
379181A1.pdf. (Hereinafter, 379181A1.pdf. (Hereinafter, “Universal Service Monitoring Report, , 2021.)
~~51 FCC,~~ ~~Universal Service Monitoring~~.”) 56 USAC, Annual Report~~, 2021,~~ ~~Table 1.10~~, 2022, https://www.usac.org/wp-content/uploads/about/documents/annual-reports/2022/USAC_2022_Annual_Report.pdf. .
Congressional Research Service Congressional Research Service

89

The Future of the Universal Service Fund and Related Broadband Programs

~~Legislative Activity in the 118th Congress~~
~~During the 118th Congress, four bills have been introduced that would affect USF programs, and~~
~~one hearing has been held~~• assess edge providers when they have more than 3% of the estimated quantity of broadband data transmitted in the United States and more than $5 billion in annual revenue (however, the bill does not outline how to do conduct the assessment and would exempt entities that do not meet the traffic and revenue thresholds). The bill would not grant the FCC any other authority over edge providers or any new authority over broadband providers; it was referred to the Committee on Commerce, Science, and Transportation on November 15, 2023. .
Rural Broadband Protection Act of 2023 (S. 275)
The Rural Broadband Protection Act of 2023 was introduced by Senator Shelley Moore Capito on The Rural Broadband Protection Act of 2023 was introduced by Senator Shelley Moore Capito on
February 7, 2023. The bill would require the FCC to establish a process to vet applicants seeking February 7, 2023. The bill would require the FCC to establish a process to vet applicants seeking
funding under the high-cost universal service programs. funding under the high-cost universal service programs.
Referred to the Committee on Commerce, Science, and Transportation. Referred to the Committee on Commerce, Science, and Transportation.
FAIR Contributions Act (S. 856)
The FAIR Contributions Act was introduced by Senator Roger Wicker on March 16, 2023. The The FAIR Contributions Act was introduced by Senator Roger Wicker on March 16, 2023. The
bill would require the FCC to study and report on the feasibility of funding the USF through bill would require the FCC to study and report on the feasibility of funding the USF through
contributions from edge providers (i.e., providers of online content or services, such as search contributions from edge providers (i.e., providers of online content or services, such as search
engines). engines).
The report would require the FCC to consider (1) the type and size of firms and services on which The report would require the FCC to consider (1) the type and size of firms and services on which
contributions could be assessed, (2) equity issues related to current versus alternative systems for contributions could be assessed, (2) equity issues related to current versus alternative systems for
contributing to the fund, (3) the effect of any change to the contribution system on the contributing to the fund, (3) the effect of any change to the contribution system on the
telecommunications bills of consumers, and (4) the sustainability of the fund and how to ensure telecommunications bills of consumers, and (4) the sustainability of the fund and how to ensure
that fund disbursements are consistent and predictable over time. that fund disbursements are consistent and predictable over time.
Referred to the Senate Committee on Commerce, Science, and Transportation. Referred to the Senate Committee on Commerce, Science, and Transportation.
Reforming Broadband Connectivity Act of 2023 (S. 975 and H.R.
1812)
The Reforming Broadband Connectivity Act of 2023 was introduced by Senator Amy Klobuchar The Reforming Broadband Connectivity Act of 2023 was introduced by Senator Amy Klobuchar
on March 27, 2023, and Representative Joe Neguse on March 7, 2023. This bill would require the on March 27, 2023, and Representative Joe Neguse on March 7, 2023. This bill would require the
FCC to make changes to the financing of the USF. The USF is financed by fees contributed by FCC to make changes to the financing of the USF. The USF is financed by fees contributed by
telecommunications carriers, and supports programs to expand the availability of and access to telecommunications carriers, and supports programs to expand the availability of and access to
telecommunications services. telecommunications services.
Specifically, the bill directs the FCC to (1) study the need for expanding the fund’s contribution Specifically, the bill directs the FCC to (1) study the need for expanding the fund’s contribution
base to ensure fairness and equity in applicable contribution requirements, and (2) reform the base to ensure fairness and equity in applicable contribution requirements, and (2) reform the
fund’s contribution system through rulemaking. In carrying out the rulemaking, the FCC must fund’s contribution system through rulemaking. In carrying out the rulemaking, the FCC must
consider the findings and recommendations of its study and the impact of changes on consumers, consider the findings and recommendations of its study and the impact of changes on consumers,
businesses, and seniors. businesses, and seniors.
Referred to the Senate Committee on Commerce, Science, and Transportation and the House Referred to the Senate Committee on Commerce, Science, and Transportation and the House
Energy and Commerce Committee Subcommittee on Communications and Technology. Energy and Commerce Committee Subcommittee on Communications and Technology.
Congressional Research Service 10 The Future of the Universal Service Fund and Related Broadband Programs Senate Hearing, “The State of Universal Service”
On May 11, 2023, the Senate Committee on Commerce, Science, and Transportation On May 11, 2023, the Senate Committee on Commerce, Science, and Transportation
Subcommittee on Communications, Media, and Broadband, held a hearing, “The State of Subcommittee on Communications, Media, and Broadband, held a hearing, “The State of
~~Congressional Research Service~~

