Contents

• Introduction
• Overview of the Universal Service Fund
• Overview of Related Non-FCC Programs
• National Telecommunications and Information Administration
• Rural Utilities Service
• High Cost Program
• Enhanced Alternative Connect America Cost Model Program
• Petitions for Reconsideration
• Rural Digital Opportunity Fund
• 5G Fund for Rural America
• Congressional Considerations
for the High Cost Program
• Pivot from Support for Deployment to Support for Operations and Maintenance
• Issues Related to Broadband Deployment on Tribal Lands
• Reevaluating Funding Needs
• Reassessing the Eligibility of Non-Fixed Broadband for High Cost Fund Subsidies
• Use of Defaulted RDOF Funds
• Leave High Cost Fund As Is
• Reassess Needs After Full or Partial BEAD and Related Program Implementation
• Reassess FCC's Use of Reverse Auctions
• Lifeline Programs
• Affordable Connectivity Program
• Congressional Considerations
• Schools and Libraries Program
• Emergency Connectivity Fund
• Congressional Considerations
• Rural Health Care Program
• Healthcare Connect Fund Program
• Telecommunications Program
• Connected Care Pilot Program
• Congressional Considerations
• USF Program Fund Contributions
• Congressional Considerations
• Legislation and Other Activities in the 119^th Congress

Summary

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 established the Federal Communications Commission (FCC). The FCC is an independent federal agency charged with regulating interstate and international communications by radio, television, wire, satellite, and cable.

Since the enactment of the Communications Act, universal service policies and programs have helped make telephone service available nationwide, including in rural areas. The 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 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.

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, reasonable, and affordable rates for all consumers;
• increase nationwide access to advanced 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 towith those charged in urban areas;
• increase access to telecommunications and advanced services in schools, libraries, and rural health care facilities; and
• provide equitable and nondiscriminatory contributions from all providers of telecommunications services to 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 through the USF. Fees on telecommunications carriers, rather than appropriations, fund the USF. Section 254 of the Communications Act, as amended (47 U.S.C. §254)—which was added by the Telecommunications Act of 1996—governs the FCC's USF authority. 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 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 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 Schools and Libraries Program (commonly referred to as the "E-Rate"), and the Rural Health Care Program. The agency says it continually seeks to improve and update USF programs to reflect the changing needs of beneficiaries and advances in technology. Additionally, 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. Proposals include 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 electromagnetic spectrum auction revenues to support the USF, or funding the USF through the appropriations process. Other Members and other interested parties have requested a reexamination of the USF and what some call a "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.

In addition to several pieces of legislation related to the USF or its programs that have been introduced in the 119^th Congress, Senators Fischer and Luján announced the reconstitution of a bipartisan, bicameral USF Working Group in June 2025. That same month, the U.S. Supreme Court upheld the constitutionality of the USF.

Introduction

The goal of universal service is to provide all Americans access to communications services.¹ The concept is the cornerstone of the Communications Act of 1934 (P.L. 73-416)—the law that established the Federal Communications Commission (FCC).² The FCC is an independent federal 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 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 adequate facilities at reasonable charges."³

Enactment of the Communications Act began efforts to make voice telephone service available throughout the United States. Since then, universal service policies and programs have helped to make telephone service available nationwide, including in rural areas. The Telecommunications Act of 1996 (P.L. 104-104) made key amendments to the Communications Act and adopted a set of principles to guide universal service policy:⁴

• promote the availability of quality services at just, reasonable, and affordable rates for all consumers;
• increase nationwide access to advanced telecommunications services (e.g., broadband);
• 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 urban areas;
• increase access to telecommunications and advanced services in schools, libraries, and rural health care facilities; and
• provide equitable and nondiscriminatory contributions from all providers of telecommunications services to fund universal service programs.⁵

To advance the principles of universal service, the FCC uses various permanent, pilot, and temporary programs funded through the Universal Service Fund (USF).⁶ The USF is funded by mandatory fees on telecommunications carriers rather than through congressional appropriations. Section 254 of the Communications Act, as amended (commonly known as "Section 254"; codified at 47 U.S.C. §254), governs the FCC's USF authority, 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 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 percentage of their revenue at a rate set on a quarterly basis, called the "contribution factor."⁷ The 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 country. The USF is administered by the Universal Service Administrative Company (USAC), under the direction of the FCC.⁸

This report provides an overview of the FCC's USF and related programs, summarizes each program and its components, and provides possible congressional considerations. The report concludes with a summary and status of recent activities related to the USF in the 119^th Congress.

