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1. What Section Of The Usc Deals Primarily With Universal Service?

American system of telecommunication subsidies and fees

The Universal Service Fund (USF) is a system of telecommunications subsidies and fees managed by the United States Federal Communications Committee (FCC) intended to promote universal access to telecommunications services in the United states. The FCC established the fund in 1997 in compliance with the Telecommunication Act of 1996. The FCC is a regime bureau that implements and enforces telecommunications regulations across the U.Southward. and its territories.[i] The Universal Service Fund's budget ranges from $five–viii billion per year depending on the needs of the telecommunications providers. These needs include the cost to maintain the hardware needed for their services and the services themselves. The total 2019 proposed upkeep for the USF was $8.4 billion.[2] The budget is revised quarterly allowing the service providers to accurately estimate their costs. Equally of 2019, roughly 60% of the USF budget was put towards "high-cost" areas, 19% went to libraries and schools, xiii% was for low income areas, and 8% was for rural wellness care.[2] In 2019 the rate for the USF budget was 24.iv%[iii] of a telecom company's interstate and international end-user revenues.[four]

While separate itemization is not required past the FCC, it is common for USF fees to be listed separately from other charges on a consumer'due south neb.[five] [6] Universal Service charges should not be confused with what are sometimes referred to in telephone company bills as "Federal Subscriber Line" charges, which are access fees charged past telecommunications companies, not the local or federal government.[5] [half-dozen]

Some have raised concerns about the future funding of the USF; despite falling taxable revenues, the size of the fund has increased from $ane.2 billion in collections at five.vii% in 4Q 2000,[seven] to $two.ii billion in 4Q 2014 at 16.1%.[eight] Some believe that reclassifying broadband Internet access services under Title II of the 1996 Telecommunications Act would be followed by requiring ISPs to pay into the USF every bit a new source of revenue for the fund.[nine] The FCC has made clear that the change does give it the ability to do so, simply will not crave contributions on broadband Net access revenues at this time,[10] as the FCC will forbear from the contribution requirements in Department 254(d) of the Communications Human activity.[11]

History [edit]

Calls for universal service [edit]

By 1913, AT&T had favored status from U.Due south. authorities, allowing it to operate in a noncompetitive economic environment in substitution for subjection to cost and quality service regulation. The government asserted that a monopolistic telephone industry would best serve the goal of creating a "universal" network with uniform engineering land-broad for telephone consumers. Regulators emphasized limits on profits, enforcing "reasonable" prices for service, setting levels of depreciation and investment for new technology and equipment, dependability and "universality" of service. "Universal" was originally used by AT&T to mean, "interconnection to other networks, not service to all customers". Later on years of regulation, the term came to include infrastructural development of telephony and service to anybody at a reasonable price.[12]

Willis Graham Deed of 1921 [edit]

The Willis Graham Human action of 1921 was called into action in guild to resolve pressing issues in the debate well-nigh the merits of interconnectivity of telecommunication.[thirteen] The act marks the first slice of legislation in the history of telecommunication to tackle the increasingly difficult challenges of the telecommunication industry in the 20th century.[14] Before the Graham act was passed the commonly expressed stance was, such as past the Senate Commerce Committee, that telephone service fit the definition of a natural monopoly.

The central practical problem, co-ordinate to the committee, with the Willis Graham Human action was competing telecommunication services serving one individual marketplace.[xiv] The human activity was in favor of a monopoly, which aimed to exempt competing phone companies from the antitrust laws and allow them to unify the service by merging competing telecommunications service providers.[13] The master principle behind the human action was that at that place should exist simply one system in each community through which all users communicate. The focus was exclusively on local service rather than long-distance service, as no independent long-altitude lines were able to compete with AT&T.[xiv]

Communications Act of 1934 [edit]

The Communications Deed of 1934 includes in its preamble a reference to universal service. It calls for "rapid, efficient, Nation-wide, and world-wide wire and radio advice service with acceptable facilities at reasonable charges" to "all the people of the United States." Communications Act of 1934 – Title I, Sec. 1 [47 U.s.a.C. 151] The Communications Act of 1934 first established the concept of making affordable bones telephone service available to everyone everywhere within a nation, country, or other governmental jurisdiction.

To comply with the act, AT&T began increasing the cost of long-distance service to pay for universal service. The act also established the FCC to oversee all not-governmental broadcasting, interstate communications, likewise every bit international communication which originate or terminate in the Usa.