9

~~The Future of the Universal Service Fund and Related Broadband Programs~~

~~Universal Service.”52~~Universal Service.”57 The hearing examined the need for connectivity in rural and insular areas, The hearing examined the need for connectivity in rural and insular areas,
for health professionals in providing telemedicine and telehealth, for low-income households that for health professionals in providing telemedicine and telehealth, for low-income households that
otherwise could not afford internet access and for access to broadband in the nation’s schools and otherwise could not afford internet access and for access to broadband in the nation’s schools and
libraries. One topic discussed was the continuity of ACP funding. The initial funding of $14.2 libraries. One topic discussed was the continuity of ACP funding. The initial funding of $14.2
billion, appropriated through the IIJA, is expected to run out during the first or second quarter of billion, appropriated through the IIJA, is expected to run out during the first or second quarter of
2024. Some lawmakers expressed concern that the FCC has not sufficiently accounted for how 2024. Some lawmakers expressed concern that the FCC has not sufficiently accounted for how
ACP funds have been spent to date. Before committing additional funds to the program, they said ACP funds have been spent to date. Before committing additional funds to the program, they said
they wanted to wait for the results of an Office of Inspector General review of the FCC’s they wanted to wait for the results of an Office of Inspector General review of the FCC’s
management of COVID-19 broadband funds; that review was due on June 1, 2023. Other management of COVID-19 broadband funds; that review was due on June 1, 2023. Other
lawmakers noted the complexity of the challenge of increasing connectivity through the ACP and lawmakers noted the complexity of the challenge of increasing connectivity through the ACP and
other broadband programs, and expressed continued support for these programs.other broadband programs, and expressed continued support for these programs.5358 The hearing The hearing
also explored potential reforms aimed at ensuring the future effectiveness of the USF and the also explored potential reforms aimed at ensuring the future effectiveness of the USF and the
status of a status of a ~~GAO~~Government Accountability Office (GAO) examination, due November 10, 2023, regarding previous recommendations to examination, due November 10, 2023, regarding previous recommendations to
the agency about USF accounting. the agency about USF accounting.
Considerations for Congress
In response to continuing increases in the USF contribution factor over time, policymakers have In response to continuing increases in the USF contribution factor over time, policymakers have
considered numerous proposals to improve and maintain the fund’s viability. The FCC has considered numerous proposals to improve and maintain the fund’s viability. The FCC has
proposed five areas for possible reform: the High Cost Program; Lifeline and the ACP; E-Rate proposed five areas for possible reform: the High Cost Program; Lifeline and the ACP; E-Rate
and ECP; the Rural Health Care Program; and USF contributions. Each is discussed below. and ECP; the Rural Health Care Program; and USF contributions. Each is discussed below.
High Cost Program
The COVID-19 pandemic magnified the issue of who had access to broadband and who did not, The COVID-19 pandemic magnified the issue of who had access to broadband and who did not,
as social distancing moved activities such as school and work online. This left many Americans as social distancing moved activities such as school and work online. This left many Americans
who were without broadband access to seek alternatives, such as sitting in parking lots outside who were without broadband access to seek alternatives, such as sitting in parking lots outside
restaurants or libraries to access Wi-Fi connections.restaurants or libraries to access Wi-Fi connections.5459 In response, Congress provided billions in In response, Congress provided billions in
funding and established new programs to aid in expanding broadband to areas that lacked it.funding and established new programs to aid in expanding broadband to areas that lacked it.5560
In particular, Congress authorized appropriations of $65 billion in the IIJA for various broadband In particular, Congress authorized appropriations of $65 billion in the IIJA for various broadband
programs. Of this funding, $42.45 billion was allocated to the BEAD program, to be administered programs. Of this funding, $42.45 billion was allocated to the BEAD program, to be administered
by NTIAby NTIA~~, an agency within the Department of Commerce.56~~.61 According to the FCC, According to the FCC,

5257 U.S. Senate Committee on Commerce, Science, and Transportation Subcommittee on Communications, Media and U.S. Senate Committee on Commerce, Science, and Transportation Subcommittee on Communications, Media and
Broadband, “The State of Universal Service,” hearing, May 11, 2023, https://www.commerce.senate.gov/2023/5/the-Broadband, “The State of Universal Service,” hearing, May 11, 2023, https://www.commerce.senate.gov/2023/5/the-
state-of-universal-service. state-of-universal-service.
5358 Jimm Phillips, “Latta, Thune Undecided on ACP Future; House Subpanel Eyes Fed Broadband Changes,” Jimm Phillips, “Latta, Thune Undecided on ACP Future; House Subpanel Eyes Fed Broadband Changes,”
Communications Daily, May 11, 2023, https://communicationsdaily.com. (Hereinafter, “Latta, Thune Undecided on Communications Daily, May 11, 2023, https://communicationsdaily.com. (Hereinafter, “Latta, Thune Undecided on
ACP Future; House Subpanel Eyes Fed Broadband Changes.”) ACP Future; House Subpanel Eyes Fed Broadband Changes.”)
5459 Kang, Cecilia, “Parking Lots Have Become a Digital Lifeline,” May 20, 2020, https://www.nytimes.com/2020/05/05/ Kang, Cecilia, “Parking Lots Have Become a Digital Lifeline,” May 20, 2020, https://www.nytimes.com/2020/05/05/
technology/parking-lots-wifi-coronavirus.html. technology/parking-lots-wifi-coronavirus.html.
5560 See CRS In Focus IF12030, See CRS In Focus IF12030, The Broadband Digital Divide: What Comes Next for Congress?, by Colby Leigh , by Colby Leigh
Rachfal. Rachfal.
5661 NTIA, NTIA, The Broadband Equity, Access, and Deployment (BEAD) Program Overview, https://www.internetforall.gov/, https://www.internetforall.gov/
sites/default/files/2022-05/BEAD%20Info%20Sheet%20-%20IFA%20Launch%20-%20Final.pdf. See also CRS Report sites/default/files/2022-05/BEAD%20Info%20Sheet%20-%20IFA%20Launch%20-%20Final.pdf. See also CRS Report
~~R47075, The National Telecommunications and Information Administration (NTIA): Current Roles and Programs, by~~
~~Ling Zhu.~~(continued...)
Congressional Research Service Congressional Research Service

