USF Stakeholders Oppose Overall Program Budget Cap

Opposition poured in to an FCC proposal to cap the overall budget for the various USF programs and to combine the budget cap for two mechanisms to fund anchor institutions, in comments posted through Tuesday to docket 06-122. Stakeholders said such a plan would be difficult to implement and contradicts both the USF mission and the current FCC chairman's top priority to close the digital divide (see 1906030059).

"The Commission's proposed USF cap runs counter to the federal government's policy objectives and the public interest," said Public Knowledge and the National Hispanic Media Coalition in joint comments. They said access to broadband is critical to modern life, and those without affordable access are less able to fully participate in the U.S. society or economy.

The USF already has budget caps for three of its programs, the Connect America Fund targeting high-cost areas, the E-rate schools and libraries program, and the Rural Health Care program, plus an operational budget target for a fourth, the Lifeline program that provides voice or broadband service to low-income consumers. Under the FCC proposal, the Universal Service Administration Co. would place a single cap over USF and combine the budget caps for the E-rate and RHC programs (see 1905240064).

The American Library Association urged the FCC to avoid rule changes that would jeopardize the E-rate program. It said it's "very concerned that combining the two programs' funding will again result in the E-rate program being insufficiently funded." CTIA said the FCC "should recognize that each USF program serves distinct needs and policies that would best be managed at the program level." It also said the agency "should avoid introducing tension between and among USF programs."

Rather than impose a funding cap for the overall USF program, the FCC "should initiate a proceeding to consider how it can improve Lifetime penetration," said Tracfone Wireless. "Eligible telecommunications carriers all around the country have developed processes and service plans to cater to the Lifeline community and stand ready to serve unserved subscribers," it said, but "the program remains significantly underutilized."

Industry Looks for Certainty

USTelecom warned the FCC to be mindful that many of its USF recipients "rely on a pre-established budget to fulfill their broadband missions. Therefore, any post-commitment disruptions to allocated resources could have serious impacts on broadband deployment and use," it said. It asked the agency to ensure specific, predictable and sufficient funding to advance universal service.

ITTA said "reductions in high-cost program disbursements can throw off the very tight and delicately-balanced budgets of the numerous high-cost program distribution mechanisms, which, if anything, could produce greater public benefits with increased funding."

"There is no indication that Congress ever contemplated that the Commission's staff or the Universal Service Administrative Company (USAC) would or could be given limited or unlimited authority to reduce the specific, predictable and sufficient funding of some or all of the authorized USF programs in the event that an overall USF budget were exceeded or projected to be exceeded, or to prioritize or shift funding among or between separate USF programs or mechanism under such circumstances," said WTA.

The Schools, Health & Libraries Broadband Coalition said imposing an overall cap on USF spending "is likely to be found arbitrary and capricious by a reviewing court." It said the proposed budget cap "is not based on any empirical analysis of what it would or should cost to reach the goals of each of the four USF programs."

"The USF programs are working, and the Commission's proposal risks undermining their success," said the Communications Workers of America.

More USF Funding Requested

The National Tribal Telecommunications Association opposes the cap, saying it was introduced as the digital divide continues between rural Tribal areas and the rest of the U.S., and "serious and legitimate questions have been raised about the reliability of the data used to measure broadband availability."

The USF programs are "critically important to non-contiguous insular areas" such as Puerto Rico, said Puerto Rico Telephone in its comments. Existing USF budgets "do not even reflect current levels of need for support under the mechanisms to which they apply, let alone provide a sound basis for setting an overall cap," said Alaska Communications.

Many commenters support evaluating the USF to make sure its funds are used wisely and the program is sustainable but disagreed an umbrella cap would be the best way. The National Association of State Utility Consumer Advocates opposes adopting a hard cap and recommends the agency "focus on more USF program specific concerns, preserve the FCC's flexibility to adopt pilot programs with limited time USF support or provide disaster relief support, and address contribution reform" in service of USF principles, it said.

AARP said that continuing to rely on support solely from customers of voice services is unsustainable "and unfairly burdens older Americans who purchase more voice services than other age groups."

Not all stakeholders opposed the FCC budget cap proposal outright. The Ad Hoc Telecommunications Users Committee supports adopting an overall budget cap for the USF and called the most recent contribution factor of 24.4 percent "obscenely high." It also supports "reasonable flexibility and mechanisms for adjusting the budget caps" to allow expansion of new programs "when deliberate policy decisions are made" to spend toward particular program objectives. The group asked the FCC to expand the revenue base to include an assessment on broadband internet access and adopt a telephone numbers-based assessment for every assigned telephone number.

The Partnership for Artificial Intelligence, Telemedicine and Robotics in Healthcare "supports a broader holistic policy that would permit the Commission to reallocate funding among the four USF programs based on imbalances in the demand for each of the programs consistent with the universal service principles" set by Congress. "The demand for telehealth, telemedicine and connected care will only continue to grow with the explosive introduction of new and innovative technologies, Internet of things, and enhanced and expanded broadband facilities," it said.