Before the Telecommunications Act of 1996, the Universal Service Fund (USF) operated every bit a machinery by which interstate long-distance carriers were assessed to subsidize telephone service to low-income households and high-price areas in order to ensure that all the people in the United States accept access to rapid, efficient, nationwide communications service with sufficient facilities at realistic charges.[xv]

Ozark Plan [edit]

In the 1960s the telecommunication monopolies were shocked by new evolving technologies and competitions: new long-distance carriers and microwave networks were authorized. The predominant method used for financing subsidies for the underprivileged was to reallocate profit margins made by long-distance telecommunications to funds for local telephone connection. This process began in the mid 1960 and was institutionalized through the Ozark programme of 1970 into action. At the time of the institutionalization phone penetration ranged between 85–95%.[13]

Era of deregulation [edit]

There was a push for deregulating the telecommunications industry in the 1980s. Under President Ronald Reagan, the FCC shifted its focus from "social equity to an economic efficiency objective," which information technology claimed was a primary purpose of the Communications Deed of 1934.[12] Later on AT&T was split upward in 1984, universal service was still "supported past a organization of to a higher place-cost access charges paid to local substitution companies." This organisation was administered by the National Exchange Carrier Association. Increased competition and universal service were after legislatively addressed and codified with the Telecommunications Act of 1996.[xvi]

Telecommunications Human action of 1996 [edit]

The Universal Service Fund was beginning codified in the Telecommunications Human action of 1996, the starting time major rewrite of the Communications Deed of 1934. The act addresses new challenges and opportunities of the digital information age, with the goal of promoting an economic surround conducive for the growth of new data technology. It also further developed the meaning and implementation of universal service. The deed calls for the creation of a joint federal-state board to make recommendations to the FCC on defining federal universal services and set time tables. The act also set out immediate priorities of universal service. These include quality and reasonably priced services, access to advanced telecommunication services, access for rural, low-income and high-price regions, equitable and nondiscriminatory service, specific and predictable cost structure, access of advanced telecommunications services for schools and health intendance and libraries (Sec. 254(b)(1)-(seven)). The act provided ability in the constantly irresolute telecommunications environment to periodically revisit and adapt universal service, while setting core principles (Sec. 254(c)). The 1996 act too "mandated the creation of the universal service fund (USF) into which all telecommunications providers are required to contribute a percentage of their interstate and international end-user telecommunication revenues".[16]

The major goals of Universal Service as mandated by the 1996 Act are as follows:

  • Promote the availability of quality services at only, reasonable and affordable rates for all consumers
  • Increase nationwide access to avant-garde telecommunication services
  • Advance the availability of such services to all consumers, including those in depression income, rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in urban areas
  • Increase access to telecommunication and advanced services in schools, libraries and rural health care facilities
  • Provide equitable and non-discriminatory contributions from all providers of telecommunications services to the fund supporting universal service programs

The 1996 Human action states that all providers of telecommunications services should contribute to federal universal service in an equitable and nondiscriminatory style; there should be specific, predictable, and sufficient Federal and State mechanisms to preserve and accelerate universal service; all schools, classrooms, health care providers, and libraries should, generally, have access to avant-garde telecommunications services; and finally, that the Federal-State Joint Board and the FCC should make up one's mind those other principles that, consistent with the 1996 Act, are necessary to protect the public involvement.[17]

Expansion of the fund into broadband [edit]

The concept of universal service may include other telecommunications-information services, mainly Cyberspace admission. Members of Congress accept spoken out in favor of increased contribution to the USF from alternate sources.

Many of the services covered by the USF are related to traditional telephone technology. At that place is a rise business that more recent developments in telecommunications are but as of import to the consumer equally these older technologies. For example, consumers' subscriptions to traditional telephone services have fallen while their subscription rate to wireless services have been ascension consistently. Yet many cellular companies are likely to receive less funding under the new rules, which may reduce consumers' access to wireless services in areas of the country that have low populations. Similarly, a question currently debated is whether admission to broadband internet should be supported by the USF and if so, how best to fulfill such a big mandate without dissentious the stability of the fund. The Telecommunications Deed of 1996 states that "advanced services" should exist accessible to all Americans [Section 254(b)(iii)]. One question is whether the providers of cyberspace access should contribute to the fund like other companies that provide access to telecommunications, if such providers besides want to describe from the fund. Supporters of including internet access in the Universal Service Fund include former Congressman Rick Boucher (D-VA)[18]

Adding additional services to the fund has corporate back up from major telecommunications companies, including Verizon and AT&T. In March 2009, senior executives from Verizon Communications met with the House Subcommittee on Communications, Technology, and the Internet, providing recommendations for how best to proceed bringing broadband and mobile communication admission to rural and unserved areas. Citing reform to the Universal Service Fund as a means "to ameliorate serve rural America," Verizon recommended that a limit be set on the size of USF's loftier-cost fund, competitive behest wars be employed to decide which company aggrandize service to unserved areas, structure a "wire-centre approach" model to replace statewide toll averaging, restructure how contributions to the USF are determined, and impose a borderline on the FCC for completion of their reform of inter-carrier compensation.[nineteen]

In October 2011 the FCC formally proposed a "Connect America Fund" to address these and other concerns.[20] Reform finally arrived on Oct 27, 2011, when the FCC approved a six-year transfer process that would transition coin from the Universal Service Fund to a new $4.5 billion a year Connect America Fund that will back up the expansion of broadband services to areas that don't have broadband access yet.[21] [22]

In June, 2015, the FCC announced steps to modernize and reform Lifeline for broadband.[23] Public comments were sought, with a deadline of August 31, 2015. The collection of public comments are available hither.[four] The NDIA played a critical role in providing comments and encouraging others to participate in the process.