Overview of the Universal Service Fund

Section 254 directs the FCC, in consultation with a Federal-State Joint Board on Universal Service, to consider the universal service principles outlined in the Communications Act when formulating USF policies and programs (e.g., affordable rates, rural access, education, public health and safety).⁹ Under the principles, the FCC has established four programs with funding from the USF:

• the High Cost Program helps expand telephone and internet service coverage in underserved areas;
• the Lifeline Program supports affordable telephone and internet services for low-income subscribers;¹⁰
• the Schools and Libraries Program ("E-Rate") provides discounted internet service to schools and libraries; and
• the Rural Health Care (RHC) Program provides discounted telephone and internet services to rural health care providers.

Since 1998, the USF has disbursed about $8 billion in subsidies each year.¹¹ Table 1 contains disbursement data for each of the programs for the years 2022-2024.

The FCC has considered a number of proposals over the years to improve and update these programs to reflect the changing needs of beneficiaries and advances in technology. Additionally, policymakers have discussed options for maintaining the financial viability of the USF, for example, by expanding the types of entities that contribute to the fund.

Overview of Related Non-FCC Programs

In addition to the USF programs regulated by the FCC and administered by the USAC, the National Telecommunications and Information Administration (NTIA), an agency of the Department of Commerce, and the Rural Utilities Service (RUS), an agency of the Department of Agriculture, administer programs intended to promote broadband deployment, accessibility, and use. The focus of this report is the USF, but it references certain other related programs.

National Telecommunications and Information Administration

NTIA administers several federal broadband programs, including the Broadband Equity, Access, and Deployment (BEAD) Program and the Tribal Broadband Connectivity Program (TBCP).¹²

Broadband Equity, Access, and Deployment Program

The TBCP awards grants for broadband deployment and adoption on tribal lands.¹⁴"aims to connect every American to high-speed internet by funding partnerships to build infrastructure."¹³ BEAD grants are aimed at establishing service in unserved and underserved locations, which overlaps with the goals of some USF programs. In June 2025, NTIA made reforms to the program, some of which are currently under congressional inquiry.¹⁴ NTIA is currently in the process of reviewing and approving updated BEAD Program proposals from eligible entities (i.e., states and territories).¹⁵

For additional information about the BEAD Program, see CRS Video WVB00835, Broadband Equity, Access, and Deployment, and CRS Report R48666, The Broadband Equity, Access, and Deployment (BEAD) Program: Issues for the 119th Congress.

Tribal Broadband Connectivity Program

Rural Utilities Service

RUS provides financing for infrastructure improvements to rural communities, including broadband infrastructure. Some RUS programs are similar to the USF program: the Telecommunications Infrastructure Loan Program, the Rural Broadband Program, the Community Connect Grant Program, and the ReConnect Program.¹⁹22 These programs are not generally considered duplicative of USF programs.

High Cost Program

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 Fund (CAF).²⁰24 According to the USAC, the High Cost Program provides support through more than a dozen separate legacy funds that support voice service and modernized funds that support broadband service expansion in rural areas.²¹25 The Enhanced Alternative Connect America Cost Model (Enhanced A-CAM) Program,²²26 the Rural Digital Opportunity Fund (RDOF),²³27 and 5G Fund for Rural America²⁴28 are the most recent initiatives established as part of the CAF under the High Cost Program. Some policymakers and program participants have criticized these three programs for various reasons (see "Congressional Considerations").

Enhanced Alternative Connect America Cost Model Program

The FCC created the voluntary²⁹ Enhanced A-CAM program to " distribute roughly $18.28 billion over 15 years to carriers to deploy broadband service with speeds of at least 100 Megabits per second [Mbps] downstream and 20 [Mbps] upstream (100/20 Mbps) to more than 700,000 locations, and to improve or maintain 100/20 Mbps broadband service at approximately 2 million locations, in 44 states."²⁵ 30 The program began on January 1, 2024, and is to award between $1.27 billion to $1.33 billion annually. Enhanced A-CAM carriers have until December 31, 2028, to complete deployment.²⁶

31 The FCC has used data from the National Broadband Map²⁷32 and the Broadband Funding Map²⁸33 to determine the areas eligible for Enhanced A-CAM support. The National Broadband Map is updated twice a year. For the purposes of the Enhanced A-CAM program, all challenges to broadband availability data in the maps must have been filed by August 1, 2024, to ensure they will be adjudicated by May 15, 2025. The FCC plans to add the approved changes to the final list of eligible locations.

Telecommunications carriers receiving Enhanced A-CAM In total, 368 telecommunications carriers accepted FCC offers to receive Enhanced A-CAM support.³⁴ Carriers receiving support are required to complete broadband deployment to 50% of their committed locations by December 31, 2026; to 75% of those locations by December 31, 2027; and to 100% of those locations by December 31, 2028.²⁹35 The FCC may reconsider in 2027 whether to allow a one-year extension of the December 31, 2028, deployment deadline.

