Congress Should Eliminate the Universal Service Fund’s High-Cost and Lifeline Programs, Says ITIF

WASHINGTON— Following, the Senate Subcommittee on Communications, Media, and Broadband’s announcement of a hearing on The State of Universal Service, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from Joe Kane, director of broadband and spectrum policy:

The Senate is wise to reconsider the role of the Universal Service Fund (USF) since there has been dramatic progress toward closing the digital divide by other means. USF expenditures have continued for years as the contribution factor spirals upward without much evaluation of whether USF programs are achieving their goals. Now, Congress has taken positive steps to improve broadband funding, and it is time to reconsider the need for USF programs. The status quo for USF requires ever-higher fees levied on Americans’ phone bills to fund subsidy programs that are now redundant at best.

The new Broadband Equity, Access, and Deployment (BEAD) program is a more promising avenue for deploying broadband to rural areas than the USF High-Cost program. If a broadband network cannot survive without ongoing subsidies for its operation, then it ought not to get federal support, especially in light of burgeoning satellite broadband options.

For individuals with difficulty paying for broadband, the Affordable Connectivity Program (ACP) is a more flexible and generous program than its USF equivalent, Lifeline. ACP, however, is in danger of exhausting its funding while Lifeline continues apace.

Rather than doubling down on the old, unsuccessful programs by expanding the USF contribution base, Congress should retool its priorities and enact legislation that eliminates the High Cost and Lifeline programs in order to fully fund the ACP.