1011

The Future of the Universal Service Fund and Related Broadband Programs

this infusion of new capital and administrative resources will move the United States closer this infusion of new capital and administrative resources will move the United States closer
to near ubiquitous deployment of advanced telecommunications services, thus materially to near ubiquitous deployment of advanced telecommunications services, thus materially
impacting the need to support infrastructure development.impacting the need to support infrastructure development.5762
In light of this prospect, the FCC has In light of this prospect, the FCC has ~~contemplated the future of the USF, including reorientation~~
~~of the High Cost Program. To this end, the FCC has proposed initiation~~proposed initiating of a proceeding at the of a proceeding at the
agency toagency to:
• consider future support needs of high cost and other hard to serve areas, to • consider future support needs of high cost and other hard to serve areas, to
include if, when, and under what circumstances continuing support may be include if, when, and under what circumstances continuing support may be
necessary; necessary;
• develop strategies to ensure that consumers in high cost areas have affordable • develop strategies to ensure that consumers in high cost areas have affordable
access comparable to what is offered in urban areas; access comparable to what is offered in urban areas;
• examine potential funding mechanisms that could bridge any remaining • examine potential funding mechanisms that could bridge any remaining
deployment gaps; deployment gaps;
• anticipate funding needs for existing and future providers and consider the • anticipate funding needs for existing and future providers and consider the
creation of new support; and creation of new support; and
• consider sustainability support for providers for ongoing operating and • consider sustainability support for providers for ongoing operating and
maintenance costs. maintenance costs.58
~~The Government Accountability Office (GAO)~~63 GAO made several recommendations in its October made several recommendations in its October
2020 report titled 2020 report titled FCC Should Enhance Performance Goals and Measures for Its Program to
Support Broadband Service in High-Cost Areas. These recommendations include, for example, . These recommendations include, for example,
revising high-cost performance goals so that they are measurable and quantifiable, ensuring high-revising high-cost performance goals so that they are measurable and quantifiable, ensuring high-
cost performance measures align with key attributes of successful performance measures, and cost performance measures align with key attributes of successful performance measures, and
publicly and periodically reporting on the progress of performance goals.publicly and periodically reporting on the progress of performance goals.5964 GAO indicates that GAO indicates that
these recommendations remain open.these recommendations remain open.6065
As FCC efforts unfold to consider reorientation of the High Cost Program, Congress may take an As FCC efforts unfold to consider reorientation of the High Cost Program, Congress may take an
interest in monitoring the FCC’s efforts and whether legislative action might be necessary to interest in monitoring the FCC’s efforts and whether legislative action might be necessary to
provide congressional direction. Congress might consider several potential options for the High provide congressional direction. Congress might consider several potential options for the High
Cost Program, discussed below. Cost Program, discussed below.
While numerous programs provide funding for deployment of broadband infrastructure, one While numerous programs provide funding for deployment of broadband infrastructure, one
option for reorientation of the High Cost Program could be a pivot from support for deployment option for reorientation of the High Cost Program could be a pivot from support for deployment
costs to support for operation and maintenance costs to sustain networks. This concept is costs to support for operation and maintenance costs to sustain networks. This concept is
supported, for example, by NTCA—The Rural Broadband Association,supported, for example, by NTCA—The Rural Broadband Association,6166 as well as a number of as well as a number of
other interest groups representing various broadband constituencies.other interest groups representing various broadband constituencies.6267 Other interest groups urged Other interest groups urged
postponing any program changes until the FCC had assessed the impact of IIJA funding on postponing any program changes until the FCC had assessed the impact of IIJA funding on
broadband deployment.broadband deployment.6368 Congress could wait until the FCC makes an assessment through the Congress could wait until the FCC makes an assessment through the

~~57 FCC USF Report.~~
~~58 Ibid.~~
59R47075, The National Telecommunications and Information Administration (NTIA): Current Roles and Programs, by Ling Zhu. 62 FCC USF Report. 63 Ibid. 64 Government Accountability Office (GAO), Government Accountability Office (GAO), FCC Should Enhance Performance Goals and Measures for Its Program
to Support Broadband Service in High-Cost Areas (GAO-21-24), October 30, 2020, https://www.gao.gov/products/(GAO-21-24), October 30, 2020, https://www.gao.gov/products/
gao-21-24. gao-21-24.
6065 Ibid. Ibid.
6166 NTCA—The Rural Broadband Association, NTCA—The Rural Broadband Association, NTCA Statement on FCC Future of USF Report, August 16, 2022, , August 16, 2022,
https://www.ntca.org/ruraliscool/newsroom/press-releases/2022/16/ntca-statement-fcc-future-usf-report. https://www.ntca.org/ruraliscool/newsroom/press-releases/2022/16/ntca-statement-fcc-future-usf-report.
6267 FCC USF Report. .
6368 FCC USF Report. .
Congressional Research Service Congressional Research Service