The FCC originally intended for the Enhanced A-CAM Program deadlines to align with the anticipated timeline of the BEAD Program. However, the BEAD Program faced a number of delays that caused the two programs' deadlines to fall out of alignment.

Petitions for Reconsideration

Rural Digital Opportunity Fund

Through competitive reverse auctions—a mechanism that awards funds to the company that commits to deploying service at the lowest cost—the FCC committed up to $20.4 billion to bring fixed broadband service to rural homes and small businesses through the RDOF in two phases.³¹38

The FCC announced the results of the Phase I auction on December 7, 2020. Nearly 200 bidders won $9.2 billion to deploy broadband to over 5.2 million unserved homes and businesses.³²39 Following the Phase I auction, the FCC has continued to review long-form applications and authorize support for winning bidders over thea 10-year period after the auction process is complete.³³ 40 However, $3.3 billion of RDOF awards are in default, and 1.9 million locations (of approximately 5.2 million total) would no longer receive broadband service through this program, according to aggregated data released by the FCC on January 14, 2025 (the most recent totals publicly available).⁴¹.³⁴ The estimated default figures show more than one-third of RDOF investments defaulting, not including potential defaults in the future.

There are a few possible factors that led to the defaults. For example, the reverse auction encouraged companies to propose less-expensive projects, which prevented more-expensive proposals, with with potentially better chances of being fully deployed, from winning. Some companies that defaulted blamed rising construction costs, especially during the COVID-19 pandemic.

The FCC has not started the Phase II auction. Phase II may provide up to $11.2 billion to deploy broadband to partially served areas and unserved areas that did not receive Phase I funding. In a November 10, 2022, letter from then-FCC Chairwoman Jessica Rosenworcel to Senator Roger Wicker, Rosenworcel noted that the FCC

discussed the need for future efforts like RDOF Phase II, in light of anticipated broadband infrastructure work from new programs like the National Telecommunications and Information Administration's Broadband Equity, Access, 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 service or otherwise falling short of the speed and latency standards required.³⁶

If and when Phase II begins, it would present a second opportunity for companies that did not win in Phase I and were denied BEAD funding to bid for RDOF funding.

5G Fund for Rural America

In October 2020, the FCC adopted rules creating the 5G Fund for Rural America.³⁷45 The fund5G Fund is expected to distribute up to $9 billion from the USF over 10 years to bring voice and broadband services to areas that are unlikely to see unsubsidized deployment of 5G networks. Funds are to be awarded to providers, including satellite operators, to serve areas that are not served by an unsubsidized 4G Long Term Evolution (LTE) or 5G broadband service provider. The FCC plans to award support through a competitive reverse auction. Further, the FCC announced it would award support in two phases:

• Phase I to target up to $8 billion of support nationwide to areas lacking unsubsidized 4G LTE or 5G mobile broadband, with $680 million set aside for tribal lands.
• Phase II to provide at least $1 billion to support the deployment of 5G networks that facilitate precision agriculture.

The Broadband Deployment Accuracy and Technological Availability Act (P.L. 116-130;), enacted in 2020), requires the FCC to use data collected for the National Broadband Map to determine areas eligible for the 5G Fund. Among other requirements, the law directs the FCC to collect and display (on a map) specific location-level information about broadband services available throughout the country and implement a public challenge process. The FCC released the initial National Broadband Map showing U.S. mobile coverage in August 2021.³⁸46 In November 2024, the FCC released the fifth iteration of its National Broadband Map.³⁹47 Additional iterations of the map arewere expected later in 2025late in 2025, but no update has been released as of the publication date of this report.

The FCC adopted its most recent rules on the 5G Fund on August 14, 2024. In its order, the FCC

• defined areas that will be eligible for 5G Fund support;
• increased the budget for the 5G Fund;
• modified how bids are accepted and awarded;
• explained how areas eligible for 5G Fund support will be defined;
• modified the schedule for transitioning from mobile legacy high-cost support to 5G Fund support;
• required 5G Fund support recipients to implement cybersecurity and supply chain risk management plans; and
• encouraged 5G Fund support recipients to incorporate Open Radio Access Network technologies in networks funded through the 5G Fund.

The FCC has not yet set a start date for either the Phase I or Phase II auctions.

