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Universal Service

Universal service is the principle that all Americans should have access to communications services. Universal service is also the name of a fund and the category of FCC programs and policies to implement this principle.  Universal service is a cornerstone of the law that established the FCC, the Communications Act of 1934. Since that time, universal service policies have helped make telephone service ubiquitous, even in remote rural areas. Today, the FCC recognizes high-speed Internet as the 21st Century’s essential communications technology, and is working to make broadband as ubiquitous as voice, while continuing to support voice service.

The Telecommunications Act of 1996 expanded the traditional goal of universal service to include increased access to both telecommunications and advanced services – such as high-speed Internet – for all consumers at just, reasonable and affordable rates. The Act established principles for universal service that specifically focused on increasing access to evolving services for consumers living in rural and insular areas, and for consumers with low-incomes.  Additional principles called for increased access to high-speed Internet in the nation’s schools, libraries and rural health care facilities.  The FCC established four programs within the Universal Service Fund to implement the statute.  The four programs are:

The Universal Service Fund is paid for by contributions from telecommunications carriers, including wireline and wireless companies, and interconnected Voice over Internet Protocol (VoIP) providers, including cable companies that provide voice service, based on an assessment on their interstate and international end-user revenues. The Universal Service Administrative Company, or USAC, administers the four programs and collects monies for the Universal Service Fund under the direction of the FCC.  The FCC’s annual monitoring report tracks contributions and disbursements.

The FCC is reforming, streamlining, and modernizing all of its universal service programs to drive further investment in and access to 21st century broadband and voice services. These efforts are focused on targeting support for broadband expansion and adoption as well as improving efficiency and eliminating waste in the programs.

HISTORY OF UNIVERSAL SERVICE AND THE UNIVERSAL SERVICE FUND

The Federal Communications Commission was created by the Communications Act of 1934. Universal service was one of the core mandates of that legislation whose purpose included making “available…to all the people of the United States…a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.

In 1934, telephone service was considered to be a “natural monopoly,” a service best delivered by one company rather than two or more competitors.  The U.S. government allowed AT&T, then the monopoly provider, to operate in a non-competitive environment in most areas of the country in exchange for the federal and state government regulation of price and service quality. In areas that AT&;T did not serve, small companies, including cooperatives owned by residents of the local community, provided phone service. The concept of universal service evolved over the decades to mean the development of an infrastructure that provides telephone service to all consumers at a reasonable price. Funding for universal service came from a series of access charges that long distance carriers paid as intercarrier compensation (ICC) to local exchange companies for originating and terminating the long distance calls. Even after the breakup of AT&T in 1982, only interstate long distance companies were required to contribute funds towards universal service.

The Telecommunications Act of 1996 was the first major re-write of the Communications Act of 1934. It opened up local markets to competition, which changed the dynamics of the existing system of funding universal service. The 1996 Act explicitly adopted principles to guide universal service policy. These include to:

  • Promote the availability of quality services at just, reasonable and affordable rates for all consumers
  • Increase nationwide access to advanced telecommunications services
  • Advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in urban areas
  • Increase access to telecommunications 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

In addition, the Telecommunications Act of 1996 directed the FCC to formalize what services a company must provide in order to receive funds. For example, an eligible telecommunications company must be able to demonstrate its ability to remain functional in emergency situations. The Act also expanded the universe of companies required to pay into the fund from only interstate long-distance carriers to include all telecommunications carriers (regardless of whether they are wireline, wireless or satellite companies). The Telecommunications Act of 1996 led to the creation of the Universal Service Administrative Company, or USAC, an independent, not-for-profit corporation designated as the administrator of the federal Universal Service Fund by the FCC. The Act also called for the creation of a Federal-State Joint Board on Universal Service to make recommendations to implement the universal service provisions of the Act. This Joint Board is comprised of FCC Commissioners, State Utility Commissioners, and a consumer advocate representative.

The Universal Service Fund provides support through four programs:

  • High-Cost Support (now known as the Connect America Fund) provides support to certain qualifying telephone companies that serve high-cost areas, thereby ensuring that the residents of these regions have access to reasonably comparable service at rates reasonably comparable to urban areas
  • Low-Income Support, also called the Lifeline program, assists low-income customers by helping to pay for monthly telephone charges so that telephone service is more affordable
  • Schools and Libraries Support, also known as the "E-Rate," provides telecommunication services (e.g., local and long-distance calling, both fixed and mobile, high-speed data transmission lines), Internet access, and internal connections (the equipment that delivers these services to particular locations) to eligible schools and libraries
  • Rural Health Care Support allows rural health care providers to pay rates for telecommunications services similar to those of their urban counterparts, making telehealth services affordable, and also subsidizes Internet access

In early 2009, Congress directed the FCC to develop a National Broadband Plan to ensure every American has “access to broadband capability. The plan was released in March of 2010. The plan highlighted ways that the government could influence the broadband ecosystem including to “reform current universal service mechanisms to support the deployment of broadband and voice in high-cost areas; and ensure that low-income Americans can afford broadband; and in addition, support efforts to boost adoption and utilization.”

