Reworking the Universal Service Fund

Changing the Universal Service Fund (USF) is right at the top of the list of National Broadband Policy Broadband Action Plan. In their own words, they plan to “Carry out a once-in-a-generation transformation of the Universal Service Fund over the next ten years to support broadband service. This will be achieved by converting existing subsidy mechanisms over time from “POTS” (plain old telephone service) to broadband, without increasing the size of the fund over the current baseline projection.”

That’s a tall order. Now some of what they plan to do is expand upon already successful programs, such as the E-Rate program and Rural Health Care Program. Those programs have worked well in the past. I think the most interesting changes will come with the new Connect America Fund created to “extend broadband service to unserved areas of the nation and to ensure affordable broadband service in high-cost areas where support is necessary”.

Last week the FCC kicked off their Universal Service Reforms by inviting “public comment on the use of an economic model to precisely target support for areas where there is no private-sector business case for carriers to provide broadband and voice services”. They also want to hear ideas on “how to quickly provide consumers in unserved areas with broadband access while the Commission is considering final rules to implement fully the new CAF funding mechanism”.

TeleCompetitor recently ran an interesting article that outlines industry chatter about the changes. I think they sum up the highlights…

In effect, the competitive landscape will broaden beyond the traditional marketplace, to include a new regulatory/policy marketplace, where broadband carriers of all types compete for USF. The national broadband plan advocates for this process to be complete by 2020. The battle lines are already forming.

I think we’re starting to industry posture for the battle with recent announcements of mergers and purchases. Any change is expected (according to the Action Plan) to transition over 10 years. And when the transition will actually start has yet to be decided. The FCC seems to be making this a top priority, but some folks, such as Rep. Bart Stupak predict that “lawmakers would not follow through on their plans this year to create a fund that would expand broadband access nationwide”.

So we watch, and hopefully respond to the request for ideas, if you have any.

This entry was posted in FCC, Policy, Rural by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (, hosts a radio show on MN music (, supports people experiencing homelessness in Minnesota ( and helps with social justice issues through Women’s March MN.

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