Groups Pressure FCC to Make ISPs Pay For Universal Service
The groups want the FCC to reconsider its April decision to exempt broadband ISPs from helping sustain the USF.
Ted Hearn
WASHINGTON, June 22, 2024 – Federal regulators are coming under pressure to make internet access service companies help finance a major broadband subsidy program, but that’s an approach opposed by the head of the Federal Communications Commission.
In April, the FCC voted to exempt broadband Internet Service Providers from contributing to the $8.1 billion Universal Service Fund, with Chairwoman Jessica Rosenworcel fearing a sharp rise in monthly broadband bills.
On Friday, two organizations submitted a brief petition requesting reconsideration of the FCC’s ISP exemption included in the agency’s Net Neutrality rules now under court review. The rules are scheduled to go into effect on July 22.
The petition was filed by the Affordable Broadband Campaign and WTA ‒ Advocates for Rural Broadband.
“There is strong evidence presented in the record that demonstrates the need for the FCC to begin the process of considering whether and how [broadband ISP] revenues could help secure the FCC’s historic role in advancing the goals under section 254,” the group said.
ABC’s counsel and chair is Gregory Guice and its treasurer is Gigi Sohn, who is also executive director of the American Association for Public Broadband. WTA Senior Vice President of Government and Industry Affairs Derrick Owens signed the petition for the wireless telecommunications association.
In 2023, the USF spent $4.3 billion to subsidize broadband in high-cost rural areas, $2.4 billion to connect schools and libraries, and $869.8 million to assist 7.3 million low-income participants in the Lifeline broadband program, according to that year’s annual report by the Universal Service Administrative Company, which runs the USF for the FCC.
In the Net Neutrality rules, the FCC classified broadband ISPs as telecommunications carriers. Under section 254(d) of the Communications Act, every telecommunications carrier is required to contribute to the USF. The FCC chose to forbear from applying 254(d) to broadband ISPs, a move supported by Free Press, a progressive organization.
“ABC believes that [our] petition demonstrates there are grounds for the FCC to reconsider its decision and do what many commenters and the FCC itself indicates is the better course – develop a fuller record on the issue of what the impact may be on collecting USF contributions on [broadband ISPs],” the filing said.
The petition pointed out that the FCC’s forbearance policy has also prevented states from requiring ISPs to contribute to state USF programs.
The USF derives its funding from a 34.4% fee (called the contribution factor) on legacy telecommunications services, such as phone calls, a revenue source that has been in steady decline. In addition to broadband ISP revenue, digital advertising revenue earned by online giants Google and Meta’s Facebook has not been dunned by the USF.
In a blog post on Tuesday, Rhonda Johnson, executive vice president of federal regulatory relations at AT&T, voiced support for the idea of making Big Tech contribute to create a USF revenue base that could reliably fund the Affordable Connectivity Program, which ran out of money in May.
The ABC-WTA petition did not ask the FCC to consider new USF funding sources other than broadband ISPs, probably because Google and Facebook are not telecommunications carriers subject to section 254(d).
