Universal Service Fund

The Universal Service Fund (USF) provides essential financial support for schools and libraries (E-rate), for Rural Health Care providers, for low-income consumers (Lifeline) and for broadband companies in rural and high-cost areas. This $9 billion annual program was created by Congress in the 1996 Telecommunications Act and is administered by the FCC and the Universal Service Administrative Company (USAC). Unfortunately, the entire USF is under duress in two ways.

First, the current funding mechanism (a fee on interstate/international phone services) has not been modernized in 25 years. Even though the USF supports the availability and affordability of broadband services, broadband services do not contribute to the Fund (the fee applies only to certain telecommunications services). Due to the decline in telecommunications services revenues, the fee has risen from 5% to over 30%, and is projected to go even higher. This funding mechanism is not sustainable. SHLB collaborated with other public interest and industry groups to create the USForward Coalition, which believes that the base of USF funding should be broadened to include broadband internet access service.

Second, a libertarian group has filed constitutional challenges to the USF funding mechanism in three different federal appeals courts. SHLB has intervened to oppose the three court challenges, arguing that Congress provided sufficient guidance to the FCC in section 254 of the Communications Act. 

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Responses of the Schools, Health & Libraries Broadband (SHLB) Coalition to the
Universal Service Fund (USF) Working Group Request for Comment

August 25, 2023
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Ex parte to Commissioner Starks' Office regarding USF reform

July 14, 2022


SHLB spoke with Commissioner Starks' Office in support of contribution reform to the Universal Service Fund, as well as the constitutionality of the USF system.


Download the Letter 


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USForward response to AT&T ex parte
July 8, 2022

SHLB and the USForward coalition submitted an ex parte letter in response to an AT&T letter which questioned the validity of research USForward filed with the FCC.


Download the Letter


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Comments to the FCC regarding the future of the USF

February 17, 2022


SHLB responded to the FCC's Notice of Inquiry about the future of the USF with recommendations to ensure the USF continues to function effectively, including that the Commission should immediately repair the contribution mechanism.


Download the Comments


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Joint ex parte letter to the FCC regarding USForward

February 14, 2022


SHLB was one of 332 organizations that wrote to the FCC urging it to immediately take action to reform and stabilize the USF funding mechanism.


Download the Letter 



View Archived Documents →

Key Documents

February 2022
USF Contributions Reform - Call to Action


September 2021
USForward: FCC Must Reform USF Contributions Now