1112

The Future of the Universal Service Fund and Related Broadband Programs

above-proposed proceeding, or Congress could require the FCC to initiate a public proceeding on above-proposed proceeding, or Congress could require the FCC to initiate a public proceeding on
this specific issue and provide a report to Congress within a specified timeframe. this specific issue and provide a report to Congress within a specified timeframe.
Many tribal lands lack the broadband infrastructure needed to provide connectivity for broadband Many tribal lands lack the broadband infrastructure needed to provide connectivity for broadband
services. In the January 2020 RDOF Report and Order, while the FCC recognized “the difficulty services. In the January 2020 RDOF Report and Order, while the FCC recognized “the difficulty
tribal lands have faced in obtaining broadband deployment”—and although tribal entities were tribal lands have faced in obtaining broadband deployment”—and although tribal entities were
eligible—there was no tribal entity priority in the application or bidding process for RDOF.eligible—there was no tribal entity priority in the application or bidding process for RDOF.6469
Tribal entities are eligible (among other eligible entities) for other federal broadband programs. Tribal entities are eligible (among other eligible entities) for other federal broadband programs.
There is one program administered by the NTIA—the Tribal Broadband Connectivity Program There is one program administered by the NTIA—the Tribal Broadband Connectivity Program
(TBCP)—which is available only to tribal entities.(TBCP)—which is available only to tribal entities.~~65 In September 2021, NTIA announced that it~~
~~had received more than 280 applications under the TBCP, for a total of over $5 billion (at the~~
~~time, $980 million was available for the program, as provided through the Consolidated~~
~~Appropriations Act, 2021 (P.L. 116-260)).66~~ 70 The Consolidated Appropriations Act, 2021 (P.L. 116-260)71 appropriated $1 billion for the TBCP. The IIJA subsequently appropriated an additional $2 billion for the program. Of this $3 billion total, NTIA has awarded approximately $1.87 billion to 226 tribal broadband projects since its first Notice of Funding Opportunity (NOFO) issued in June 2021. NTIA announced the second NOFO in July 2023 to distribute the remaining $980 million of the TBCP funding. The application window is to close on January 23, 2024. As it appears that demand for a program focused on As it appears that demand for a program focused on
tribal broadband is high, Congress could weigh whether to refocus the High Cost Program on tribal broadband is high, Congress could weigh whether to refocus the High Cost Program on
tribal areas, or create a tribal entity priority for the program for the application process, bidding tribal areas, or create a tribal entity priority for the program for the application process, bidding
process, or both. In 2020, the FCC implemented a tribal priority window, which provided an process, or both. In 2020, the FCC implemented a tribal priority window, which provided an
opportunity for tribes to directly access specified spectrum (in the 2.5 GHz band) over their rural opportunity for tribes to directly access specified spectrum (in the 2.5 GHz band) over their rural
tribal lands.tribal lands.6772 A similar priority for funding of broadband deployment on tribal lands could A similar priority for funding of broadband deployment on tribal lands could
complement tribal spectrum efforts and help tribes meet the buildout requirements specified in complement tribal spectrum efforts and help tribes meet the buildout requirements specified in
their licenses. their licenses.
~~The release of the pre-production version of the~~In November 2023, the FCC released the third iteration of its National Broadband Map.73 The updated information may allow the FCC to ~~National Broadband Map, containing specific~~
~~location-level data on where broadband is available, along with ongoing challenges, may help the~~
~~FCC~~ better evaluate future funding needs of high cost areas, including whether future planned better evaluate future funding needs of high cost areas, including whether future planned
processes, such as RDOF Phase II, remain necessary.processes, such as RDOF Phase II, remain necessary.68 74 As there has been a renewed focus in the As there has been a renewed focus in the
118th Congress on 118th Congress on network redundancy and potential duplication of funding,redundancy and potential duplication of funding,6975 Congress could consider Congress could consider
whether to eliminate the High Cost Program, and instead make recently enacted broadband whether to eliminate the High Cost Program, and instead make recently enacted broadband
deployment programs deployment programs created in the IIJA—for example, the BEAD or Enabling Middle Mile Grant in the IIJA—for example, the BEAD or Enabling Middle Mile Grant
Program—permanent programs with annual appropriations. Elimination of the High Cost Program—permanent programs with annual appropriations. Elimination of the High Cost
Program could provide potential benefits, such as lowering monthly rates for telecommunications Program could provide potential benefits, such as lowering monthly rates for telecommunications
~~subscribers70~~subscribers76 and lessening the potential for and lessening the potential for ~~overlap with other broadband deployment~~
~~programs.71 Further, some states, such as Texas and Pennsylvania, have their own state-specific~~

64 69 See FCC, See FCC, In the Matter of the Rural Digital Opportunity Fund, Report and Order, January 30, 2020, p. 16, , Report and Order, January 30, 2020, p. 16,
https://docs.fcc.gov/public/attachments/FCC-20-5A1.pdf. https://docs.fcc.gov/public/attachments/FCC-20-5A1.pdf.
6570 NTIA, BroadbandUSA, NTIA, BroadbandUSA, Tribal Broadband Connectivity Program, https://broadbandusa.ntia.doc.gov/funding-, https://broadbandusa.ntia.doc.gov/funding-
programs/tribal-broadband-connectivity. programs/tribal-broadband-connectivity.
6671 NTIA, BroadbandUSA, NTIA, BroadbandUSA, NTIA’s Tribal Broadband Connectivity Program Receives More Than 280 Applications,
over $5 Billion in Funding Requests, September 8, 2021, https://ntia.gov/press-release/2021/ntia-s-tribal-broadband-, September 8, 2021, https://ntia.gov/press-release/2021/ntia-s-tribal-broadband-
connectivity-program-receives-more-280-applications-over. connectivity-program-receives-more-280-applications-over.
6772 FCC, FCC, Rural Tribal Window Updates, https://www.fcc.gov/rural-tribal-window-updates. , https://www.fcc.gov/rural-tribal-window-updates.
~~68 Ibid.~~
6973 FCC, Broadband Funding Map, https://broadbandmap.fcc.gov/home. 74 FCC, Rural Tribal Window Updates, https://www.fcc.gov/rural-tribal-window-updates. 75 For example, see letter from Senators Ben Ray Luján and John Thune to the Honorable Gene L. Dodaro, April 24, For example, see letter from Senators Ben Ray Luján and John Thune to the Honorable Gene L. Dodaro, April 24,
2023, https://www.thune.senate.gov/public/_cache/files/e660b0df-8389-4f87-b235-2ad7dd2cad28/2023, https://www.thune.senate.gov/public/_cache/files/e660b0df-8389-4f87-b235-2ad7dd2cad28/
B461F65991D60CFD7D05BB1571907007.4.24.2023-thune-lujan-letter-to-gao.pdf. B461F65991D60CFD7D05BB1571907007.4.24.2023-thune-lujan-letter-to-gao.pdf.
7076 Of the four USF programs, the High Cost Program is consistently authorizes the most funding to be disbursed. See Of the four USF programs, the High Cost Program is consistently authorizes the most funding to be disbursed. See
USAC, USAC, Annual Report, https://www.usac.org/about/reports-orders/annual-report/. , https://www.usac.org/about/reports-orders/annual-report/.
~~71 Jeffrey Westling, Comments on the “Report on the Future of the Universal Service Fund,” American Action Forum,~~
~~Comments for the Record, February 17, 2022, https://www.americanactionforum.org/comments-for-record/comments-~~
~~on-the-report-on-the-future-of-the-universal-service-fund/.~~
~~Congressional Research Service~~