Congressional Considerations

As the FCC considers reorientingof the 5G Fund auctions. As with the RDOF, some policymakers, including FCC Chairman Brendan Carr, advocate waiting to launch the auctions until the impact of the BEAD Program on rural broadband deployment can be assessed.⁴⁸ Further, a number of rural service providers have petitioned the FCC to delay advancing the 5G Fund because they believe the process used to confirm carrier eligibility is flawed and needs to be reexamined.⁴⁹ Congressional Considerations for the High Cost Program As the FCC continues to refocus the High Cost Program toward broadband deployment, Congress may take an interest in monitoring these efforts and assessing whether legislative action might be necessary to provide additional congressional direction to the agency. Congress might consider several options for the High Cost Fund, discussed below.

Pivot from Support for Deployment to Support for Operations and Maintenance

While numerous programs provide funding for deployment of broadband infrastructure, one option for reorientation of the High Cost Fund could be a pivot from providing support for deployment costs to support for operation and maintenance costs to sustain existing networks. This concept is supported, for example, by NTCA—The Rural Broadband Association,⁴⁰50 as well as a number of other interest groups representing various broadband constituencies.⁴¹51 Other interest groups urged postponing any programmatic changes until the FCC had assessed the impact of IIJA funding, such as the BEAD Program, on broadband deployment.⁴²52 Congress could consider requiring the FCC to conduct such an assessment.

Issues Related to Broadband Deployment on Tribal Lands

Many tribal lands lack the infrastructure for broadband 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 eligible—the FCC did not provide a tribal entity priority in the RDOF application or bidding process.⁴³53 Tribal entities are also eligible for other federal broadband programs, but only NTIA's TBCP is established specifically for tribal entities.⁴⁴

As it appears that demand for federal support for tribal broadband deployment is high,54 Considering the ongoing gap in broadband accessibility between people living on tribal lands and the United States more broadly,⁵⁵ Congress could weigh whether to refocusreallocate parts of the High Cost Fund onto tribal areaslands or create aan RDOF tribal entity priority for the program during the application process, the bidding process, or both. InFor example, in 2020, the FCC implemented a tribal priority window as part of the 5G Fund for Rural America, which provided an opportunity for tribes to directly access specified spectrum in the 2.5 GHz band over their lands.⁴⁵56 A similar priority for other broadband deployment funding on tribal lands could complement tribal spectrum efforts and help tribes meet build-out requirements of future complementary programs.

Reevaluating Funding Needs

The information in the latestGiven the updated National Broadband Map may allow the FCC to betterand that the NTIA continues to approve final BEAD Program proposals,⁵⁷ the FCC could evaluate future funding needs offor high-cost areas, including whether future planned processesexpenditures, such as the RDOF Phase II Auction and a 5G Fund Auction, remain necessary. As there may behas been continued focus in the 119^th Congress on program redundancy and potential duplication of funding,⁴⁶58 Congress could consider whether to eliminate the High Cost Program and instead make permanent newer broadband deployment programs, to be funded through annual appropriations (e.g., the BEAD Program).

Elimination of the High Cost Program could provide benefits to some consumers, such as lowering monthly charges for telecommunications subscribers⁴⁷ and reducing the potential for overlap with other broadband deployment programs (thus eliminating program redundancy and increasing efficiency).⁴⁸ Further, some states, such as Texas and Pennsylvania, have their own state-specific USFs, in which funds are used for universal service efforts at the state and local level.⁴⁹ These state USF funds could be duplicative of federal USF efforts. States without a state-level USF program, however, may rely exclusively on the federal USF.

Reassessing the Eligibility of Non-Fixed Broadband for High Cost Fund Subsidies

Since much of the funding that Congress has provided is intended for deploying fixed broadband infrastructure, the FCC could proceed with providing additional support for mobile broadband deployment (e.g., potentially through the 5G Fund for Rural America). However, the—the most expensive of the USF programs⁵⁹—could provide the benefit of lower monthly bills to some telecommunications subscribers by eliminating the need to collect revenues for it. Reassessing the Eligibility of Non-Fixed Broadband for High Cost Fund Subsidies Historically, the USF has supported the deployment of fixed⁶⁰ broadband infrastructure. Other programs, including the BEAD Program, were originally intended to support fixed broadband, too, but that has been changing, most recently with NTIA allowing satellite providers to apply for BEAD Program funding.⁶¹ The FCC could follow suit and provide support for satellite or non-fixed⁶² broadband deployment (e.g., the 5G Fund for Rural America). The FCC acknowledged that an evaluation of the impact of the BEAD and other broadband programs on future mobile deployments may be necessary before changing course.⁵⁰ The latest iteration of the National Broadband Map may allow both the FCC and Congress to better visualize how 63 Congress may wish to study (or direct the FCC to study) how existing federal investments are closing the digital divide and which of these programs may be the most effective.⁵¹ Further, with many federal broadband programs targeted to the deployment of fixed broadband, another64 Another consideration for Congress may be whether to transition the High Cost Fund to focus entirely (or mostly) on mobile broadband deployment.