Consistent with the National Broadband Plan, in February 2011, the FCC issued a Notice of Proposed Rulemaking to comprehensively reform and modernize the universal service High-Cost program and intercarrier compensation systems to ensure that robust affordable voice and broadband service, both fixed and mobile, are available to Americans throughout the nation. The rulemaking process was guided by four principles rooted in the Communications Act of 1934and the Telecommunications Act of 1996:

  • Modernize USF and ICC for Broadband.  Modernize and refocus USF and ICC to make affordable broadband available to all Americans and accelerate the transition from circuit-switched to IP networks, with voice ultimately one of many applications running over fixed and mobile broadband networks
  • Fiscal Responsibility.  Control the size of USF as it transitions to support broadband, including by reducing waste and inefficiency
  • Accountability. Require accountability from companies receiving support to ensure that public investments are used wisely to deliver intended results. Government must also be accountable for the administration of USF, including through clear goals and performance metrics for the program
  • Incentive-Based Policies. Transition to incentive-based policies that encourage technologies and services that maximize the value of scarce program resources and the benefits to all consumers

In October 2011, the Commission adopted its first rulemaking decision to implement these principles informally called the “USF/ICC Transformation Order.” The Commission established the following goals:

  • Preserve and advance voice service
  • Ensure universal availability of voice and broadband to homes, businesses and community anchor institutions
  • Ensure the availability of mobile voice, and broadband where Americans live, work or travel
  • Ensure reasonably comparable rates for broadband and voice service
  • Minimize universal contribution burden on consumers and businesses

One of the key elements of the Order was to expand the public interest obligations for eligible telecommunication carriers to deploy infrastructure that can provide broadband service in addition to voice service. In addition, the Order created the “Connect America Fund” to replace all existing high-cost support mechanisms. One of the goals of the Connect America Fund is to extend broadband to those Americans that lack service today, while preserving voice service. Another one of the goals of the Connect America Fund is to help make advanced mobile services – including mobile voice and broadband – available in areas that would not otherwise have those services. Implementation of this goal will be through incentive-based, market driven policies such as phase one of the Mobility Fund which uses a competitive bidding process to help expand 3G and 4 G mobile wireless networks in areas where it would be cost effective to develop with a one-time investment from the Connect America Fund.

2014 Universal Service Headlines

April

  • 4/18/2014
    FCC Form 471 Public Notice: : Provides notice of request to access information submitted by E-rate applicants in FCC Form 471 Item 21, as well as FRN-level data created by USAC PIA review classifications based on predominant service or product requested; establishes opposition date.
    Word PDF
  • 4/17/2014
    Connect America Fund Public Notice: : Announced availability of version 4.1.1 of the Connect America Cost Model.
    Word PDF
  • 4/14/2014
    E-Rate Workshop Public Notice: : FCC Announces May 6 E-rate Modernization Workshop.
    Word PDF
  • 4/2/2014
    Lifeline Biennial Audit Plan Public Notice: : Announces release of the final Lifeline Biennial Audit Plan, as directed in the Lifeline Reform Order.
    Word PDF Table 1 Table 2 Table 3

