Legislation Would Force Big Broadband To Contribute to USF

Proposed legislation in Congress would, for the first time ever, force large broadband providers and "edge providers" of content to contribute to the Universal Service Fund (USF).

The Universal Service Fund, administered by the Universal Service Administrative Company (USAC) operates several programs designed to benefit schools, libraries, and hospitals get connected to broadband, as well as subsidies to providers in high-cost areas. A key component to the USF, the Lifeline program, benefits lower-income Americans with a monthly subsidy toward their telephone or internet service. Currently, the USF is supported by a surcharge on certain long distance telephone revenues. As long distance calling revenues for providers have steadily declined, the surcharge has risen steadily and now amounts to 34.5%. This contribution factor is almost always passed on to the consumer by the provider.

---

The new legislation, "Lowering Broadband Costs for Consumers Act of 2023", would force broadband providers that account for more than 3% of annual internet traffic and earn more than $5 Billion to pay into the fund. In addition to impacting some of the nation's biggest ISP's, it would require large edge providers of content like Alphabet, Meta, Amazon, Apple, Microsoft, and Netflex to make a contribution.

In an article at Fierce Telecom, one of the co-sponsors, Senator Markwayne Mullin (R-OK), said the legislation is needed.

“Fair contributions to the USF from edge providers are long overdue. Video streaming services account for 75% of all traffic on rural broadband networks. However, unrecovered costs from streaming companies are often shifted and borne by small rural broadband providers.” - Sen. Markwayne Mullen (R-OK)

The proposed legislation has received support from indsutry associations that support small ISP's such as the NTCA - The Rural Broadband Association. Big cable/broadband advocates are opposed.