Universal Service Fund Reform

Summary: The century-old concept of "Universal Service" reflects the socially and economically legitimate goal of promoting ubiquitous access to affordable communications service for all Americans, regardless of their geography. However, the communications landscape has changed dramatically over the last century, while the framework for promoting universal service has lagged considerably behind. The Universal Service Fund (USF) is mired in bureaucratic red tape, and the FCC has not yet determined what costs are "necessary and sufficient" as mandated by the Telecom Act of 1996. The USF discourages innovation by subsidizing antiquated technologies and multiple competitors in the same geographic market, while leaving other areas without any advanced wireless or broadband service. This threatens America's competitive position in an international economy where academic and business success is conditioned on unfettered access to information and online markets. Congress must act promptly to update the anachronistic USF to comport with the realities of the "Information Age" and the Internet.

• Broadband Deployment: Support the deployment of new broadband services by redirecting existing USF funds and/or creating new subsidies targeted at advanced services, such as broadband access.
• Limit Unchecked Growth: Consolidate and simplify the existing USF funds and cap them to stop the unchecked growth.
• Targeted Subsidies: Apply a "means test" for all broadband subsidies; focus on underserved areas. Also, subsidies should target end user customers, not carriers.
• Competitive Neutrality: Make the USF contribution and distribution mechanisms competitively and technologically neutral.