On April 1, 2016, the Federal Communications Commission voted to expand the Lifeline telephone subsidy for low-income Americans to include Internet access.

On April 27, 2016, the full text of the ruling was released.

The key points of the conclusion include:

  • Establishes a National Eligibility Verifier to verify eligible Lifeline subscribers. Eligibility will exist based on participation in SNAP, Medicaid, SSI, Federal Public Housing Assistance, the Veterans *Pension do good programme, current Tribal qualifying programs, or those who tin can demonstrate income of less than 135 percent of the federal poverty guidelines.
  • Defines minimum service standards for broadband and mobile voice services.
  • Defines a five and half year transition plan to migrate from vocalisation-focus to broadband-service-focus.
  • Creates a Lifeline Broadband Subscriber designation process to encourage new service providers.
  • Requires that Lifeline providers make available hotspot-enabled devices and Wi-Fi enabled devices when providing such devices for utilise with the Lifeline-supported service.
  • Directs the Consumer and Governmental Affairs Agency (CGB) to develop recommendations to accost the not-cost barriers to digital inclusion. In addition, CGB's programme should address best practices for increasing the digital skills of those already online and how those best practices can exist spread throughout the digital inclusion community.

Components [edit]

USF's money is funded and then spent amongst the fund's 4 programs. The Connect America Fund provides funding for telephone companies that provide services to high-cost areas. The Low-Income Support "assists low-income customers by helping to pay for monthly telephone charges so that phone service is more affordable."[24] The E-Rate program "provides telecommunication services (e.g., local and long-distance calling, both fixed and mobile, loftier-speed data manual lines), Net access, and internal connections to eligible schools and libraries."[24] Lastly, the Rural Health Care Support program "provides funding to eligible wellness care providers (HCPs) for telecommunications and broadband services necessary for the provision of health intendance."[24] Every bit far as State funds go, they have experienced inhibited growth. "The growth of State USF funds was tempered by reductions in Lifeline support and IAS funding, both driven by changes in federal regulation."[25] At that place currently are forty-five states that provide some sort of State universal service support in add-on to the existing federal funds. There are 6 states, however, that do non take any state funds. These include Alabama, Florida, Massachusetts, New Jersey, Tennessee, and Virginia.

The Universal Service Fund equally made up of the post-obit four constituent programs:

Connect America Fund [edit]

The largest and about complex of the four programs, the high cost program subsidizes telecommunications services in rural and remote areas. The program paid out $iv.2 billion in subsidies to telecommunications companies in 2013,[26] with a goal of making telecommunications affordable to rural and remote areas. The plan has been criticized every bit wasteful, granting large sums of money to telecommunications companies while having fiddling effect on access.[27]

As part of the National Broadband Program proposed in March 2010, the FCC proposed reorganizing the High Cost program into a new "Connect America Fund", which volition include both vocalization and 4 Mbit/due south internet connectivity.[28] On Oct 27, 2011, the FCC approved a 6-year transfer process that would transition the coin from the Universal Service Fund Loftier-Cost Program into the new $4.five billion a year Connect America Fund, finer putting an end to the USF High-Cost Fund by 2018.[21] [22] [29]

In 2012, during "Phase I" of the Connect America Fund, $115 meg in subsidies were given out to build out broadband in 37 states, with $71.9 million going to Frontier Communications and $35 meg to Century Link, with AT&T and Verizon declining to participate.[30] In 2013, also during "Phase I", CenturyLink accepted another $54 million,[31] and AT&T accepted $100 one thousand thousand.[32]

In March 2014, the FCC canonical "Phase 2" of the transition to the Connect America Fund, adding $ane.viii billion a twelvemonth in funding,[33] and clarifying the specifics of the funding process. Under the framework the FCC approved, incumbent carriers have priority access to subsidies, just if the funds are declined, the funds are allocated by a competitive bidding process. The FCC also proposed upping the minimum speed requirement from 4Mbit/s to 10Mbit/south.[34] In May 2014, the 10th excursion courtroom of appeals upheld the shift in funds in the face of a legal challenge past telephone companies.[35] [36]

The Connect America Fund also includes the Mobility Fund, which is given to wireless carriers who aggrandize service to underserved areas. "Stage I" of the Mobility Fund offered $300 million for a September 2012 round of auctions, and "Phase II" of the Mobility Fund plans to requite out $500 million in annual back up.[37]

Low income (Lifeline) [edit]

