Last week, the Senate Subcommittee on Communications, Media and Broadband held a hearing titled “The State of Universal Service.” The Universal Service Fund is our nation’s critical connectivity program that helps ensure that voice and broadband services are available and affordable throughout the country.

Since its creation by Congress in the 1996 Telecom Act, the USF has become a program that millions of families, community anchor institutions and small businesses rely on to get connected. It has been especially valuable for families and businesses that rely on it for work, school and telehealth at home.

The USF spends about $8.5 billion annually to help fund affordable connectivity in rural areas, low-income households, schools, libraries and rural hospitals. Today, the Federal Communications Commission is working to make high-speed broadband as ubiquitous as telephone service, and broadband is the essential communications technology the USF now supports.

While the USF remains vital in an ever-increasing connected world, it is in serious jeopardy of surviving. To fund the programs, telecom providers are required to pay a certain percentage of their interstate and international telecom revenues, known as the “contribution factor.” Typically, telecom providers collect these USF fees from their customers on their monthly bills.

However, the telecom revenues that fund the USF have declined over 60 percent in the last two decades. As a result, the contribution factor has skyrocketed from about 7 percent in 2001 to a historic high of about 30 percent today, as a higher portion of telecom revenues is needed to sustain the fund. That means certain consumers and businesses are now paying an additional 30 percent on top of their phone bills in order to fund the USF.

Telecom revenues continue to decline so rapidly because customers today rely more on broadband services and less on landline and mobile phone services, but broadband revenues do not pay into the USF. While the FCC has modernized each USF program to help support broadband service, it has not modernized its funding mechanism to require broadband services to pay into the Fund even though historically the agency has required supported services to be included in the contribution system.

Without intervention, the contribution factor is predicted to rise to 40 percent by 2025. This is unsustainable and puts the stability of the entire USF at risk. In fact, the contribution factor has become so high that it has led some groups to challenge the USF in federal court as unconstitutional, which also threatens the sustainability of the USF.

Reforming the USF funding mechanism is urgently needed and long overdue

Over 340 diverse stakeholders have come together as the USForward Coalition calling on the FCC to move forward with USF reform by expanding the contribution base to include broadband revenues. This solution is based on the recommendation in the USForward Report (that INCOMPAS helped commission), which was written by USF expert and former FCC official Carol Mattey.

The USForward Report explains that the most logical way to reform the contribution system and sustain the USF is to include broadband revenues in its funding assessment. Under this approach, the contribution factor is estimated to fall to less than 4 percent. It also means that the services that get USF support are paying into it, rather than solely relying on telecom customers, including those that have not made the switch to broadband, such as older Americans.

In fact, some members of Congress understand the urgency of reform and also want the FCC to act. The Reforming Broadband Connectivity Act, for example, is a bipartisan, bicameral bill that would require the FCC to reform the contribution system within one year.

Some question whether large tech companies should be assessed to contribute to the USF, and the short answer is “No.” Tech companies invest $120 billion each year in global internet infrastructure, and unlike broadband providers, these companies do not request or receive USF funding for these investments.

The FCC also lacks the authority to regulate tech companies and doing so would require Congress to act. This would further delay reform and expand the FCC’s regulatory authority over all online content and services — an overreach that many question as too broad since nearly every business today has an online presence and uses the internet to conduct business. Moreover, proposals to target certain tech companies risk skewing the online marketplace and competitive markets.

Some also question whether we still need the USF at all, and the short answer is “Yes.” While Congress allocated tens of billions for broadband, most of this investment is targeted for deployment, yet a significant portion of the USF programs focus on affordability. We not only have to make sure we build out our broadband networks, but also that communities can then afford to subscribe to these services.

The FCC should not wait to reform the USF. The USForward Report sets out a real plan that the FCC can and should implement. Congress should encourage the FCC to act now and save the nation’s critical connectivity program.

Angie Kronenberg is the president of INCOMPAS, where she manages the policy team and its work before federal, state and local governments, as well as leading the association’s efforts on membership and business development. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

In 2011 at the MoBroadbandNow Summit in Missouri, I listened to the CIO of the City of Springfield explain why his city included teenagers in important broadband needs assessment and planning meetings. “In your home, who do you call when you’re trying to figure out how to use the VCR?”

