The FCC’s Universal Service Fund (USF) has survived a Supreme Court challenge by a right wing activist nonprofit, but the program – which for decades has helped extend broadband to underserved rural homes and schools – still faces a precarious immediate future.

It is a peculiar political story, given that the rural regions that overwhelmingly vote for Republicans are now seeing Republicans try to dismantle a program that has been crucial for rural investment and development.

The FCC established the fund in 1997 in compliance with the Telecommunications Act of 1996. Historically a program with broad, bipartisan support, the USF leverages around $8 billion annually to expand broadband access to rural communities, libraries, and schools. The program is primarily paid for by consumers via a small levy on traditional phone lines.

In 2023, a right wing activist nonprofit named “Consumer’s Research” sued the government over the USF, claiming that the FCC lacked the constitutional authority to levy a fee on consumers’ bills. The lawsuit claimed that the USF depended on what amounted to an “unconstitutional tax” on consumers to fund operations.

If you missed our Building for Digital Equity “Wired for Freedom” Livestream, you can watch it in its entirety on YouTube.

Earlier this week, the second UTOPIA Fiber-sponsored event of the year, hosted in partnership with the National Digital Inclusion Alliance (NDIA), brought together community-based digital inclusion practitioners and policy experts to talk about the road ahead for expanding broadband access amid a rapidly shifting political landscape.

After a blues-infused beginning with Sky Downing of digitalLIFT, NDIA’s policy director Amy Huffman provided attendees with an update on the long court battle over the constitutionality of the FCC’s Universal Services Fund.

The recent Supreme Court ruling, Huffman explained, ruled that the program – which supports connectivity for rural communities, schools, and libraries – was indeed constitutional. In what Huffman described as “good news,” she also said it would give Congress a chance to reform USF without having to do so as “a ticking time,” giving lawmakers and advocates a chance to “put together a thoughtful framework and path forward to ensure that the fund not only continues but is modernized.”

In the lightning round presentations, Sara Nichols from the Land of Sky Regional Council in western North Carolina spoke of the work her planning agency has been involved with working toward building resilient connectivity in the wake of Hurricane Helene followed by Kaala Souza, executive director of Digital Ready Hawaii, who discussed how digital literacy was rooted in the local culture’s emphasis on literacy dating that dates back before the dawn of the computer age.

Congressional Republicans are moving forward on a plan to kill a popular Federal Communications Commission (FCC) program providing free Wi-Fi to schoolchildren. Critics of the repeal say it’s a “cruel” effort that will undermine initiatives to bridge the affordability and access gap for families long stuck on the wrong side of the digital divide.

The effort, spearheaded by Texas Republican Senator Ted Cruz, leverages the Congressional Review Act to roll back FCC changes to E-Rate, a government program that helps subsidize deployment of broadband access to rural communities, libraries, and schools.

Accelerated by the remote education boom of pandemic lockdowns, communities country wide had petitioned the FCC to expand the program. The goal: allowing rural schools to leverage E-Rate funding to provide free mobile Wi-Fi hotspots to families that either couldn’t afford broadband – or found broadband entirely out of reach.

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So in July 2024 the FCC voted to expand the program. Historically, E-Rate could only be used to improve access on school or library grounds. The expansion allowed schools to provide limited access to free Wi-Fi hotspots via school buses or other alternatives. The expansion did not involve an increase in the E-Rate budget or any new taxes on U.S. residents. It recognized that the concept of “school” had eclipsed the 20th century definition of a room in a community building.

“I believe every library and every school library in this country should be able to loan out Wi-Fi hotspots to help keep their patrons and kids connected,” former FCC boss Jessica Rosenwocel said when the reforms were announced. “It is 2024 in the United States. This should be our baseline. We can use the E-Rate program to make it happen.”

In the wake of the election, and with potential major changes ahead for the national "Internet For All" effort, many in the broadband world are wondering: where do we go from here?

That's what the next Building For Digital Equity (#B4DE) livestream event seeks to answer, inviting you to wear your ugly sweater, join the free virtual gathering, and dive into what a post-Biden administration broadband world may look like.

Slated for December 16, 2024 from 3 to 4:15 PM ET, the "Reflect, Recharge, Reach Forward" themed livestream promises to offer penetrating insights and practical ideas on the way forward.

Registration is now open here.

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Co-hosted by Institute for Local Self Reliance (ILSR) Community Broadband Networks Initiative and the National Digital Inclusion Alliance (NDIA), the popular (and free) online event will feature two prominent figures in this space: NDIA Executive Director Angela Siefer and New Street Research Policy Advisor Blair Levin.

Now that the election has been settled, many in the broadband space are wondering what, if anything, will change with the incoming Trump administration.

Of course no one has a crystal ball, but there are a number of telecommunication policy developments we will be tracking, which include numerous fronts where there will likely be changes.

What those changes will be exactly will only become apparent sometime next year.

BEAD and DEA

The BEAD (Broadband Equity, Access, and Deployment) program and Digital Equity Act (DEA) programs are at the center of the universe in the national effort to ensure everyone has high-speed access to the Internet.

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However, in the run-up to the election, GOP leaders were highly critical of the BEAD program, saying it was taking too long to dispense funds to build new networks, questioned the NTIA favoring the building of fiber networks, and criticized aspects of the effort they consider to be a waste of taxpayer dollars.

Blueprints for BEAD is a series of short notes and analysis on nuances of BEAD that might otherwise get lost in the volume of material published on this federal funding program. Click the “Blueprints for BEAD” tag at the bottom of this story for other posts.

Few people dispute the vital importance of affordability in closing the digital divide. A 2021 Pew Research Center survey found that nearly half of all people without broadband cited cost as a barrier, with 20 percent listing cost as the primary reason for not subscribing to broadband service.

Research from EducationSuperHighway pegged that number even higher, estimating that lack of affordability explained about two thirds of the remaining digital divide in the country.

As the Broadband Equity, Access, and Deployment (BEAD) program steams ahead, questions about affordability have come to the fore. After all, deploying tens of thousands of miles of new fiber is only half the equation. BEAD will help build the physical networks necessary to connect the millions of households that still lack access to high-speed Internet service, but will it make a difference if they still can’t afford a plan? This possibility is all the more likely in light of the Affordability Connectivity Program’s (ACP) untimely demise.

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BEAD’s low-cost plan requirement sought to ease such concerns about affordability. To ensure households with limited financial means would actually see the benefits of the program’s massive infrastructure investment, this requirement mandated that all networks built using BEAD funds offer a low-cost plan for eligible subscribers.

On July 24, 2024, the Fifth Circuit Court of Appeals ruled 9-7 that the Universal Service Fund is unconstitutional. 

The decision throws a whole raft of federal broadband programs - including those which help schools pay for connectivity, those which help homes pay for home Internet access, and more - into a state of uncertainty. 

All signs point to a stop at the Supreme Court for final ruling on the future of the program. On the most recent episode of the Connect This! Show, hosts Christopher Mitchell (ILSR) and Travis Carter (USI Fiber) were joined by regular guests Doug Dawson (CCG Consulting) and Kim McKinley (UTOPIA Fiber) as well as special guest Casey Lide (Keller and Heckman Law Firm) to talk about the decision. They discuss the impact of the decision in the long-term, including how the USF fits into the jigsaw puzzle of federal broadband funding programs and what we can expect to see if the decision is upheld. 

Watch the segment below.

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