Since 1985, the Lifeline program has helped depression-income people pay for phone service; outset landlines, then cellphones, and as of 2016 it also offers the option of Cyberspace connectivity.[38] Information technology provides a subsidy of upwards to $x.00 a month for Americans beneath 135% of the poverty line for this service.[ commendation needed ]

Every bit of 2012, 17 million households received a $9.25 subsidized discount through the program. This was down to 12 1000000 households by 2015.[39] [38] In 2013, the Lifeline plan paid out $1.8 billion in subsidies to telephone companies; reduced to $1.5 billion by 2015.[26] [38] As the original program was set up to comprehend land lines, there was criticism of meaning waste material in the programme.[twoscore] Residents of Native American Indian and Alaska Native tribal communities may qualify for enhanced Lifeline assistance (upwards to an additional $25.00) and expanded Link-Up back up (up to an additional $70.00). States with their ain programs may have their own eligibility guidelines.

On January 31, 2012, the Federal Communications Commission approved an order irresolute the Lifeline Program to reduce fraud and abuse.[41] [42] In April 2013 a hearing was held before the Subcommittee on Communications and Applied science of the Committee on Energy and Commerce, U.South. Business firm of Representatives, to explore issues relating to whether the plan should be eliminated or placed nether a upkeep cap, and if non, whether a freeze should be put in place until the reform measures currently underway are completed.[43]

The Lifeline programme is limited to one disbelieve per household. A "household" includes anyone living at the same address "who share income(due south) and household expenses".[44]

Link-Up America assisted consumers with the installation costs of telephone service. Link-Up programme paid up to 50% or $thirty of the telephone service installation fees,[45] and provides upwards to $200 of ane year, interest-free loans for any additional installation costs. On January 31, 2012, among other changes to the Lifeline Programme, the FCC announced that they would be catastrophe the Link-Up America Programme, except on Indian reservations.[45]

In 2016, Lifeline services were expanded to offer a broadband pick.[38]

This is the proposed toll and information plan for the Lifeline program reform.

On March 31, 2016 the Federal Communications Committee set a programme to reform the Lifeline program. The reform attempted to make the Lifeline programme more mod and comprehensive to nowadays solar day society. The 2016 Lifeline Modernization Order included that broadband service would be provided to depression income households as an addition to the preexisting Lifeline program benefits. The Committee likewise set service standards in club to ensure the highest value for the Universal Service Fund. The FCC projected that the annual amount of mobile vocalisation minutes available for each individual household per month volition increase, while the toll of voice support will simultaneously decrease and will eventually become a completely unsubsidized service.[46] The FCC also appointed a National Eligibility Verifier whose purpose would be to decide the eligibility of the independent subscribers to the programme.[46]

In February 2017, FCC Commissioner Ajit Pai suspended the expansion of Lifeline. While electric current broadband providers are technically authorized to provide subsidized broadband, the FCC itself could not point to a single company that actively provides broadband.[47]

Companies [edit]

  • Assurance Wireless
  • Safelink Wireless
  • Life Wireless

Rural wellness intendance [edit]

The rural wellness care plan provides subsidies to health care providers for telehealth and telemedicine services, typically by a combination of video-conferencing infrastructure and high speed Internet access, to enable doctors and patients in rural hospitals to access specialists in afar cities at affordable rates. The Rural Wellness Care Support Mechanism allows rural health care providers to pay rates for telecommunications services like to those of their urban counterparts, making telehealth services affordable. Over $417 million has been allocated for the construction of 62 statewide or regional broadband telehealth networks in 42 states and three U.Due south. territories under the Rural Health Intendance Airplane pilot Program.[48] In 2013, the rural health care programme paid out $159 meg.[26]

At that place are three components of the Rural Wellness Intendance Programme: Telecommunication Program, HCF Plan, Pilot Program.[49]

"The Telecommunication Program (formerly known equally the Primary Program) provides discounts for telecommunication services for eligible health intendance providers (HCPs)."[49]

"The Healthcare Connect Fund (HCF) Program is the newest component of the Rural Wellness Care Program. The HCF Program will provide a 65 percent disbelieve on eligible expenses related to broadband connectivity to both private rural health care providers (HCPs) and consortia, which can include non-rural HCPs (if the consortium has a majority of rural sites)."[49]

"The Airplane pilot Program provides funding for up to 85 percent of eligible costs of the structure or implementation of statewide and/or regional broadband networks. At that place are l active projects involving hundreds of health care providers (HCPs)."[49]

Schools and Libraries Program (E-Rate) [edit]

The E-Charge per unit program provides subsidies for Cyberspace access and general telecommunication services to schools and libraries. The subsidies typically pay 20% to 90% of costs based on need,[50] with rural and low-income schools receiving the greatest subsidy. In 2013, the E-Charge per unit program paid out $2.2 billion.[26] USAC has more than than $37.3 billion in Eastward-Charge per unit funding commitments and $26.8 billion in East-Rate funding disbursements issued to schools and libraries nationwide through the Due east-Rate from 1998 to 2013.[26] Every year since 2010, the Wireline Competition Bureau announces the funding cap for the E-Rate program to attach to the current needs of schools and libraries telecommunications.[51]

"The Eligible Services List (ESL) for each funding year provides guidance on the eligibility of products and services under the Schools and Libraries Program." In 2015, USAC outlined 2 specific categories for grouping the ESL, and i category for miscellaneous services.