12Congressional Research Service 13

The Future of the Universal Service Fund and Related Broadband Programs

~~USF,72~~overlap with other broadband deployment programs.77 Further, some states, such as Texas and Pennsylvania, have their own state-specific USFs,78 in which funds are used for universal service efforts at the state and local level. These state in which funds are used for universal service efforts at the state and local level. These state
USF funds could be duplicative of federal USF efforts. States without a state-level USF USF funds could be duplicative of federal USF efforts. States without a state-level USF
programs, however, may rely exclusively on the federal programs, however, may rely exclusively on the federal USF~~USF funding~~. .
Since much of the funding Congress has provided focuses on deploying fixed broadband Since much of the funding Congress has provided focuses on deploying fixed broadband
infrastructure, the FCC sees an opportunity to proceed with providing support for mobile infrastructure, the FCC sees an opportunity to proceed with providing support for mobile
broadband through a competitive process (e.g., potentially through the 5G Fund for Rural broadband through a competitive process (e.g., potentially through the 5G Fund for Rural
America); however, the FCC acknowledged that an evaluation of the impact of the BEAD and America); however, the FCC acknowledged that an evaluation of the impact of the BEAD and
other broadband programs on future mobile deployments may be beneficial.other broadband programs on future mobile deployments may be beneficial.~~73 With the recent~~
~~release of the FCC’s~~79 The latest iteration of the National Broadband Map National Broadband Map, may allow both the FCC and Congress both the FCC and Congress ~~may be able~~ to better to better
visualize how federal investments are closing the digital divide, and which of these programs may visualize how federal investments are closing the digital divide, and which of these programs may
be the most effective.be the most effective.7480 Further, with many federal broadband programs targeted to the Further, with many federal broadband programs targeted to the
deployment of fixed broadband, another consideration for Congress may be whether to transition deployment of fixed broadband, another consideration for Congress may be whether to transition
the high cost program to focus entirely on mobile broadband deployment. Although the planned the high cost program to focus entirely on mobile broadband deployment. Although the planned
5G Fund for Rural America may provide up to $9 billion, some providers have described that 5G Fund for Rural America may provide up to $9 billion, some providers have described that
figure as “nowhere near enough.”figure as “nowhere near enough.”7581
Another issue Congress may take an interest in monitoring is where the money left over from Another issue Congress may take an interest in monitoring is where the money left over from
RDOF defaults may go next. According to an estimate from broadband consultant Cooperative RDOF defaults may go next. According to an estimate from broadband consultant Cooperative
Network Services, “of the $9.2 billion ... tentatively won in the auction, over $2.8 billion has Network Services, “of the $9.2 billion ... tentatively won in the auction, over $2.8 billion has
gone into default.”gone into default.”7682 Some stakeholders and policymakers have deemed the RDOF Phase I Some stakeholders and policymakers have deemed the RDOF Phase I
auction unsuccessful, due to issues such as the FCC’s lack of scrutiny for vetting bidders before auction unsuccessful, due to issues such as the FCC’s lack of scrutiny for vetting bidders before
the auction.the auction.7783 This may have played a role in the shift of recent broadband efforts (e.g., broadband This may have played a role in the shift of recent broadband efforts (e.g., broadband
funding in ARPA and the IIJA) from the FCC to other agencies, such as NTIA and the U.S. funding in ARPA and the IIJA) from the FCC to other agencies, such as NTIA and the U.S.
Department of the Treasury. Congress could, for example, hold a hearing on this issue to examine Department of the Treasury. Congress could, for example, hold a hearing on this issue to examine
the reasons for defaults, assess the FCC’s administration of the program, and explore whether the reasons for defaults, assess the FCC’s administration of the program, and explore whether
leftover funding should be added to a future phase of RDOF, or whether this funding should be leftover funding should be added to a future phase of RDOF, or whether this funding should be
diverted to other purposes, such as potential options described above. diverted to other purposes, such as potential options described above.
Congress could also choose to leave the High Cost Program in place within its current Congress could also choose to leave the High Cost Program in place within its current
framework. framework.
~~Lifeline and the Affordable Connectivity Programs~~
~~Significant differences between the Lifeline Program and ACP prompted the FCC to consider~~
~~how the programs can best operate with each other, applying lessons learned from EBB and ACP~~

