Expanding USF

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As mentioned in the ICORE Blog entry dated 3/24/23, on 3/16/23 bipartisan legislation was introduced in the U.S. Senate aimed strengthening the USF by expanding the contributions base. This legislation is titled the Funding Affordable Internet and Reliable (FAIR) Contributions Act. The FAIR Act directs the FCC to conduct a study and report to Congress regarding the feasibility of collecting contributions from edge providers who are defined as providers of online content or services such as a search engine, a social media platform, streaming services , or an e-commerce platform to name a few. The FAIR Act requires the FCC to issue a Notice of Inquiry on the issue and to issue a final report within 180 days.

Last week similar bipartisan legislation was introduced in both the U.S. Senate and the House of Representatives. The Reforming Broadband Connectivity Act was introduced in the Senate by Senators Amy Klobuchar (D-Minn.), John Thune (R-S.D.), John Hickenlooper (D-Colo.) and Jerry Moran (R-Kan.). In the House of Representatives the bill is sponsored by Joe Neguse (D-Colo.), Hal Rogers (R-Ky.), Lizzie Fletcher (D-Texas), Glenn Grothman (R-Wis.), Angie Craig (D-Minn.), and Mike Gallagher (R-Wis.). The legislation requires the FCC to conduct a study of the existing USF funding process and to issue a report to Congress. Further the legislation requires that the FCC complete a rulemaking within one year that modernizes the USF contributions system and expands the contribution base. The introduction of this legislation was endorsed by NTCA (The Rural Broadband Association), WTA (Advocates for Rural Broadband), and US Telecom.

The USF contribution process has been the subject of considerable discussion at the FCC in recent weeks and months. Interested parties have expressed concern regarding the declining contributions base as well as the resulting increases to the contribution factor. Frequently these concerns have been expressed in regard to the issue of Enhanced ACAM and CAF-BLS. The FCC in its Report to Congress on the Future of the Universal Service Fund stated its belief that its existing authority does not provide for the ability to expand the contributions base and recommended that Congress provide that additional authority. The introduction of the FAIR Act and now the Reforming Broadband Connectivity Act indicates the Congress is intent on addressing this issue. As stated here previously, Congressional action could be a time consuming process. In the interim it is our belief that the FCC needs to quickly address the existing ACAM and CAF-BLS processes as recommended by The Broadband Coalition and NTCA. The existing ACAM and CAF-BLS programs have become antiquated and significant benefits will accrue to rural subscribers through the implementation of the recommended changes to these programs.

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