  • "Category Ane
    • Information Transmission Services and Cyberspace Access, and Vocalisation Services
  • Category two
    • Internal Connections, Managed Internal Broadband Services, and Basic Maintenance of Internal Connections
  • Miscellaneous"[52]

Starting in the 2011 funding year, the different types of schools eligible to receive benefits now include:

  • "School on Tribal lands
  • Schools that serve children with physical, cognitive, and behavioral disabilities
  • Schools that serve children with medical needs
  • Juvenile justice schools, where eligible
  • Schools with 35 percentage or more students eligible for the National School Lunch Program (NSLP)."[53]

Assistants [edit]

Universal Service Administrative Company [edit]

The logo of the Universal Service Administrative Company

Following the Telecommunications Human activity of 1996 and the subsequent cosmos of the Universal Service Fund, the FCC designated the independent American nonprofit corporation named the "Universal Service Administrative Company" (Universal Service Administrative Co) to manage the contribution of revenue to and distribution of funding from the Universal Service Fund. The Schools and Libraries Corporation and the Rural Health Intendance Corporation were merged into the USAC on Jan ane, 1999.[54] The USAC is a subsidiary of the National Commutation Carrier Clan, and is governed by a 19-person board of directors representing various stakeholder interests and carries out rules adopted by the FCC.[55] The company has 356 employees.[26]

USAC reports quarterly revenue projections detailing what contributions are expected and detailing what actions are taken in the expansion and bolstering of universal service. The USAC receives contributions from all companies providing interstate and international telephone and Vox over Net Protocol (VoIP) service. Contributors send payments based on projected quarterly earnings. The FCC does not crave companies to charge their customers for these contributions – this funding decision is left up to the private companies.[56] This acquirement is deposited into a central fund, from which the USAC distributes money to the four central services at the core of the USF: High Toll, Low Income, Schools and Libraries, and Rural Health Care.

Providers of telecommunication services are legally required to contribute to the Universal Service Fund. "The USAC collects revenue data from USF contributors on the FCC Form 499-A (Annual Telecommunications Reporting Worksheet) and FCC Course 499-Q (Quarterly Telecommunications Reporting Worksheet)."[57] The USAC is responsible for estimating how much money is needed for the USF program. The USAC provides a "need filing," to the Federal Communications Commission (FCC) each quarter in its FCC Filings.[57]

In the by, but long-distance companies fabricated contributions to back up the federal Universal Service Fund. The Telecommunications Human activity of 1996 expanded the types of companies contributing to the Universal Service Fund. Currently, all telecommunications companies that provide service between states, including long-distance companies, local phone companies, wireless telephone companies, paging companies, and payphone providers, are required to contribute to the federal Universal Service Fund. Carriers providing international services also must contribute to the Universal Service Fund. In June 2006, the FCC voted to require providers of VoIP services to contribute to the Universal Service Fund the aforementioned way traditional telephone services had been contributing.[58]

While the USAC cannot act without Congressional approval, it can make recommendations. USAC recommendations have resulted in expanding telecommunications resources, peculiarly broadband Internet and mobile access to schools and libraries, and recognizing VoIP as a grade of interstate and international advice, which requires those companies providing VoIP services to contribute to the USF.[59]

Federal Communications Commission [edit]

The FCC oversees the USAC'south assistants of the Universal Service Fund, and institutes reforms as it sees fit. Although the fund is express by the telescopic of US law, (mainly the 1996 Telecommunications Human action) the FCC has played a part in making several changes to the fund, including shifting funds from the loftier cost program towards broadband expansion. Under the FCC, in that location is an Enforcement Bureau that investigates and pursues the violators of the Act of 1996 and any Commissions rules.[60]

Funding [edit]

All providers of telecommunications service support the Universal Service Fund. These providers contribute to the fund "based on their interstate and international terminate-user telecommunications revenues." This percentage of contribution is "adapted every quarter based on projected demand for Universal Service funding." As of the end of 2019, telecommunication companies were required to contribute 25%[61] of their acquirement to the fund. Currently, the FCC has proposed to lower this to 21.2%[62] for the kickoff quarter of 2020. However, not all companies cover the accuse themselves. Instead they beak their customers to make up the corporeality. While companies are non required to charge the client, they must come with the funds and many service providers find this to be their solution. The contributions are nerveless by the Universal Service Administrative Company and disbursed towards iv programs that the federal USF supports, every bit directed by the FCC.[63]