72 77 Jeffrey Westling, Comments on the “Report on the Future of the Universal Service Fund,” American Action Forum, Comments for the Record, February 17, 2022, https://www.americanactionforum.org/comments-for-record/comments-on-the-report-on-the-future-of-the-universal-service-fund/. 78 For example, see Public Utility Commission of Texas, For example, see Public Utility Commission of Texas, Helpful Information About the Texas Universal Service Fund, ,
https://www.puc.texas.gov/industry/communications/reports/tusf/default.aspx and Pennsylvania Public Utility https://www.puc.texas.gov/industry/communications/reports/tusf/default.aspx and Pennsylvania Public Utility
Commission, Commission, PA Universal Service Fund, https://www.puc.pa.gov/telecommunications/pa-universal-service-fund/. , https://www.puc.pa.gov/telecommunications/pa-universal-service-fund/.
7379 Ibid. Ibid.
7480 FCC, FCC, Broadband Funding Map, https://, https://~~fundingmap~~broadbandmap.fcc.gov/home. .fcc.gov/home.
7581 Mike Dano, Mike Dano, Rural US Wireless Carriers Ask for More 5G Subsidies, LightReading, July 22, 2022, , LightReading, July 22, 2022,
https://www.lightreading.com/digital-divide/rural-us-wireless-carriers-ask-for-more-5g-subsidies/d/d-id/779195. https://www.lightreading.com/digital-divide/rural-us-wireless-carriers-ask-for-more-5g-subsidies/d/d-id/779195.
7682 That is, recipients failed to execute the projects they were funded to perform. Joan Engebretson, That is, recipients failed to execute the projects they were funded to perform. Joan Engebretson, RDOF Defaults
Estimate: Over $2.8B—What Happens to That Money?, Telecompetitor, May 22, 2023, , Telecompetitor, May 22, 2023,
https://www.telecompetitor.com/rdof-defaults-estimate-over-2-8b-what-happens-to-that-money/?. https://www.telecompetitor.com/rdof-defaults-estimate-over-2-8b-what-happens-to-that-money/?.
7783 Diana Goovaerts, Diana Goovaerts, RDOF Postmortem: Can the FCC Fix These Problems in Phase II?, Fierce Telecom, September 1, , Fierce Telecom, September 1,
2021, https://www.fiercetelecom.com/regulatory/rdof-postmortem-fcc-fix-problems-phase-II. 2021, https://www.fiercetelecom.com/regulatory/rdof-postmortem-fcc-fix-problems-phase-II.
Congressional Research Service Congressional Research Service

1314

link to page link to page 1214 link to page link to page 1214 The Future of the Universal Service Fund and Related Broadband Programs

Lifeline and the Affordable Connectivity Program Significant differences between the Lifeline Program and ACP prompted the FCC to consider how the programs could best operate with each other, applying lessons learned from EBB and ACP implementation.84~~implementation.78~~ In its In its FCC Report on the Future of the Universal Service Fund,,7985 the FCC the FCC
suggested that it might consider expanding Lifeline consumer eligibility requirements to align suggested that it might consider expanding Lifeline consumer eligibility requirements to align
with the less-restrictive ACP requirements. It also recommended deferring consideration of with the less-restrictive ACP requirements. It also recommended deferring consideration of
relaxing Lifeline provider eligibility requirements to align with ACP, pending further evaluation.relaxing Lifeline provider eligibility requirements to align with ACP, pending further evaluation.8086
Additionally, the report recommended that the FCC consider requesting congressional action to Additionally, the report recommended that the FCC consider requesting congressional action to
“facilitate and fund” Lifeline consumer outreach programs similar to those established for ACP, “facilitate and fund” Lifeline consumer outreach programs similar to those established for ACP,
and establish consumer protection provisions for Lifeline based on those established for ACP. and establish consumer protection provisions for Lifeline based on those established for ACP. 8187
These recommendations, if adopted, might affect stakeholders in different ways depending on These recommendations, if adopted, might affect stakeholders in different ways depending on
their implementation. Some commenters on the FCC report recommended that the their implementation. Some commenters on the FCC report recommended that the ~~Commission~~commission
fold ACP into Lifeline, or vice versa, while others recommended refocusing each program on a fold ACP into Lifeline, or vice versa, while others recommended refocusing each program on a
specific type of service.specific type of service.~~82 Some~~88 Other observers have suggested that—as a matter of practice—Lifeline observers have suggested that—as a matter of practice—Lifeline
is used by subscribers as a basic smartphone and mobile data plan, even though it may also be is used by subscribers as a basic smartphone and mobile data plan, even though it may also be
used for fixed residential broadband and voice-only service. ACP by contrast, does not support used for fixed residential broadband and voice-only service. ACP by contrast, does not support
mobile broadband or voice-only service. However, the FCC currently allows beneficiaries to use mobile broadband or voice-only service. However, the FCC currently allows beneficiaries to use
the benefits together for a single fixed residential broadband plan—something that would not be the benefits together for a single fixed residential broadband plan—something that would not be
possible if Lifeline was limited to supporting mobile service. Other commenters advocated for possible if Lifeline was limited to supporting mobile service. Other commenters advocated for
retaining two low-income programs with different funding mechanisms—one the fee-based USF retaining two low-income programs with different funding mechanisms—one the fee-based USF
programprogram, and the other based on congressional appropriations—as a safeguard against potential and the other based on congressional appropriations—as a safeguard against potential
future lapses in congressional appropriations.future lapses in congressional appropriations.8389
Some Members of Congress have expressed ongoing concern that the FCC has not sufficiently Some Members of Congress have expressed ongoing concern that the FCC has not sufficiently
accounted for how ACP funds have been spentaccounted for how ACP funds have been spent, as well as whether and how to provide additional as well as whether and how to provide additional
funding when the current funds are exhausted (see funding when the current funds are exhausted (see “Senate Hearing, “The State of Universal
Service”,’~~” above~~” above,, for further discussion of this topic).for further discussion of this topic).8490

