Universal Service Fund
One issue is a declining revenue base: consumers' spending on the interstate telephone service that funds the USF has been falling for many years.
[10][11] Legally, jurisdiction to regulate rates was split between the Federal Communications Comision (international and interstate) and state commissions (intrastate).
12150 creating a joint board between the Federal Communications Commission and the National Association of Regulatory Utility Commissioners to clearly delineate how telephone regulation was separated by jurisdiction.
Under President Ronald Reagan, the FCC shifted its focus from "social equity to an economic efficiency objective," which it claimed was a primary purpose of the Communications Act of 1934.
The act calls for the creation of a joint federal-state board to make recommendations to the FCC on defining federal universal services and set time tables.
The act provided ability in the constantly changing telecommunication environment to periodically revisit and adjust universal service, while setting core principles (Sec.
Yet many cellular companies are likely to receive less funding under the new rules, which may reduce consumers' access to wireless services in areas of the country that have low populations.
Similarly, a question currently debated is whether access to broadband internet should be supported by the USF and if so, how best to fulfill such a large mandate without damaging the stability of the fund.
Citing reform to the Universal Service Fund as a means "to better serve rural America," Verizon recommended that a limit be set on the size of USF's high-cost fund, competitive bidding wars be employed to determine which company expand service to unserved areas, structure a "wire-center approach" model to replace statewide cost averaging, restructure how contributions to the USF are determined, and impose a deadline on the FCC for completion of their reform of inter-carrier compensation.
[citation needed] Unions such as the Communications Workers of America also endorsed the expansion the Unviersal Service Fund into supporting broadband.
This anticipated move caused an uproar from FCC Democratic commissioners who were concerned about the money being allocated to large corporations instead of the citizens.
FCC commissioner, Jessica Rosenworcel stated that this move "sacrificed $50 million in annual interest that could have been used to support rural broadband, telemedicine & internet in schools.
"[24] On May 21, 2018, the FCC issued an order that prohibited USF programs from buying equipment from Chinese telecommunications companies Huawei and ZTE.
Incumbent local exchange carriers are sub-classified into those that operate on rate-of-return (ROR) model, and those subject to price caps (PC).
[30] In response to the criticism of the rate-of-return model, the FCC made efforts to encourage carriers to voluntarily move to a price cap (PC) approach.
Since 1985, the Lifeline program has provided subsidies to low-income people pay for phone service; first landlines, then cellphones, and as of 2016 it also offers the option of Internet connectivity.
"[FCC 13] The rural health care program provides subsidies to health care providers for telehealth and telemedicine services, typically by a combination of video-conferencing infrastructure and high speed Internet access, to enable doctors and patients in rural hospitals to access specialists in distant cities at affordable rates.
Over $417 million has been allocated for the construction of 62 statewide or regional broadband telehealth networks in 42 states and three U.S. territories under the Rural Health Care Pilot Program.
"[USAC 9] "The Pilot Program provides funding for up to 85 percent of eligible costs of the construction or implementation of statewide and/or regional broadband networks.
"[USAC 9] The E-Rate program "provides telecommunication services (e.g., local and long-distance calling, both fixed and mobile, high-speed data transmission lines), Internet access, and internal connections to eligible schools and libraries.
"[FCC 13] The E-Rate program provides subsidies for Internet access and general telecommunications services to schools and libraries.
[USAC 1] Every year since 2010, the Wireline Competition Bureau announces the funding cap for the E-Rate program to adhere to the current needs of schools and libraries telecommunications.
The USAC receives contributions from all companies providing interstate and international telephone and Voice over Internet Protocol (VoIP) service.
To accomplish this, they can opt to apply the USF fee to the "safe-harbor percentage" of assumed interstate revenue (64.9% for VoIP, 37.1% for cellular service).
The contributions are collected by the Universal Service Administrative Company and disbursed towards four programs that the federal USF supports, as directed by the FCC.
For example, "$5 million worth of equipment purchased by Chicago public schools with E-rate funds was left unused in a warehouse for years."
[24] The USF is able to reward those living in rural or impoverished areas who are capable of paying the entire cost of personal telecommunication services.
Critics argue that inconsistent and asymmetrical audits allow for wealthy consumers to avoid triggering some USF financial burdens.
Suggestions include requiring additional companies pay into the USF such internet service providers,[80] large technology companies,[81] including intrastate telephone services (calls within single states),[citation needed] or increasing contribution requirements from wireless communication providers.
[98] In 2008, Todd Heath filed a lawsuit against Wisconsin Bell under the False Claims Act alleging that the company had charged schools and libraries higher fees than the "lowest corresponding price" (LCP) required under the E-Rate program.
