The FCC’s recent proposal to impose a total cap on all USF programs is completely incompatible with its long-standing Universal Service principles.
The nationwide Communications Act of 1934 stated that “ALL (emphasis added) people in the United States shall have access to rapid, efficient, nationwide communications service with adequate facilities at reasonable charges.” Thus was born a system of Universal Service Funding for small, rural telephone companies to assist them with the high costs of serving their customers.
In 1996, Congress doubled down and expanded the list of USF recipients in its new Telecommunications Act, adding low income telephony customers, schools, libraries and rural health care providers to its list of entities qualifying for support. That is, these newly added entities should also have access to advanced telecommunications services at reasonable rates, similar to their more urban and wealthy counterparts.
The FCC’s proposal of a hard cap on total USF support for these programs threatens the Congressional mandates set forth in the 1996 Act. An overall cap, even if covering current total costs and anticipated inflation, could work against certain programs, and damage efforts to heal our nation’s “digital divide.” Separate caps for each program could also have negative effects on universal service, as changing conditions might make the predetermined cap inadequate for the designated time period.
No hard cap, be it total or individual program-specific, can reasonably guarantee constant and sufficient support to the individuals, carriers and other entities covered under the provisions of the Telecommunications Act. Such caps seriously jeopardize the universal service goal of extending rapid, advanced and affordable broadband service to every American included in the very important USF programs.
In other words, hard caps can break the law. While valuable for planning and budgetary purposes, they must not be so rigid that they violate the valid nationwide social, economic, and commercial goals of Universal Service Funding Support.
