On March 16, U.S. Senators Ben Ray Lujan, Roger Wicker, Todd Young, and Mark Kelly announced the reintroduction of the Funding Affordable Internet and Reliable (FAIR) Contributions Act. The bill, if passed by Congress, would require the FCC to conduct a feasibility study on collecting Universal Service Fund (USF) contributions from Internet edge providers.
In a July 22, 2021 blog post, "Bill Would Require FCC to Consider Big Tech Contributions to Universal Service Fund," Free State Foundation Senior Fellow Andrew Long wrote about the FAIR Contributions Act upon its introduction in the 117th Congress. As Mr. Long explained, the FAIR Contributions Act would require the FCC to study and report to Congress on the classes of services that potentially could be assessed, along with the relative merits for different proposals for selecting those services and ways of calculating the required USF contributions. The study and report also would address what sort of statutory authority the Commission would need in order to adopt such contribution reforms as well as the impact of such reforms on universal service programs. Additionally, the report would address the continued necessity of USF once broadband service capability has been deployed to all Americans.
USF contribution reform is sorely needed, as I reiterated in my March 15 blog post, "Consumers Still Burdened as FCC Sets USF Surcharge Rate at 29%." Indeed, as Free State Foundation President Randolph May, Mr. Long, and I wrote in public comments filed in the FCC's Report on the Future of the Universal Service Fund proceeding in February 2022:
As it now stands, the existing universal service system is fiscally unsustainable, and it most likely will collapse unless it is fixed. The USF contribution base is shrinking while program expenditures exceed $8 billion per year. Voice consumers are subject to a 25%-to-30% surcharge rate that has climbed exponentially over the last two decades. When Congress enacted Section 254 in 1996, it primarily had in mind voice services, not broadband services. Going forward, the universal service system needs a substantial make-over to comport with today's broadband- centric Internet ecosystem.
The FAIR Contributions Act is a step is step in the right direction. There is plenty of upside in authorizing a careful study of the issue and no downside in doing so. The Senate should timely advance the bill and the 118th Congress should pass it.
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