7884 FCC USF Report. The report recommended that the FCC “initiate a rulemaking to evaluate how the Lifeline program . The report recommended that the FCC “initiate a rulemaking to evaluate how the Lifeline program
can best operate with the Affordable Connectivity Program and examine lessons learned from implementation of the can best operate with the Affordable Connectivity Program and examine lessons learned from implementation of the
EBB Program and the Affordable Connectivity Program that may be able to be applied to Lifeline.” EBB Program and the Affordable Connectivity Program that may be able to be applied to Lifeline.”
7985 FCC USF Report. .
8086 FCC USF Report. To participate in Lifeline, providers must secure an Eligible Telecommunications Carrier . To participate in Lifeline, providers must secure an Eligible Telecommunications Carrier
designation from relevant state regulators, or, in some cases, from the FCC, and meet minimum service and other designation from relevant state regulators, or, in some cases, from the FCC, and meet minimum service and other
requirements. Participation in ACP does not require state regulatory approval, and may be granted automatically in requirements. Participation in ACP does not require state regulatory approval, and may be granted automatically in
some cases if certain basic requirements for service and prevention of waste, fraud, and abuse are met. FCC, some cases if certain basic requirements for service and prevention of waste, fraud, and abuse are met. FCC,
“Affordable Connectivity Program: Provider FCC Approvals,” https://www.fcc.gov/affordable-connectivity-“Affordable Connectivity Program: Provider FCC Approvals,” https://www.fcc.gov/affordable-connectivity-
program#provider-fcc-approvals. program#provider-fcc-approvals.
8187 FCC USF Report. .
8288 For example, see FCC, For example, see FCC, Report on the Future of the Universal Service Fund, Notice of Inquiry, WC Docket 21-476, , Notice of Inquiry, WC Docket 21-476,
December 15, 2021, https://docs.fcc.gov/public/attachments/FCC-21-127A1.pdf (December 15, 2021, https://docs.fcc.gov/public/attachments/FCC-21-127A1.pdf (~~Hereinafter~~hereinafter, , Future of the USF NOI). ).
See AT&T comments recommending combining the programs, See AT&T comments recommending combining the programs, Comments of AT&T In the Matter of Report on the
Future of the Universal Service Fund, p. 33, https://www.fcc.gov/ecfs/document/1021750379067/1; and California , p. 33, https://www.fcc.gov/ecfs/document/1021750379067/1; and California
Public Utility Commission comments recommending separation of program focus by service type, Public Utility Commission comments recommending separation of program focus by service type, Comments of the
California Public Utilities Commission In the Matter of the Future of the Universal Service Fund, p. 10, , p. 10,
https://www.fcc.gov/ecfs/document/10217151028198/1. https://www.fcc.gov/ecfs/document/10217151028198/1.
8389 For example, see California Emerging Technology Fund comments on de-risking low-income support by retaining For example, see California Emerging Technology Fund comments on de-risking low-income support by retaining
Lifeline as a fee-based program, Lifeline as a fee-based program, Comments of the California Emerging Technology Fund In the Matter of Report on
the Future of the Universal Service Fund, p. 18, https://www.fcc.gov/ecfs/document/1021796076649/1. , p. 18, https://www.fcc.gov/ecfs/document/1021796076649/1.
8490 “Latta, Thune Undecided on ACP Future; House Subpanel Eyes Fed Broadband Changes.” “Latta, Thune Undecided on ACP Future; House Subpanel Eyes Fed Broadband Changes.”
Congressional Research Service Congressional Research Service

1415

The Future of the Universal Service Fund and Related Broadband Programs

Schools and Libraries (E-Rate) and Emergency Connectivity Fund
Programs
Assessing the impact of the E-Rate, ECF, and BEAD funding on network construction cannot Assessing the impact of the E-Rate, ECF, and BEAD funding on network construction cannot
occur until the networks are completed. Once such an assessment has been conducted, the FCC occur until the networks are completed. Once such an assessment has been conducted, the FCC
may consider, for example, adding new eligible technology and services, such as those that were may consider, for example, adding new eligible technology and services, such as those that were
made available through the ECF, and giving equal priority to category one and category two made available through the ECF, and giving equal priority to category one and category two
services. services.
Some Members have already suggested mandating a more detailed accounting of how the E-Rate, Some Members have already suggested mandating a more detailed accounting of how the E-Rate,
ECF, and BEAD funding may overlap. NTIA—in response to a GAO recommendation made in ECF, and BEAD funding may overlap. NTIA—in response to a GAO recommendation made in
~~202285~~202291—intends to submit a report to Congress on federal broadband coordination by May 31, —intends to submit a report to Congress on federal broadband coordination by May 31,
2026. The report is intended to “identify barriers and statutory limitations that limit the beneficial 2026. The report is intended to “identify barriers and statutory limitations that limit the beneficial
alignment of broadband programs and offer potential legislative changes.”alignment of broadband programs and offer potential legislative changes.”8692 Congress may Congress may
explore ways to obtain status updates on the agency’s findings prior to 2026. explore ways to obtain status updates on the agency’s findings prior to 2026.
Rural Health Care Program
The FCC may only provide RHC Program support to “eligible entities,” as listed in the The FCC may only provide RHC Program support to “eligible entities,” as listed in the
Communications Act.Communications Act.8793 For example, non-rural health clinics are currently ineligible to receive For example, non-rural health clinics are currently ineligible to receive
support under the HCF Program, even as members of a consortium with eligible providers. support under the HCF Program, even as members of a consortium with eligible providers.
Congress could modify the Communications Act to allow such partnerships. The change could Congress could modify the Communications Act to allow such partnerships. The change could
improve the RHC Program and the quality of telehealth services available in rural areas. improve the RHC Program and the quality of telehealth services available in rural areas.
The FCC could also conduct a reevaluation of the current list of eligible entities and report its The FCC could also conduct a reevaluation of the current list of eligible entities and report its
findings to Congress. findings to Congress.
Universal Service Fund Contributions
Changing how the FCC assesses USF contributions could be one way to reduce the contribution Changing how the FCC assesses USF contributions could be one way to reduce the contribution
rate, while still maintaining the necessary level of funding for the four USF programs. That goal rate, while still maintaining the necessary level of funding for the four USF programs. That goal
could be achieved, for example, through legislation to confirm the FCC’s authority to assess could be achieved, for example, through legislation to confirm the FCC’s authority to assess
contributions based on broadband revenues or to expand the FCC’s authority to assess contributions based on broadband revenues or to expand the FCC’s authority to assess
contributions on the broadest range of revenues, such as digital advertising and certain other contributions on the broadest range of revenues, such as digital advertising and certain other
online services that benefit from broadband networks (e.g., from online services that benefit from broadband networks (e.g., from “edge providersedge providers~~,” entities~~ that that
provide content, applications, or services over the internet, such as Amazon, Facebook, Google, provide content, applications, or services over the internet, such as Amazon, Facebook, Google,
and and Netflix) (e.g., S. 3321~~Netflix~~). Regarding the latter option, without congressional action to provide the FCC with ). Regarding the latter option, without congressional action to provide the FCC with
the authority to assess edge providers, the FCC would need to determine that their services meet the authority to assess edge providers, the FCC would need to determine that their services meet
the statutory definition of “telecommunications” and that the contributions would be in the public the statutory definition of “telecommunications” and that the contributions would be in the public
~~interest.~~
~~Another option for future USF funding would be through direct congressional appropriations.~~
~~This approach is supported, for example, by the U.S. Chamber of Commerce, AT&T, and some~~

