Big Tech has benefited from more people coming online, and should help shoulder the cost of rolling out broadband internet.
That’s the belief of AT&T, which suggested companies like Google contribute to the government’s Universal Service Fund since they directly benefit and profit from that broadband expansion. The USF is one of the key mechanisms to finance the rollout of broadband networks to rural or underserved areas but funding is drying up because it relies on fees from traditional phone service.
Rhonda Johnson, AT&T’s executive vice president of federal regulatory affairs, proposed the idea in a company post last month, while stressing that reforming the Federal Communications Commission’s Universal Service Fund to “future proof” the program is a priority.
The recommendation addresses a concern that’s been widely shared about the USF, which acts as a lifeline that provides low-income households with phone, internet, and wireless service at a cheaper, subsidized rate and provides funding for infrastructure buildouts. The USF, however, is tied to an archaic business that is quickly eroding, meaning it will eventually lack the funds to help anyone.
“Today’s USF funding mechanism was developed in a time where home phone service was the predominant method of communication,” Johnson said. “As a result, voice service revenues were – and continue to be – the primary means by which USF’s programs are funded.”
Johnson said the current system builds off an outdated framework, which places the financial burden on a few companies and their customers. Contributions from such companies increased by nearly 400%. Telecommunications providers pay 29.2% now compared to 6% in 2000 to fulfill USF obligations.
“The current USF funding mechanism is irrevocably broken and must change if we want to help communities across the country get access to high-speed internet,” said Johnson.
Securing sustainable funding for the USF is essential to constructing broadband infrastructure, especially in remote areas, which are significantly more expensive to connect. While others have proposed adding broadband revenue to the fund, Johnson deemed it “woefully shortsighted” and wouldn’t generate the funding the USF needs long-term.
Broadband companies have a smaller growth rate than other Big Tech companies like Google or Meta. Relying on fading telephone companies and limited broadband revenue streams can place the USF on shaky ground, AT&T argued. The telecom giant encouraged the FCC to secure a valid solution by expanding the program to include big tech companies, which has the potential to ensure long-term funding for the USF.