In the August 13, 2025, edition of the ICORE Blog we reported that the bipartisan, bicameral Congressional Universal Service Working Group had been reconstituted and was seeking comments from the telecommunications industry regarding a wide range of issues related to the FCC’s Universal Service Fund (USF). In a June 12, 2025 announcement the Working Group expressed the continuing commitment by Congress to close the digital divide and ensure the continued viability of the USF. The announcement included a specific series of questions seeking input regarding the effectiveness of the USF programs as well as comments relative to transparency and accountability, waste and fraud, coordination with other federal programs, USAC accountability, and the FCC’s existing authority to make suggested reforms. Comments from interested stakeholders were filed on September 15, 2025.
Numerous interested parties responded to the Working Group’s request for comments on the wide range of topics listed above. A review of the comments filed indicates that in particular, there is significant agreement regarding the ineffectiveness and sustainability of the existing USF funding mechanism. Currently contributions are derived through an assessment of long distance and international revenues billed by telephone companies to users of these services. These revenue streams have declined precipitously over time requiring significant increases to the contribution factor which is proposed to be 38.1% for the fourth quarter of 2025. Various commenters urge Congress to enact legislation authorizing and directing the FCC to reform the contribution methodology to include revenues from edge providers which include providers of online content or services such as a search engine, social media platform, streaming services, or an e-commerce platform. Commenters maintain that this approach would more equitably spread the cost of universal service to all entities that benefit from the network and would greatly reduce the USF charge on customers’ bills while ensuring the sustainability of the USF.
The FCC has previously addressed the issue of expanding the USF contributions base in past reports to Congress regarding the Future of the Universal Service Fund (see ICORE Blog dated 3/10/23). In these reports to Congress the FCC concluded that there is significant ambiguity in the record regarding its authority to expand the contributions base to include edge providers and encouraged Congress to provide the FCC with the requisite authority. In addition, in recent years legislation has been introduced in Congress (see ICORE Blogs dated 3/24/23, 4/14/23, and 11/22/23) that would provide the FCC with the authority to expand the contributions base to include edge providers, however, the proposed legislation has not been enacted. Perhaps the comments filed with the Congressional Universal Service Working Group will result in new legislation addressing the need to expand the USF contribution base. Given the ongoing federal government shutdown, the comments filed on September 15, 2025, have likely not yet received any meaningful attention from the Working Group. Hopefully the government shutdown will be resolved in the near future and the issues related to the USF contribution methodology will be finally addressed.