85interest. 91 GAO, GAO, Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide (GAO-22-104611), (GAO-22-104611),
May 31, 2022, https://www.gao.gov/assets/gao-22-104611.pdf. May 31, 2022, https://www.gao.gov/assets/gao-22-104611.pdf.
8692 GAO, GAO, Broadband: A National Strategy Needed to Coordinate Fragmented, Overlapping Federal Programs (GAO- (GAO-
23-106818), May 10, 2023, https://www.gao.gov/assets/gao-23-106818.pdf. 23-106818), May 10, 2023, https://www.gao.gov/assets/gao-23-106818.pdf.
8793 42 U.S.C. 254(h)(7)(B)(vi). 42 U.S.C. 254(h)(7)(B)(vi).
Congressional Research Service Congressional Research Service

1516

The Future of the Universal Service Fund and Related Broadband Programs

Another option for future USF funding would be through direct congressional appropriations. This approach is supported, for example, by the U.S. Chamber of Commerce, AT&T, and some industry trade associations.94~~industry trade associations.88~~ Such a decision would provide the broadest possible base for Such a decision would provide the broadest possible base for
94 U.S. Chamber of Commerce, Broadband Breakfast, In FCC Proceeding, Multiple Groups Recommend New General Tax for Universal Service Fund, March 17, 2022, https://broadbandbreakfast.com/2022/03/in-fcc-proceeding-multiple-groups-recommend-new-general-tax-for-universal-service-fund/. Congressional Research Service 17 The Future of the Universal Service Fund and Related Broadband Programs funding USF programs, while reducing burdens on consumers. On the other hand, appropriated funding USF programs, while reducing burdens on consumers. On the other hand, appropriated
funding is in high demand for a wide range of other federal programs and may be limited by funding is in high demand for a wide range of other federal programs and may be limited by
government-wide fiscal constraints. In addition, the appropriations process can be unpredictable, government-wide fiscal constraints. In addition, the appropriations process can be unpredictable,
and USF programs rely on stable support, because telecommunications carriers rely on that and USF programs rely on stable support, because telecommunications carriers rely on that
stability to make long-term investment decisions, and consumers rely on continuous assistance stability to make long-term investment decisions, and consumers rely on continuous assistance
for uninterrupted connectivity. for uninterrupted connectivity.
Yet another option would be to direct revenues collected from one or more spectrum auctions to fund the USF. Auctions often take five or more years to complete and revenues would not be available until the auctions were completed. There have been two recent legal challenges to the FCC’s authority to collect fees from providers. There have been two recent legal challenges to the FCC’s authority to collect fees from providers.
In both cases, the courts ruled in favor of the FCC. Despite the findings of the courts, Congress In both cases, the courts ruled in favor of the FCC. Despite the findings of the courts, Congress
may take action to further clarify FCC authorities to collect fees and establish and implement may take action to further clarify FCC authorities to collect fees and establish and implement
programs under the USAC.programs under the USAC.8995

Author Information

Patricia Moloney FigliolaPatricia Moloney Figliola~~, Coordinator~~
~~Colby Leigh Rachfal~~
Specialist in Internet and Telecommunications Specialist in Internet and Telecommunications
~~Analyst in Telecommunications Policy~~
~~Policy~~

~~Brian E. Humphreys~~

~~Analyst in Science and Technology~~ Policy Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material. copy or otherwise use copyrighted material.

~~88 U.S. Chamber of Commerce, Broadband Breakfast,~~ ~~In FCC Proceeding, Multiple Groups Recommend New General~~
~~Tax for Universal Service Fund, March 17, 2022, https://broadbandbreakfast.com/2022/03/in-fcc-proceeding-multiple-~~
~~groups-recommend-new-general-tax-for-universal-service-fund/.~~
8995 For more detailed information about these cases, see CRS Legal Sidebar LSB10904, For more detailed information about these cases, see CRS Legal Sidebar LSB10904, Fifth Circuit Considers
Constitutionality of the Universal Service Fund, by Chris D. Linebaugh; CRS Legal Sidebar LSB10941, , by Chris D. Linebaugh; CRS Legal Sidebar LSB10941, Congressional
Court Watcher: Recent Appellate Decisions of Interest to Lawmakers (Mar. 20, 2023–Mar. 26, 2023), by Juria L. Jones , by Juria L. Jones
and Christopher T. Zirpoli; and CRS Legal Sidebar LSB10959, and Christopher T. Zirpoli; and CRS Legal Sidebar LSB10959, Congressional Court Watcher: Recent Appellate
Decisions of Interest to Lawmakers (May 1, 2023–May 7, 2023), by Jimmy Balser, Michael D. Contino, and Alexander , by Jimmy Balser, Michael D. Contino, and Alexander
H. Pepper. H. Pepper.
Congressional Research Service Congressional Research Service
R47621 R47621 · VERSION ~~1 · NEW~~
163 · UPDATED 18