Land universal service funds [edit]

Taxes, Fees, and Government Charges on Wireless Service, July 2016

Many Usa States have their own universal service funds, with budget and assistants contained of the much larger federal fund. Examples include in California,[64] New York,[65] Wisconsin,[66] and Texas.[67]

Controversy [edit]

Wide disagreement over the nature and assistants of the USF exists in telecommunication policy circles.[68] Such disagreements fragment traditional partisan alliances in the United States Congress. Fears continue to abound about what such subsidies mean, and how it will affect telecommunications in the long run.[69] Critics of the USF programs fence that at that place are many macro-level issues which are caused past the ¨systematic design problems that take significant adverse bear on on consumers and the carriers providing service.¨[seventy] Service providers and consumers alike are disproportionately granted subsidies or billed because of the lack of organization amid the four programs. Discussions continue over whether the USF should be used to provide services such every bit broadband cyberspace access.[71] Plans to subsidize internet service providers has led to backlash from traditional telecommunications carriers. Traditional carriers argue that "the relevant provisions of the 1996 Deed practice not give the FCC carte blanche to play regulatory Robin Hood with their universal service contributions."[72] Considering ISP's and traditional telecommunication carriers oftentimes provide similar services, the USF may "violate[] the pro-competitive precepts of the 1996 Act."[72]

Concerns nearly 2011 changes [edit]

In 2011, the FCC made material changes in the USF plan, largely benefiting the largest traditional phone companies in the country, which at present have double the access to funding than they had before those changes. Smaller traditional and wireless carriers were given reduced access to support going forward, which ways that unless the FCC makes future changes, the country will depend in large measure on 2 carriers to carry out broadband deployment and ongoing operations in rural areas in the future, and in very rural areas of the country, service may diminish.

Waste product and fraud [edit]

The result of waste and fraud, as with many government programs, has been addressed as well. Gilroy stated, "The ability to ensure that only eligible services are funded, that funding is disbursed at the proper level of disbelieve, that alleged services have been received, and the integrity of the competitive bidding process is upheld have been questioned". Improved auditing of especially the East-rate plan has been addressed.[73]

There have been multiple cases of waste and fraud throughout disbursement of subsidies from the Universal Service Fund. There is some concern on the lag fourth dimension between application, approval, and actual receipt of funds.[74] In terms of fraud, some school officials have been bribed by contractors working with corporations so that they utilise subsidies to purchase computer equipment from said corporation.[74] In addition, some beneficiaries inaccurately report costs to inflate their subsidies amount. In terms of waste, some equipment subsidized by the USF has been left unused for several years.[74]

An investigation into potential fraud in 2004 revealed that contractors working with Hewlett-Packard bribed school officials. Hewlett-Packard wanted the schools to employ subsidies provided by the fund to buy computer equipment from Hewlett-Packard. The 2nd example of fraud was when "Sandwich Isles Communication purposely inflated and inaccurately reported money to receive inflated subsidies."[75]

Critics continue to enhance concerns in regards to the wastefulness of the fund. For case, "$five 1000000 worth of equipment purchased by Chicago public schools with E-rate funds was left unused in a warehouse for years." Lastly, a problem that has plagued the program is the long lag time between the overall application of the programs and the approval.[74]

The FCC has responded to issues of waste and fraud in the USF. In an attempt to combat them, the FCC conducted an investigation into the Lifeline program which revealed "serious weaknesses in federal safeguards, allowing providers to indiscriminately override checks that are supposed to preclude wasteful and fraudulent activities."[76] Equally a result, Ajit Pai, current FCC commissioner withdrew some Lifeline subsidies "to come up with a improve manner to vet them for potential waste, fraud and abuse."[76] Pai argued that information technology is necessary to halt some funds towards programs riddled with fraud because "putting the designations on agree gives the FCC the chance to brand sure the process is legally defensible and to avert potentially stranding customers if the courts ultimately deem the process unlawful".[76]

In early 2018, the FCC Chairman Ajit Pai proposed a plan to calibration back the USF'southward Lifeline programme.[77] Pai claimed the proposed cutbacks would encourage business organisation investment in low income communities, reducing the need for the regime spending on the program.[78] Pai also referenced the fraud that surrounds the usage of the program every bit a reason to scale back Lifeline. If passed and put into effect, this cutback would end Lifeline access for 8 million people, which accounts for nearly 70% of the programme's recipients. In the American territory of Puerto Rico, this would interpret to nigh 17% of its population that would lose admission.[79]

Nine U.S. Senators issued a joint letter opposing the cutbacks, contending that, "The Lifeline Programme is essential for millions of Americans who rely on subsidized internet access to find jobs, schedule dr.'southward appointments, complete their school assignments, interface with the authorities, and remain connected in a digital economy."[80] The FCC must at present make up one's mind between the high cost and the USF'due south goal for "universal access" with this program.