Use of Defaulted RDOF Funds

According to one estimate, "internet service providers (ISPs) have defaulted on $3.3 billion of the $9.2 billion total in RDOF awards. ... Meaning 1.9 million of approximately 5.2 million eligible RDOF locations are no longer scheduled to receive service."⁵² Some stakeholders and policymakers have deemed the RDOF Phase I auction unsuccessful because of the fund's high default rate,⁶⁵ caused by issues such as the FCC's lack of sufficient vetting of bidders before the auction.⁵³66 This may have played a role in the shift of recent broadband efforts (e.g., broadband funding in the American Rescue Plan Act of 2021 [ARPA; P.L. 117-2] and the IIJA) from the FCC to other agencies, such as NTIA and the Department of the Treasury. Congress could, for example, conduct oversight to examine 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 diverted to other purposes, such as the options described above.

Leave High Cost Fund As Is

Congress could also choose to leave the High Cost Fund in place within its current framework. Such a path forward could provide ongoing stability for the program but could also insert uncertainty in that it would not address the continuing issues related to the contribution factor or contribution base (see "USF Program Fund Contributions" below).

Reassess Needs After Full or Partial BEAD and Related Program Implementation

Congress may consider waiting until BEAD-funded projects have begun or been completed. If warranted, Congress might then direct the FCC to reallocate defaulted RDOF or remaining 5G Fund Phase II funds to areas that did not benefit from BEAD-funded projects.

Reassess FCC's Use of Reverse Auctions

Given the number of winning bidders that have defaulted on their RDOF projects, Congress may consider directing the FCC to reconsider its use of reverse auctions in the future. Reverse auctions have been blamed for encouraging bidders to overpromiseunderestimate their costs in their bids, leading to defaults. Additionally, Congress may consider requiring the FCC to award a runner-up that would be eligible for picking up the defaulted award. As noted previously, in the case of RDOF defaults, assigning only one winner has led to some areas not being eligible for any federal broadband funding, as the deadline for BEAD proposals has passed.

Lifeline Programs

Through the Lifeline Program, the FCC provides subsidies to broadband service providers to cover monthly subscription discounts for qualified consumers or households. Eligibility is limited to one beneficiary per household. Low-income broadband subscribers may qualify for assistance through this program if they earn below 135% of the federal poverty level or meet certain other qualifying criteria, such as enrollment in federal nutrition or housing assistance programs. The Lifeline Program subsidizes beneficiaries via reimbursements to participating providers to cover monthly subscription charges—up to $9.25 per month in most cases and up to $34.25 for those living on tribal lands. In many cases, beneficiaries pay nothing out-of-pocket. In other cases, Lifeline providers may apply the reimbursement to lower the subscriber cost of eligible plans that exceed the subsidy amount. Lifeline does not cover costs for mobile phones or connected computing devices, but some providers might include free or discounted smartphones as a marketing incentive with their mobile broadband plans. Annual spending of the Lifeline Program varies depending on program enrollments. Enrollment rates vary widely from state to state; nationally, 19% of eligible households—approximately 7.4 million subscribers—benefit from the Lifeline Program.⁵⁴

Affordable Connectivity Program

During the COVID-19 public health emergency, Congress created the Emergency Broadband Benefit (EBB) Program as a temporary program under the Consolidated Appropriations Act, 2021 (P.L. 116-260).⁵⁵ Congress appropriated $3.2 billion for the program, which helped low-income households pay for broadband service and internet-connected devices. The EBB supported the goals of the USF but was not funded by USF contributions. Funding for the EBB was available until expended or six months after the Secretary of Health and Human Services declared that the COVID-19 public health emergency had ended. The FCC engaged the USAC to implement the EBB Program.