March

  • 4/8/2014
    CenturyLink Public Notice: Seeks comment on a January 2014 decision by the Universal Service Administrative Company denying CPCI’s request to offset additional contribution obligations resulting from an audit of CPCI’s 2012 FCC Form 499-A.
    Word PDF
  • 3/28/2014
    2014 E-Rate Funding Cap Public Notice: : Announced that the E-rate program funding cap for funding year 2014 is $2,413,817,693, representing a 1.4% inflation-adjusted increase from the funding year 2013 cap.
    Word PDF
  • 3/27/2014
    Cordova Wireless Communications and MTA Wireless/Matanuska-Kenai Order: : Granted petitions filed by Cordova Wireless Communications, LLC and MTA Communications, LLC d/b/a MTA Wireless/Matanuska-Kenai, Inc. for waiver of certain rules pertaining to the high-cost universal service support program.
    Word PDF
  • 3/24/2014
    Beaufort County School District, Beaufort, SC, et al: : Granted four requests for review of Universal Service Administrative Company (USAC) decisions under the E-rate program.
    Word PDF
  • 3/24/2014
    Dulce School District, Dulce, NM, et al: : Granted two requests for review of Universal Service Administrative Company (USAC) decisions under the E-rate program.
    Word PDF
  • 3/21/2014
    Connect America Model v.4.1 Public Notice: : Announced availability of version 4.1 of the Connect America Cost Model.
    Word PDF
  • 3/21/2014
    Connect America Phase I Round 2 Reconsideration Order: : Granted a petition for partial reconsideration filed by Farmers Telephone Company of a determination in the Connect America Phase I challenge process.
    Word PDF
  • 3/20/2014
    Urban Rates Survey Public Notice: Announced the results of the urban rate survey for fixed voice services, and sought comment on a petition to extend the deadline for compliance with the 2014 rate floor.
    Word PDF
  • 3/19/2014
    Glendale School District, Flinton, PA: Granted an appeal filed by Last Mile, Inc., d/b/a Sting Communications, of, and denied a request by Glendale School District for waiver of the filing deadline to appeal, decisions of the Universal Service Administrative Company under the E-rate program.
    Word PDF
  • 3/18/2014
    Rural Broadband Workshop Final Agenda Public Notice: Final agenda for March 19, 2014 Rural Broadband workshop at FCC Headquarters.
    Word PDF
  • 3/14/2014
    AT&T/Windstream Phase I Modifications Authorization Public Notice: Authorizes over $16.7 million in additional Phase I second round incremental support in response to the modified elections of AT&T and Windstream.
    Word PDF
  • 3/12/2014
    Boulevard Nursery School, Brooklyn, NY, et al.: Granted three and denied nine requests for waiver and review of Universal Service Administrative Company decisions under the E-rate program.
    Word PDF
  • 3/12/2014
    Central Islip Union Free School District, Central Islip, NY/Jennings School District, Jennings, MO: Granted two requests for review of Universal Service Administrative Company decisions under the E-rate program.
    Word PDF
  • 3/12/2014
    Coaxial Cable Television Public Notice: Seeks comment on a January 2014 decision by the Universal Service Administrative Company rejecting revisions to Coaxial’s 2011 and 2012 Forms 499-A.
    Word PDF
  • 3/11/2014
    IHS/White Swan Appeal Order: Denied IHS/White Swan’s request for review of a decision of the Universal Service Administrative Company under the Rural Health Care Program.
    Word PDF
  • 3/7/2014
    Rural Broadband Workshop Agenda Public Notice: Announces agenda for March 19 Rural Broadband Workshop.
    Word PDF
  • 3/7/2014
    FY 2014 PIA Approval Letter to USAC: Wireline Competition Bureau approves the E-rate Funding Year 2014 PIA FCC Form 471 Review Procedures, subject to further Commission modification of application prioritization.
    Word PDF
  • 3/6/2014
    E-Rate Modernization Focused Comment Public Notice: Seeks focused comment on three issues raised in the E-rate Modernization NPRM that merit further inquiry as the Commission moves towards modernizing the E-rate program to meet schools’ and libraries’ broadband connectivity needs.
    Word PDF
  • 3/5/2014
    USAC Recertification Public Notice: Provides guidance to ETCs regarding the process to elect the Universal Service Administrative Company to perform the recertification of ETCs’ lifeline subscribers in 2014.
    Word PDF

