AT&T wants “large technology companies, edge service providers and others that directly benefit from the nation’s universal service goals” to contribute to Universal Service Fund (USF) subsidies. Doing so will ensure that USF objectives are met, said AT&T Executive Vice President Regulatory Affairs Rhonda Johnson in a blog post.
The USF is comprised of four programs, including the high-cost program, the schools and libraries program, the rural healthcare program and the Lifeline low-income program.
As Johnson noted, and as Telecompetitor has previously noted, the current method of funding these programs was developed years ago when funding primarily went toward voice networks and services.
“As a result, voice service revenues were – and continue to be – the primary means by which USF’s programs are funded,” Johnson wrote.
Providers are required to allocate a portion of those revenues to the USF program, and that approach has become increasingly unsustainable as voice revenues decline and more and more USF funding goes toward broadband.
The percentage of telecom revenues that goes toward USF has increased from less than 6% in 2000 to 30% today, according to Johnson.
Some people have suggested that broadband revenues should be included in the contribution base, considering that the USF is now largely focused on broadband. But Johnson says that would be short-sighted because she believes broadband contributions alone would not generate enough revenue to sustain the program into the future and would increase broadband costs for consumers.
Instead, her recommendation is to require tech companies to pay into the USF fund. Although she doesn’t mention any companies by name, she undoubtedly is talking about companies such as Meta, Amazon, Netflix, Apple and Google that are responsible for a large volume of broadband traffic.
As Johnson notes in her blog post, the FCC can’t make this change unless Congress first gives the commission the authority to expand the base of contributors to include the tech companies.
It’s worth noting that those who favor adding broadband revenues to the contribution base have argued that doing so would have little or no impact on broadband prices.
It’s also worth noting that AT&T isn’t the first to recommend that tech companies pay into the USF fund. FCC Commissioner Brendan Carr also has made that suggestion.
One thing I haven’t seen from any of those making this recommendation, however, is a description of where we would draw the line on who must contribute and who would be exempt. It’s not enough just to say big companies should pay; you also need to define what you mean by “big company.”