FCC recommends revamps to Universal Service Fund

After the deadline for comments on how to move forward with the Universal Service Fund (USF), the Federal Communications Commission (FCC) yesterday published its related report. Not surprisingly, the FCC won’t just scrap USF or even pause the program. Its recommendations are much more conservative.

New Street Research policy analyst Blair Levin said the recommendations won’t likely spur any immediate action from Congress. “The politics of adjusting universal service will likely require a bipartisan consensus and that, in turn, would require broad industry support,” said Levin. "In short, rather than push for specific policies, the report lays out a number of issues the Commission should address, most of which have been kicking around the FCC for some time."


In terms of the FCC's report, the agency said it wants to initiate a proceeding to determine the best way to serve the future needs of high-cost areas. And it says given the FCC’s decades of experience with USF, it’s the best agency to plan future funding strategies.

Of course, it will take into consideration the substantial investments in broadband deployment from the Infrastructure Investment & Jobs Act (II&JA). In order to factor-in all the different funding sources, the FCC could develop standard business-case models that account for a provider’s total costs and revenues. 

And it says it is currently taking several steps to identify areas that are unserved and underserved.

Part of this current effort is the FCC’s process to update its coverage maps through a Broadband Serviceable Location Fabric to identify all served locations in the U.S. The FCC is also using a new Broadband Data Collection (BDC) process to ensure the accuracy of its maps.

The Commission has also committed to coordinate its USF high-cost program with II&JA programs. “Preventing duplication is a primary goal of the Commission’s interagency coordination efforts,” it stated in its report.

To pause or not to pause

The FCC says its work to update the USF will run parallel to the efforts of II&JA programs such as the Broadband Equity, Access, and Deployment (BEAD) program. But it is necessary to ensure that networks that rely on USF remain viable for consumers.

The Commission addressed the comments of many stakeholders who suggested the FCC pause the USF program until the monies from II&JA are dispensed. 

The FCC wrote, “Most of the commenters that argue against continuing high-cost funding, however, would not immediately halt programs where funding has already been committed.” The agency added that even those who think the II&JA makes the USF high-cost program obsolete still concede that the program cannot be terminated immediately without causing disruption to service and operations.

RDOF and mobile broadband

The FCC also said it would consider whether future planned processes, such as RDOF Phase II auction, remain necessary.

Finally, the FCC acknowledged that funding under the II&JA focuses on fixed services, not mobile services.

It said it wants to wait until it completes its new mobile broadband deployment maps and then provide additional support for mobile broadband through a competitive process such as the 5G Fund auction.

According to an FCC spokesperson, "Commission staff is hard at work collecting more detailed coverage data that is necessary before any further auctions for support are conducted. After that process is complete, the FCC, in coordination with NTIA and others, will see how best to leverage available funds to meet the shared goal of universal broadband coverage."