A group of three U.S. Senators has introduced the Funding Affordable Internet with Reliable (FAIR) Contributions Act. The FAIR Act would direct the FCC to study expanding the base of contributors to the USF fund.
It’s not a new idea and it has been debated considerably for many years. Currently, the Universal Service Fund (USF) gets its funding largely from interstate voice revenue captured by telecom carriers. That revenue category has been in decline for years, and many would argue, is an unsustainable revenue source for USF.
The idea of expanding the contribution base has gotten more attention recently, due in part to FCC Commissioner Brendan Carr calling for it.
The largest portion of the USF was originally used to subsidize bringing voice service to high-cost rural areas, so rural consumers could get comparable telecom services to their urban counterparts at affordable costs. But in addition to voice service, USF increasingly now subsidizes that same mission for broadband, yet the voice-only revenue contribution base remains.
U.S. Sens. Roger Wicker, R-Miss., ranking member of the Senate Committee on Commerce, Science, and Transportation, Shelley Moore Capito, R-W.V., and Todd Young, R-Ind are the sponsors of the FAIR Act, which, if passed, could begin the process of redefining the contribution pool for USF. That contribution pool could be expanded to include so-called edge companies, like Netflix, Google, and others, often grouped together as “big tech.”
“More consumers are moving to internet-based services,” said Wicker in a press release. “This raises concerns about the sustainability of fees collected from consumers’ telephone bills, which support broadband deployment in underserved areas. As online platforms continue to dominate the internet landscape, we should consider the feasibility of Big Tech contributing to the USF to ensure rural areas are not left behind as we work to close the digital divide.”
Specifically the FAIR Act would:
- Direct the FCC to issue a Notice of Inquiry seeking public comment on the feasibility of collecting USF contributions from internet edge providers, and issue a final report on the matter within 180 days.
- Require the FCC to consider:
- Possible sources of Big Tech revenue, such as digital advertising and user fees;
- The fairness of the current system and a system under which contributions could be assessed on Big Tech firms;
- The feasibility of assessing contributions on such a broad category of firms that do not currently register with the FCC;
- The effects such a change would have on Tribal, low-income, and elderly consumers; and
- The changes to current law necessary to implement this system.
- Direct the FCC to issue a Notice of Inquiry seeking public comment on the feasibility of collecting USF contributions from internet edge providers, and issue a final report on the matter within 180 days.
This is just the beginning of the process. Legislation would have to be passed by both chambers of Congress and signed by the President before becoming law.