Congress converted the EBB to a program called the Affordable Connectivity Program (ACP) in Title V of the IIJA and appropriated $14.2 billion to remain available until expended; once expended, the program would end. As written in statute, theAffordable Connectivity Program (ACP) in Title V of the IIJA and appropriated $14.2 billion to remain available until expended; pursuant to the law, once expended, the program would end. The ACP⁶⁸ ran out of funds as of June 1, 2024.⁶⁹ The ACP was the follow-on program to the Emergency Broadband Benefit (EBB) Program, a temporary program created by Congress in the Consolidated Appropriations Act, 2021 (P.L. 116-260),⁷⁰ during the COVID-19 public health emergency.⁷¹ The ACP differed from the Lifeline Program in its funding structure, benefits levels, and provider and beneficiary eligibility requirements.⁵⁶ 72 The ACP offered broader and more generous eligibility provisions and higher monthly subsidies to cover the charge of residential broadband service—up to $30 per month in most cases and up to $75 per month on tribal lands. In addition, the ACP provided one-time discounts of up to $100 for connected laptops, desktop computers, or tablets purchased by subscribers from participating broadband providers. It also expanded eligibility criteria for participating providers and imposed public outreach and consumer protection requirements. Finally, the ACP awarded grants to entities in nonprofit and government sectors to expand program outreach to historically underrepresented communities.⁵⁷

The ACP⁵⁸ ran out of funds as of June 1, 2024.⁵⁹ Three bills and one resolution were introduced in the 118^th Congress that would have appropriated additional funds for the program (Table 2).

Congressional Considerations

In its report on the future of the USF,⁶⁰74 the FCC suggested that it might consider expanding Lifeline consumer eligibility requirements to align with the less restrictive ACP requirements. It also recommended deferring consideration of relaxing Lifeline provider eligibility requirements to align with those of the ACP, pending further evaluation.⁶¹75 Beyond the recommendations in the FCC's report, options for Congress could include requiring FCC action to "facilitate and fund" Lifeline consumer outreach programs similarsimilarly to those established for the ACP and establish consumer protection provisions for Lifeline based on those established for the ACP.⁶²76

The recommendations made in the FCC report, if adopted, might affect stakeholders in different ways depending on how they are implemented. Some commenters recommended that the FCC fold the ACP features into Lifeline, or vice versa, while others recommended refocusing each program on a specific type of service.⁶³77 Other commenters advocated for retaining both of these low-income programs with different funding mechanisms—one (i.e., Lifeline) funded by the fee-based USF and the other (i.e., ACP) funded by congressional appropriations—as a safeguard against potential future lapses in congressional appropriations.⁶⁴78

Members of Congress could choose to reintroduce bills similar to those in the 118^th Congress if they want to reactivate the ACP.

reactivate the ACP by appropriating additional funds to the program. Thus far, no legislation has been introduced in the 119^th Congress that would address the otherLifeline considerations discussed above.

Schools and Libraries Program

The Schools and Libraries Program, commonly called "E-Rate," provides needs-based discounts to eligible schools and libraries for telecommunications service, broadband service, and internet access, as well as internal connections (i.e., the equipment to deliver these services) and other related services.⁶⁵79 Eligible schools and libraries⁶⁶80 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.⁶⁷81 Provision of category one services is prioritized over provision of category two services.⁶⁸ In 2024, 148,691 schools and libraries received E-Rate funding.⁶⁹ Pre-discount funding caps for schools and libraries are $15 per month for recurring wireless internet service and $90 per Wi-Fi hot spot device.

In recent years, the FCC refocused the program on providing broadband services, including expanding Wi-Fi access, including on school buses.⁷⁰ Discounts82 E-Rate discounts range from 20% to 90% on services purchased based on the poverty 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 on the basis of greatest need, as determined by poverty level. The E-Rate funding cap for funding year 2024 (July 1, 2024, through June 30, 2025) is $4.94 billion.⁷¹ On March 7, 2025, the FCC announced that the program In 2024, 148,691 schools and libraries received E-Rate funding.⁸³ Pre-discount funding caps for schools and libraries are $15 per month for recurring wireless internet service and $90 per Wi-Fi hot spot device. In recent years, the FCC refocused the program on providing broadband services, including expanding Wi-Fi access, including on school buses.⁸⁴ The E-Rate funding cap for funding year 2025 (July 1, 2025, through June 30, 2026) will be $5.06 billion, a 2.4% inflation-adjusted increase from the previous year's cap.⁷²

Emergency Connectivity Fund

During the COVID-19 pandemic, Congress established the $7.171 billion Emergency Connectivity Fund (ECF) through ARPA (P.L. 117-2). The ECF allowed schools and libraries to purchase eligible equipment and services for students, school staff, and library patrons.⁷³86 For example, ECF had wider coverage than E-Rate for wireless services delivered to a range of end-user devices, such as laptops and tablets.⁷⁴87 Congress intended the funding as an emergency supplement to the E-Rate Program to purchase services and hardware not eligible for E-Rate funding.