This cut to the Lifeline programme prevents other smaller companies known as resellers from "buying network capacity from big telecom providers and so selling it back to low-income consumers at cheaper rates."[79] This is problematic for the majority of Lifeline customers who rely on those cheaper rates.

The current assistants looks to exist opposed to this program as they feels it is wasteful of taxpayer money. Since 2017, there has been a 21% subtract in the number of people being assisted by this program. In 2017 merely under 11 1000000 people were existence assisted whereas now in 2019, slightly nether 9 meg people are receiving assist. Information technology is estimated 2.3 1000000 people are no longer enrolled in this plan.[81]

The USF has some issues in dealing with insufficient controls over determining who qualifies for funding, and limited auditing practices that are supposed to ensure that telecommunication companies are non overpaying or underpaying their ante to the fund.[82]

The USF is able to reward those living in rural or impoverished areas who are capable of paying the entire cost of personal telecommunication services. Critics fence that inconsistent and asymmetrical audits permit for wealthy consumers to avoid triggering some USF financial burdens.[83] Wealthy landowners in rural estates decide to employ USF subsidies and pay a fraction of what they can realistically afford.[84]

Critics notation that reimbursing carriers on a "'cost-plus' basis" creates "incentives to increase rather than decreas[due east] costs" By reimbursing "carriers for the full cost of infrastructure development plus 11.25 percent of those costs in turn a profit," the fund may betrayal itself to exploitation.[85]

Concerns about 2018 changes [edit]

In May 2018, the FCC moved $8 billion from a individual bank to the The states Treasury. This anticipated motility caused an uproar from FCC Democratic commissioners who were concerned about the money being allocated to big corporations instead of the citizens. FCC commissioner, Jessica Rosenworcel stated that this move "sacrificed $50 million in almanac interest that could take been used to back up rural broadband, telemedicine & net in schools."[86] Although lawmakers and commissioners claimed that this move was unexpected, there was a letter previously written to the General Accountability Office (GAO) in January 2018 request for a review on the plan to review the funds. The GAO claimed that the USF funds are not regulated as intensively as other government funds, and then this move was an attempt to "improve direction and oversight of the funds."[87]

Afterward the 2018 USF changes, VoIP service providers are now required to provide funds for the USF. For instance, Vonage must accuse an additional 10.10% fee.[88] Nonetheless, they are exempt from the cost of using the Internet for information transport whereas DSL internet providers and modern cable services must burden the cost. This expands cost distortion to long-distance telephone providers and it raises the cost of telecommunications service for more consumers.[seventy]

On May 21, the FCC issued an order that prohibited USF programs from buying equipment from Chinese telecommunications companies Huawei and ZTE. These companies are considered a risk to national security by American intelligence agencies. National Economic Council Director Larry Kudlow commented that the Trump Administration are ¨aware of security issues, sanctions issues, engineering science theft issues, et cetera.¨[89]

Failing revenues [edit]

The rapidly irresolute interstate and international telecommunication markets can quickly and unpredictably bring virtually changes in USF funding levels. Dorothy Attwood of the FCC Wireline Competition Agency stated, "One hitting evolution that nosotros've witnessed in the interstate market place is the steady decline of interstate revenues. Although traditional long-distance revenues grew consistently between 1984 and 1997, they're now in a period of steady reject". She pointed out that contest in the interstate long-distance market, wireless commutation, and bundling of service packages that blur traditional service categories are all reducing revenues that serve to finance the USF.[90] Service providers simply transferred the cost to customers in the course of a long-distance surcharge to make upwardly for reduced revenue. While the expenditures of the USF have increased since its inception, in part due to expansion of support paid to competitive providers, the revenues on which contributions are fabricated – interstate and international telecommunication revenues – have become increasingly more difficult for contributors to identify as a result of evolution of services offered. Overall revenues reported by telecommunications companies take steadily increased, if data service revenues are included. However, the revenues for these services are no longer subject to contribution.

Proposed reform [edit]

Expanding revenue sources [edit]

Debate over the Universal Service Fund has consistently involved the telescopic of the funding, which technology types and companies should fund the plan, which groups should be eligible for benefits, and the demand to clean upwardly waste matter and fraud in the program. Proposals have been made to increment the number of sources from which universal service fund is nerveless. This could include expanding contributions to include intrastate telephone services (calls within single states), vox over IP (figurer-to-calculator calls), and data services such as broadband, and increasing contribution requirements from wireless communication providers.

