A proposed Senate bill is calling for Big Tech companies like Apple, Google-parent Alphabet, Meta, Netflix and Amazon to start chipping into the multi-billion-dollar federal fund that provides Americans with low income, schools and libraries, and rural and tribal communities with affordable internet.
U.S. Senators Mike Crapo, a Republican from Idaho, Markwayne Mullin, a Republican from Oklahoma, and Mark Kelly, a Democrat from Arizona, introduced the Lowering Broadband Costs for Consumers Act of 2023, which aims to introduce the first reforms to the Universal Service Fund in years.
The USF has played a key role in insuring that all Americans have access to “universal services” that began with phone lines, but has now expanded to high-speed internet and wireless service. The program is funded by fees paid by the likes of Verizon, AT&T, Comcast related to wireline phone service, which are passed down to consumers through fees in their bills. But with fewer people using traditional fixed-line voice, the source of funds for the program has steadily shrunk, which leaves phone providers either raising the fees or the government rebooting the USF program. In 2022, universal service distributions total over $7.4 billion.
Regulators and the broadband industry have long called for reforms to the USF, which has seen its source of funding shrink over the years. Shifting some of the burden onto the tech companies could mean alleviating some of the fees that consumers have to pay for their phone service.
The bipartisan bill followed the Federal Communications Commission’s report on the state of USF, as mandated by President Job Biden’s bipartisan Infrastructure Investment and Jobs Act of 2021. It calls for “edge providers,” namely the big tech companies that rely on services delivered via the internet, to contribute to the fund. It also limits those providers to those with more than 3% of the estimated quantity of broadband data transmitted in the U.S. or generated less than $5 billion in revenue during the most recent year, so smaller players wouldn’t be affected.
It also calls for the FCC to provide a way to offer more support for costs incurred by the broadband providers that aren’t recovered. It also limits the agency’s authority over Big Tech and the broadband providers to just overseeing the contributions to the USF.