His point? Springfield learned a valuable lesson: Teens push the edges of technology, and understand how to use technology better than many adults do. Therefore, it is imperative to include teenagers in the planning of what is and will be their main future technologies. The brain power and the creativity alone will lead to the success of tapping this demographic.

Fast forward to 2023. How many communities are leveraging their teen populations in the pursuit of broadband and digital equity? “Kids want to get a look into the future,” said Kevin Morris in a video. “That’s the thing that drives many of them in school.” Morris talks to many students as the director of college, careers and community services for the Duarte Unified School District.

What about their future in broadband, I wondered, when a friend talked to me about her efforts to recruit internship positions for the K12 Foothill Consortium? Many of the high school students in the Consortium are anxious to intern remotely or in-person near their homes in Southern California. It hit me — take the Springfield model of teen engagement to the rest of America!

Imagine the possibilities for local broadband or digital equity teams, local government and nonprofits if they can channel bright, tech-savvy, energetic, inquisitive teens on a mission to help bring the digital equity solutions to communities. Remote or in person interns can help with focus groups, town halls logistics, preparing and writing newsletters, usability testing and Affordable Connectivity Program enrollments.

The K12 Foothill Consortium is recruiting internship hosts for the June through August period and for at least 60 hours total. Those groups and organizations engaged with broadband and digital inclusion projects get the benefit of interns’ prior training in coding, health care, web design, engineering and other related disciplines. Since interns prefer paid internships, the Consortium also raises money for organizations that may be too cash-strapped to offer a stipend but can offer meaningful internships.

Photo of Career Technical Education students courtesy of the K12 Foothill Consortium

Internship hosts view the relationships as a win-win for everyone involved. Ivan Ayro, director of adult and career technical education at Charter Oak Unified School District, agrees. “Students are able to connect the educational experience they’re getting from Career Technical Education classes with real-life experience from workplace learning. Through the internships, many of our students are able to realize in high school if this is something that they want to do for the rest of their lives.”

A recent US News & World Report article states that, although internships are traditionally for college students, high school students increasingly are participating in them. Benjamin Caldarelli, co-founder of Princeton College Consulting, a New Jersey-based educational consulting company, said, “High school students want to work somewhere that interests them and potentially make what they feel is a more meaningful contribution. They see internships as an enrichment activity and opportunity to make an impact rather than simply trading time for a little money.”

More than 205,000 new jobs will need to be created to complete the Broadband Equity, Access and Deployment expansion plans, many of them skilled workers. “There is a lot of focus placed on building broadband networks, but we cannot build them without a proper workforce,” Fiber Broadband Association CEO Gary Bolton said in a press release. “Failure to ensure the availability of high-skilled labor will result in workforce bottlenecks, which will ultimately lead to higher costs and project delays.”

The National Telecommunications and Information Association is requiring every state to have a five-year workforce development strategy. FBA published a guidebook to help states develop that strategy. Broadband and digital inclusion teams need to pencil in “internships” as part of their plans.

High school broadband and digital inclusion interns may not be considered skilled workers, obviously, but the interns should be considered the beginning levels of workforce development campaigns in every community. Start people thinking about broadband and all things digital in high school and use internships to shape their college or post-high school plans. Don’t forget that Gen Z can be an important part of broadband discussions, even if they’re not interns.

Amy Foell, principal of Amy Foell Consulting LLC, heads the K12 Foothill Consortium for Azusa, Charter Oak, Duarte and Monrovia Unified School Districts’ CTE. Their mission is to educate and train students to provide a community-sourced talent pool to sustain a healthy, balanced, local economy. Foell also supports workforce development programs across the San Gabriel Valley, including Pasadena Unified School District.

“I like to have an initial phone call and 15 to 20 Zoom sessions to ensure prospective internship sites understand the program,” said Foell. “Before we meet, it’s advisable to create a brief description of the internship project — be sure to share the organization’s purpose and mission. We’ll help hosts identify and interview candidates in May to early June, and students can start mid-June.”

Craig Settles conducts needs analyses, planning, and grant assessments with community stakeholders who want broadband networks and telehealth to improve economic development, healthcare, education and local government. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.