As of November 1, 2023, the programyear before the program ended, the ECF supported approximately 18 million students, 11,500 schools, 1,070 libraries, and 128 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.⁷⁵

The Further Consolidated Appropriations Act, 2024 (P.L. 118-47), rescinded funds from the ECF. Specifically, Congress provided in Section 639 that "the unobligated balances of amounts made available under section 7402(c)(2)(A) of the American Rescue Plan Act of 2021 (Public Law 117–2), $1,768,000,000 are hereby rescinded not later than September 30, 2024."

Congressional Considerations

As with the Lifeline Program and the ACP, assessing the collective impact of ECF and BEAD funding on network construction and broadband adoptionfunding on broadband adoption and use may prove difficult until construction is fully completed and services are available. Once such an assessment has been conducted, the FCC may consider, for example, expanding the list of technology and services eligible for E-Rate, such as those that were made available through the ECF, and giving equal priority to category one and category two services.

NTIA—in response to a Government Accountability Office (GAO) recommendation made in 2022⁷⁶89—intends to submit a report to Congress on federal broadband coordination by May 31, 2026.⁷⁷90 The report is intended to "identify barriers and statutory limitations that limit the beneficial alignment of broadband programs and offer potential legislative changes."⁷⁸91 Congress may wish to examine whether E-Rate and BEAD could be funding redundant infrastructure in schools (schools may be designated as BEAD "Community Anchor Institutions" and may therefore be eligible for funding through both programs) and explore ways to obtain status updates on the agency's findings prior to 2026.

Rural Health Care Program

The Rural Health Care (RHC) Program allows rural health care providers to pay rates for internet and telecommunications services similar to those paid by their urban counterparts, making telehealth services more affordable in rural areas.⁷⁹92 The COVID-19 pandemic brought increased attention to the need for reliable high-speed internet services for health care providers and their patients. The pandemic also accelerated the adoption of telehealth services, which some observers perceived as increasingly critical in providing health care in rural areas of the country.⁸⁰93 The RHC has two permanentongoing programs—the Healthcare Connect Fund (HCF) Program and the Telecommunications Program—and a three-year program—the Connected Care Pilot Program.⁸¹94

In 2024, 13,164 health care providers received funding commitments through the RHC Program. The RHC Program funding cap for funding year 2024 (July 1, 2024, through June 30, 2025) is $706.93 million. On March 7, 2025, the FCC announced that the RHC Program funding cap for funding year 2025 (July 1, 2025, through June 30, 2026) will be $723.89 million, a 2.4% inflation-adjusted increase from the previous year's cap.⁸² The cap for the HCF Program is $182.78 million.⁸³

Healthcare Connect Fund Program

The FCC established the HCF Program in 2012.⁸⁴96 The HCF Program supports broadband connectivity to eligible health care providers, and applicants are encouraged to establish consortia. A consortium is a group of two or more health care providers that request support through a single application. Each consortium has one leader, who files the required forms on behalf of everyone in the group. Non-rural eligible health care providers may participate as part of a consortium consisting of a majority of rural health care provider sites. Both rural and non-rural sites are eligible for funding as part of a consortium as long as a majority (i.e., more than 50%) of the consortium members are rural sites.

Under the HCF Program, eligible rural health care providers receive 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.⁸⁵97 In addition, ineligible health care provider sites may participate in a consortium and take advantage of lower contract prices often associated with consortia bulk buying, but they will not receive universal service support.

Telecommunications Program

The FCC established the Telecommunications Program in 1997.⁸⁶98 The program subsidizes the difference between urban and rural rates within a state for telecommunications and voice services to facilitate the use of telemedicine and telehealth.⁸⁷99 This program provides nonprofit or public health care providers in rural areas with access to telecommunications services at rates reasonably comparable to rates charged in urban areas of a state.

Connected Care Pilot Program

Through the Connected Care Pilot Program, the FCC made up to $100 million available for selected pilot projects to defray the cost of providing connected care services for eligible entities.⁸⁸100 The goal of the program was to support the delivery of connected care to patients, with a focus on low-income and veteran patients, as well as to generate data about whether and how USF support could be used to enable adoption of connected care services.⁸⁹101 Although the goals of the program supported the COVID-19 response, the FCC conceived this program prior to the pandemic.

The FCC selected projects from eligible nonprofit or public health care provider applicants and funded coverage of 85% of eligible costs for broadband connectivity, network equipment, and information services. The program application window closed on December 7, 2020,⁹⁰102 with recipients announced in early 2021. In October 2024, the FCC established a uniform completion deadline of December 31, 2025, for all projects funded by the Connected Care Pilot Program and waived the previous completion deadline of three years from each project's start date.⁹¹103

Congressional Considerations

Congress could direct the FCC to reevaluate the current list of eligible entities and report its findings to Congress. At this time, the FCC may provide HCF Program support only to "eligible entities," as listed in the Communications Act. Congress could direct the FCC to reevaluate the current list of eligible entities and report its findings to Congress.¹⁰⁴.⁹² "Non-eligible" consortia members in rural areas are currently ineligible to receive HCF funding; they only receive any lower rates secured through their consortium. Other options for Congress could also considerinclude directing the FCC to allow some non-eligible consortia members to receive funding on a case-by-case basis if such funding could be shown to benefit the community, and providing new funding for a second round of Connected Care Pilot Program grants.