Failed legislation [edit]

A typhoon proposal of the Telecommunications Act of 2005 was the bailiwick of hearings in Congress. The proposal outlined a pregnant restructuring of the Telecommunication Deed of 1996, ultimately the House of Representatives passed a neb, the Communications Opportunity, Promotion, and Enhancement Act of 2006 (COPE – H.R.5252.RS, S.2686).[91] The bill was sent from the House to the Senate, where subsequent readings left it awaiting a legislative action. Under the proposed restructuring of the Telecommunications Act of 1996, greater emphasis on the wide availability of broadband and mobile access would exist considered. Additionally, consideration of acquirement contribution to the Universal Service Fund would be radically revised, given that the creation of obligatory broadband and mobile communication access would crave a wide range of broadband, mobile, and Voice over Cyberspace Protocol (VoIP) service providers to contribute a portion of their acquirement to the fund. Lastly, the Act urged an FCC consideration of the universal service construction. The pecker was not passed.

In January 2007, Senator Ted Stevens (R-AK) sponsored a nib (the Universal Service for Americans Act) that would increase universal service tax base to include broadband ISPs and VoIP providers, to fund broadband deployment in rural and low-income regions of the country. This nib was referred to commission, but as no farther activeness was taken on it by the 110th Congress, the bill never became law.[92] Since then the only congressional activity has been H.R. 176, introduced by Congressman Bob Latta (R-OH) on February 13, 2009, which states that, "in order to continue aggressive growth in our Nation'south telecommunication and technology industries, the United States Government should 'Leave of the Manner and Stay Out of the Way'." The bill died in committee.[93]

On July 22, 2010, the Universal Service Reform Human action of 2010 was introduced by Representatives Boucher (D-Va) and Terry (R-NE). The mensurate is intended to improve and modernize the USF past reining in the size of the fund and promoting broadband deployment.[94]

Supporting natural monopolies [edit]

The condition quo only benefits powerful telecommunications companies. In the interest of reducing waste material, limited support to a monopoly universal service provider for each territory has been considered. Wireless engineering is increasingly favored by consumers, and can cover a single territory frequently for less than landline technology. However, wireless has traditionally been a competitive industry, which has resulted in a variety of innovative services for consumers, simply means that supporting wireless companies requires a circuitous understanding of how to allocate funding on a shared basis, in order to avoid injury to the positive forces of competition.[ citation needed ]

Expanding rural broadband [edit]

In March 2016, the FCC unanimously voted to provide $20 billion over the next ten years in "support for small carriers." The previous FCC chairman Tom Wheeler nether the Obama Assistants implemented this reform. The FCC volition be offer the fund $20 billion over the next 10 years to support service in "high price areas." This reform is a modernization of the programme support of broadband in "high cost areas." It will target communities that near need support. Reformation of the Lifeline plan included minimum service requirement standards implemented to ensure that consumers benefited the almost from the plan. Pai and the proponents of the upkeep cuts merits that the Lifeline program is being driveling by resellers challenge that some recipients listed in the databases are deceased or do not exist.[95] Pai's hope is that this budget cut will stimulate the free market place and let existing broadband networks to expand their infrastructure into the rural areas. These small carriers are also known as "rate-of-render" carriers; these carriers have made pregnant progress in recent years but many however practice non have access to "terrestrial fixed broadband." The reform is fabricated up of iii main elements: "Modernizes Existing Universal Service Plan for Rate-of-Return Carriers", "Create 2 Paths to a 'Connect America Fund' for Rate-of Return Carriers" and "Increment Fiscal Responsibleness in the Universal Service Fund."[96]

In 2017, new FCC chairman nether the Trump Administration, Ajit Varadaraj Pai, plans to keep rural areas a priority. He wants to span "the digital divide between rural and urban areas" by working on "expanding broadband options". Pai believes that at that place is waste matter occurring between the private and public sectors every bit individual majuscule is already being given to areas in order to build out networks. However, some of these areas are even so being subsidized. Pai intends to make sure that broadband accessibility is included in an infrastructure neb to come.[97] This conclusion from Pai is reducing the touch on of the Lifeline program, some even speculating that he may somewhen dismantle the entire programme.[98]

Out of the four USF programs, the Lifeline program is currently the merely one without a strict budget cap. Lifeline tin can become over its current upkeep as long as the FCC provides a reason equally to why they need to spend more coin. This allows the FCC to subsidize advice services to people with low income. Every bit stated higher up, this will most probable change as the FCC is reviewing Pai'southward proposal on November 16, 2017 to set a upkeep cap on the Lifeline program.[99]

Meet also [edit]

  • E-Charge per unit
  • National broadband plans from around the globe
  • Rural electrification
  • National Exchange Carrier Clan

References [edit]

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External links [edit]

  • FCC website
  • Universal Access (Costless Press)
  • Universal Service Authoritative Company
    • About the USAC
    • Schools & Libraries
    • High Cost
    • Low Income
    • Rural Healthcare
  • Commission on Energy and Commerce

1. What Section Of The Usc Deals Primarily With Universal Service?,

Source: https://en.wikipedia.org/wiki/Universal_Service_Fund

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