The Universal Service Fund (USF) has been a cornerstone of American telecommunications policy, ensuring that everyone—especially in rural or underserved areas—has access to essential communication services. NCTNA’S broadband discounts are funded by the FCC’s Healthcare Connect Fund, which falls under the USF’s Rural Health Care program. But recently, the USF has been facing some legal challenges that could reshape its future. So, what’s going on with the USF, and how could it affect you?
A QUICK REFRESHER
WHAT IS THE USF?
The USF was established to support affordable telecommunications for everyone, including rural communities, low-income households, schools, libraries, and healthcare facilities. The USF’s Rural Health Care Program encompasses the funding mechanism responsible for NCTNA’s (and hundreds of other organizations’) broadband discounts. It’s funded by contributions from telecommunications companies, which are usually passed on to consumers in the form of small fees on phone bills.
Over the years, the focus of the USF has shifted from traditional phone services to modern broadband internet, helping to bridge the digital divide. However, its funding model—relying on revenue from phone services—has come under pressure as fewer people use landlines and rely more on the internet. Although there have been efforts to modernize the fund, it is a very politically charged issue since no organization or participant wants to take on a new fee. For more information on USF Contribution Reform, see the USForward report that was commissioned by the Schools, Health & Libraries Broadband Coalition (SHLB) in 2021 (Click here for the full report).
THE 5TH CIRCUIT COURT RULING
In September 2023, the 5th Circuit Court of Appeals made a major ruling regarding the USF’s funding structure. The court found that the way the Federal Communications Commission (FCC) delegates the authority to the Universal Service Administrative Company (USAC) to collect and distribute USF funds might not be in line with the Constitution’s non-delegation doctrine. This doctrine requires that Congress, not an agency, make critical policy decisions.
The court didn’t shut down the USF, but it did raise questions about whether the current system is operating under proper legal authority. This has created uncertainty about the future of the fund and could lead to changes in how it’s managed.
WHAT’S NEXT FOR THE USF?
The ruling doesn’t immediately halt the USF, so its important programs—like supporting rural broadband and helping low-income families stay connected—are still running. However, there’s now a legal cloud over its funding system. The FCC may need to revise its approach to how the USF is administered and could require action from Congress to clarify or reshape the rules.
In the meantime, there’s a growing push to modernize the USF to better align with the digital age. Ideas like expanding the contribution base to include broadband internet services (rather than just phone services) are gaining traction. This would not only ensure the fund remains viable but also reflects how we communicate today.
NCTNA’S FOCUS
As a well established telehealth consortium, NCTNA has years of experience working with the program administrator (USAC) and the FCC. With the support of our members, and members of the Schools, Health & Libraries Broadband Coalition, NCTNA will continue to push for program modernization and reform in a way that supports longevity and sustainability for the USF. We have also begun developing relationships with legislators and key leaders of various congressional sub-committees that have broadband and USF oversight in an effort to share our member impact stories that highlight the importance of the USF programs, especially the Healthcare Connect Fund.
During a recent trip to Washington D.C., NCTNA’s President, Dr. John Graham, and Director of Relationship Marketing, Jordan Rogers, had the opportunity to meet with Senator Ted Budd and Representative Richard Hudson’s staff to discuss the state of the USF and the impact of the Healthcare Connect Funding.
WHAT DOES THIS MEAN FOR YOU?
For now, you likely won’t notice any immediate changes and Healthcare Connect Fund discounts will continue. If the USF’s funding model is overhauled, you could see changes in how the USF fee is applied to your phone or internet bills. And in the longer term, any adjustments will hopefully improve the fund’s ability to keep pace with modern technology and ensure that no one is left behind in the digital age.
In short, the USF is in a period of transition, but its mission remains the same: making sure that everyone has access to the communications tools they need to thrive. Stay tuned for more updates as the legal and regulatory processes unfold!
COULD YOUR ORGANIZATION BENEFIT FROM NCTNA’S BEST IN CLASS BROADBAND CONNECTIVITY SERVICES? REACH OUT TO US TODAY!
If you’re interested in learning more about the NC Telehealth Network Association, and/or receiving a free, no-obligation quote for our broadband connectivity services, please reach out today to set up an introductory call!
Jordan Rogers
Director of Relationship Marketing
Jordan.Rogers@NCTNA.org