February

  • 2/28/2014
    Adak Eagle Enterprises, LLC and Windy City Cellular, LLC Further Extension Order: The Wireless Telecommunications Bureau and the Wireline Competition Bureau extend further limited, interim fixed support in the amount of $33,276 for AEE and $40,104 for WCC monthly, beginning February 2014, for, whichever comes first, a period of no longer than six months or until the Bureaus and/or the Commission complete review of the companies’ Petition for Reconsideration and/or Application for Review.
    Word PDF
  • 2/27/2014
    Rural Broadband Workshop Public Notice: Announced, per the Technology Transitions Order, a Rural Broadband Workshop to be held on Wednesday, March 19, 2014 in the Commission Meeting Room.
    Word PDF
  • 2/24/2014
    Boston Renaissance School, Boston, MA et al.: Granted requests of 17 applicants, and denied requests of 17 applicants, seeking review of Universal Service Administrative Company decisions, and dismissed two petitions for reconsideration of Wireline Competition Bureau orders, under the E-rate program.
    Word PDF
  • 2/24/2014
    Dismissing Waiver Deadline Petitions Public Notice: Dismissed four petitions for waiver of various high-cost universal service filing deadline, where petitioners did not, in response to a Public Notice, express to the Commission continuing intent to pursue their petitions.
    Word PDF
  • 2/21/2014
    Ben Gamla Palm Beach, Boynton Beach, FL et al.: Granted 9 requests for review of Universal Service Administrative Company decisions under the E-rate program.
    Word PDF
  • 2/20/2014
    Annunciation Elementary School, Denver, CO et al.: Denied 15 requests for review or waiver of Universal Service Administrative Company decisions, and dismissed two petitions for reconsideration of a Wireline Competition Bureau order, under the E-rate program.
    Word PDF
  • 2/20/2014
    Skilled Nursing Facility Program Public Notice: Deferral of the Skilled Nursing Facility Pilot Program pending the Commission’s consideration of healthcare related proposals in WC Docket No. 10-90.
    Word PDF
  • 2/18/2014
    NTUA Wireless, Inc. ETC Designation Order: : Conditionally designated NTUA Wireless as an ETC on the Navajo Nation for areas in which eligible for support in Tribal Mobility Fund Phase I (TMF I); otherwise designated it as eligible for Lifeline-only support on Navajo Nation where not receiving TMF I.
    Word PDF
  • 2/7/2014
    Joint Board Appointments Order: Appointed the Honorable Stephen Michael Bloom and the Honorable Chris Nelson to serve on the Federal-State Joint Board on Universal Service, and the Honorable Sally Talberg to serve on the Federal-State Joint Board on Jurisdictional Separations.
    Word PDF
  • 2/6/2014
    Census Tracts Public Notice: Released a list of census tracts in price cap areas potentially suitable for targeted technology transitions experiments, with associated potential support amounts, based on Connect America Cost Model v4.0..
    Word PDF
  • 2/6/2014
    Connect America Model v4.0 Illustrative Maps Public Notice: Released maps of illustrative results for Connect America Cost Model Version 4.0.
    Word PDF

January

  • 1/31/2014
    2014 Telecommunications Reporting Worksheets Public Notice: Release of 2014 FCC Forms 499 and accompanying instructions.
    Word PDF 2014 FCC Form 499-A 2014 FCC Form 499-Q
  • 1/31/2014
    TracFone Petition for Waiver Public Notice: Seeks comment on TracFone’s petition for waiver of certain Lifeline rules prohibiting the retention of eligibility documentation.
    Word PDF
  • 1/31/2014
    Grande Contributions Order: Granted in part Grande’s request for review of a 2009 audit decision of Grande’s 2005, 2006 and 2007 FCC Forms 499-A by the Universal Service Administrative Company.
    Word PDF
  • 1/23/2014
    E-Rate Second Level Protective Order: Adopted procedures to provide more limited access to certain particularly competitively sensitive information that may be filed in the E-rate Modernization proceeding.
    Word PDF
  • 1/23/2014
    E-Rate First Level Protective Order: Adopted procedures to limit access to proprietary or confidential information that may be filed in the E-rate Modernization proceeding.
    Word PDF
  • 1/17/2014
    Windstream Extension Order: Grants Windstream an extension of 7 days to complete and submit Urban Rates Survey.
    Word PDF
  • 1/17/2014
    California Telehealth Network Public Notice: Seeks comment on a California Telehealth Network request for review of a Universal Service Administrative Company Rural Health Care program decision.
    Word PDF
  • 1/16/2014
    Frontier Extension Order: Grants Frontier an extension of 7 days to complete and submit Urban Rates Survey.
    Word PDF
  • 1/16/2014
    Montgomery County School District, Rockville, MD: Granted Montgomery County School District’s request for review of Universal Service Administrative Company decisions under the E-rate program.
    Word PDF
  • 1/15/2014
    2014 Benchmarks Public Notice: Released the 2014 HCLS benchmarks.
    Word PDF Benchmarks
  • 1/14/2014
    National Lifeline Accountability Database Public Notice: The Wireline Competition Bureau Announces Duty to Query the National Lifeline Accountability Database.
    Word PDF
  • 1/10/2014
    Adak-Windy City Interim Support Extension Order: Approved limited, interim relief for Adak and Windy City from certain Commission rules governing high-cost universal service support, to provide the companies with limited additional interim support.
    Word PDF
  • 1/10/2014
    Connect America Phase I Challenge Resolution Order: Resolved challenges in the Connect America Phase I challenge process and authorized distribution of approximately $18.7 million in Phase I support.
    Word PDF
  • 1/9/2014
    Study Area Boundary Extension Order: Order extending the deadline to file revised study area boundary data from January 13, 2014 to March 17, 2014.
    Word PDF
 
Updated: April 18, 2014
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