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 contribute a percentage of its interstate and international telecommunications revenues to the USF (called the "contribution factor").⁹³105 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 advancement of universal service if the public interest so requires."⁹⁴106 Contributions are determined quarterly, calculated based on the ratio of total projected quarterly costs of the USF programs to contributors' projected interstate and international telecommunications revenue. Providers may pass through the USF contribution cost to end users.⁹⁵

The107 Broadband service is not a telecommunications service. While the amount households pay for the "pass through" has been relatively stablenot changed much in recent years, but the contribution factor has increased significantly—from 17.416.7% of revenues in the second quarter of 2015⁹⁶108 to 36.638.1% in the secondfourth quarter of 2025.⁹⁷109 These increases are in large part due to a decline in the contributions revenue base; that is, providers are reporting a declining share of telecommunications revenues and an increasing share of non-telecommunications revenues (e.g., broadband, equipment rentals, video services).¹¹⁰.⁹⁸ USF demand and disbursements, however, have remained relatively stable over the past decade—in 2014, USF disbursements were $7.82 billion;⁹⁹111 in 2024, disbursements were $8.59 billion.¹⁰⁰112 These figures indicate that the declining contribution base may be the primary driver of the increased contribution factor, rather than increased demand from consumers.

In July 2024, the U.S. Court of Appeals for the Fifth Circuit ruled that the process for funding the USF was unconstitutional.¹⁰¹113 That decision conflicted with decisions by the U.S. Courts of Appeals for the Sixth, Eleventh, and D.C. Circuits, each of which rejected similar claims.¹⁰²114 On June 27, 2025, the U.S. Supreme Court issued a ruling in the case, now called FCC v. Consumers' Research, upholding the constitutionality of the USF.¹⁰³

Congressional Considerations

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 could be achieved, for example, through legislation to confirm the FCC's authority to assess contributions based on broadband revenues or to expand—which it currently cannot do under Title II of the Communications Act. Congress could also expand through legislation the FCC's authority to assess contributions on the broadest range of revenues, such as digital advertising and certain other online services that benefit from broadband networks (e.g., from edge providers that provide content, applications, or services over the internet, such as Amazon, Facebook, Google, and Netflix). Regarding the latter option, without congressional action to provide the FCC with the authority to assess fees on 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 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 industry trade associations.¹⁰⁴117 Such a decision would provide the broadest possible base for funding USF programs (i.e., all U.S. taxpayers), 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 government-wide fiscal constraints. The appropriations process can be unpredictable, 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 for uninterrupted connectivity.

Congress could also direct revenues collected from one or more radio spectrum auctions to fund the USF. A typical spectrum auction may take five or more years to complete, and revenues would not be available until the auction was completed.¹⁰⁵ The FCC's general spectrum auction authority expired on March 9, 2023, and the agency cannot conduct any spectrum-related activity until it is renewed.

On June 27, 2025, the Supreme Court ruled in FCC v. Consumers' Research that the FCC's delegation of managing the USF to the USAC is constitutional.¹⁰⁶ In light of this decision, Congress still may 118 In light of the FCC v. Consumers' Research decision,¹¹⁹ Congress retains the authority to consider legislation that would make changes to USF programs or otherwise clarify the FCC's authority to collect fees from providers and implement programs under the USAC.¹⁰⁷ However, in the short term, Congress may have less incentive to make significant changes to the fund and its programs.

Legislation and Other Activities in the 119^th Congress

Table 32 describes legislation under consideration in the 119^th Congress that would affect the USF or its individual programs. For example, legislation has been introduced that would

• direct the FCC to conduct a rulemaking to expand the USF contribution base to include, generally, large broadband providers (i.e., internet access) and edge providers (e.g., online shopping, social media, messaging companies);
• limit children's access to social media platforms and require both platforms and schools to implement certain restrictions on children's social media usage;
• nullify an FCC rule that permits schools and libraries participating in the E-Rate Program to purchase discounted Wi-Fi hot spots and associated mobile connectivity service for off-premises use by students, school staff, and library patrons; and
• require the FCC to develop a vetting process for applicants seeking funding under high-cost USF programs.

Footnotes