FCC, NTIA Chiefs Appoint Jessica Quinley, Douglas Brake, and Timothy May to Advisory Boards: Broadband Breakfast


WASHINGTON, March 17, 2022 — Some organizations are calling on the Federal Communications Commission to offload responsibility for financially supporting key programs to extend basic telecommunications services from service providers to the general public via taxation, according to ongoing submissions to the agency.

The reason for this is that the communications landscape since the adoption in 1997 of the Universal Service Fund, which supports several expensive programs for universal broadband, has changed significantly so that all Americans depend on more modern communications. And with that, there are calls to reform the program beyond its reliance on declining voice service revenue.

“Direct credits [general taxation] would be the easiest way to spread the funding needs of such programs — which benefit all American businesses and consumers — on the broadest and fairest funding basis,” AT&T said in its brief, which previously supported such a position.

Thursday was the last day to submit comments to the FCC’s study into the future of USF. The program supports the Schools and Libraries E-rate Grant Program, the Lifeline Program for low-income individuals, the Rural Health Care Program, and the Connect America Fund for rural areas.

But USF is operating under a growing burden that hasn’t changed in decades: Its dependence on revenue from voice services — downloaded to customers — has stretched the program to about $8 billion to $9 billion a year. year, which saw a tax hit a record high. 33.4% voice revenue down from last year.

“The Commission has placed increased emphasis on a small subset of communications services and providers with a shrinking subscriber base to achieve national universal broadband goals,” AT&T added, “in particular, enterprise services offered by former telecommunications companies, companies that historically and today are the largest contributors to the Fund.

The FCC is considering a dichotomy of recommendations, according to an analysis of FCC submissions: either draw USF funding from general taxation, or broaden the base of revenue support to broadband revenues generally and/or include ‘other companies that benefit from broadband, including large technology companies.

More support for the congressional budget item

Among the organizations supporting a decision to shift the general tax burden to USF are the Internet Innovation Alliance, the Cellular Telecommunications Industry Association, the United States Chamber of Commerce, and TechFreedom, a nonprofit technology think tank. lucrative.

“Adopting a general appropriation process for broadband programs will help ‘future-proof’ these programs to account for new technologies to deliver communications services to consumers and businesses,” the Chamber said. of business. “The appropriations process allows Congress to better adapt broadband programs on a regular basis to reflect market changes and new communications technologies. It will also avoid the challenges currently facing USF.

But while TechFreedom opposed expanding the contribution to big tech companies because the FCC “can’t do it unilaterally,” other members of the group supporting a Congressional article said big tech companies should be a target if support cannot come from taxation.

“Short of general revenue,” the CTIA said, “significant parts of the economy, such as digital advertisers, online marketplaces and streaming services, rely heavily on broadband networks and take advantage of the availability of broadband services to generate huge amounts of revenue.

The IIA added, “If adding an $8 billion line item to the annual Congressional budget is deemed impractical, an alternative approach that should be considered is to expand the USF contribution base to include revenues of large Internet companies.”

Big Tech must pay

AT&T said that if its general tax proposal cannot pass, it should seek to broaden the base to include large tech platforms, whose business models it says “now depend on and dominate the internet ecosystem.”

Verizon recommended the commission broaden the base to online platforms with a “specified number of active users or meeting certain sales or market capitalization thresholds,” a recommendation made by the FCC commissioner. Brendan Carr in a Newsweek op-ed last year, FCC Chairman Jessica Rosenworcel called “intriguing” and which received some Republican support. FCC Commissioner Nathan Simington also mentioned the idea in an interview in September.

The NCTA Rural Broadband Association also recommends that the FCC move toward requiring contributions from large companies “whose video streaming and other” Internet-based businesses are largely dependent on the availability and affordability of services. robust broadband across the country.”

The Coalition of Rural Wireless Carriers, the nonprofit Free State Foundation, and a coalition of academics and policy experts have also called for the fund to be opened up to major tech platforms. Academics and policy experts have argued that it is not fair that consumers or certain telecommunications companies are burdened with the weight of USF and that they should instead be left to “half a dozen technology companies…responsible for up to 80% of network traffic during peak hours. time.”

Generate Broadband Revenue

As calls for a possible Big Tech tax emerged, Carole Mattey, a former deputy head of the Federal Communications Commission, released a report in September calling on the FCC to expand the base to include broadband revenue. The report was followed by calls for Congress to stabilize the fund and for the FCC to take immediate unilateral action because supporters say the agency had jurisdiction to do so.

Advocacy group Public Knowledge, trade associations INCOPAS and USTelecom, Rural Wireless Association, Coalition of Rural Wireless Carriers, and nonprofit broadband advocate Benton Institute have also proposed that the FCC generate broadband revenue, which some say can be implemented quickly.

Benton, however, went further in warning against general taxation, calling it “ill-advised and, in fact, extremely dangerous.

“Even with multi-year appropriations (which is very difficult to accomplish legislatively for both political and technical reasons), leaving USF to the vagaries of the appropriations process would unquestionably run counter to the established – and essential – objective of maintaining specific and predictable funding mechanism, and would likely jeopardize the need to provide sufficient funding as well.

It was a position supported by chris nelsonvice chairman of the South Dakota Public Utilities Commission, who said during a debate on USF reform last year that a general appropriations item would mean the composition of the fund could vary from year to year. the other with the turnover of legislators.

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