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 providers of telecommunications based of an assessment on their interstate and internation end-user revenues. Examples of entities that contribute to the Fund are telecommunications carriers, including wireline and wireless companies, and interconnected Voice over Internet Protocol (VoIP) providers, including cable companies that provide voice service. 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, the purpose of which 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 provide service, 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 principles include:

  • 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 for 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 support from the Universal Service Fund. 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.

2018 Universal Service Headlines

April

  • 4/26/2018
    Alaska Communications Systems’ Reconsideration Order: :FCC decides Alaska Communications Systems’ petition concerning Connect America Fund Phase II voice and broadband service obligations.
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  • 4/19/2018
    FairPoint Order and Declaratory Ruling: : FCC decides legacy support issue arising from the ongoing reform and modernization of the universal service fund and intercarrier compensation systems.
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  • 4/18/2018
    Supply Chain Notice of Proposed Rulemaking: FCC proposes prohibiting use of universal service support on equipment or services from companies that pose national security threats.
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    Chairman Pai
    Commissioner Clyburn
    Commissioner O'Rielly
    Commissioner Carr
  • 4/5/2018
    Tribal Funding Order: The Commission allows certain rate-of-return carriers serving Tribal communities to recover higher levels of operational expenses, given the unique and challenging circumstances that make it more expensive to serve Tribal lands.
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    Chairman Pai
    Commissioner Clyburn
    Commissioner O'Rielly
    Commissioner Carr
    Commissioner Rosenworcel
  • 4/4/2018
    Alaska Communications Petition for Clarification or Limited Waiver of the Geocoded Location Identification Requirements of the Connect America Fund Phase Order: WCB denies the petition for clarification or waiver filed by Alaska Communications Services Group, Inc. (ACS).
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March

  • 3/30/2018
    March USF Appeals Disposition Public Notice: Consistent with precedent, WCB grants, dismisses, or denies a number of requests for review, requests for waiver, and petitions for reconsideration of decisions related to actions taken by the Universal Service Administrative Company.
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  • 3/28/2018
    Oglala Sioux Tribe Petition for Reconsideration Public Notice: Wireline Competition Bureau Seeks Comment on Oglala Sioux Tribe Petition for Reconsideration of Partial Waiver Order
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  • 3/27/2018
    WCB Opens WC Docket No. 18-89 Public Notice: WCB opens WC Docket No. 18-89, which is captioned “Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs.”
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  • 3/23/2018
    Connect America Fund, et al. Report and Order, Third Order on Reconsideration and Notice of Proposed Rulemaking: The Commission takes several steps to increase broadband deployment in rural areas. These actions include reducing, refining, and clarifying existing rules, and providing additional support in return for increased broadband deployment obligations.
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    Chairman Pai
    Commissioner Clyburn
    Commissioner O'Rielly
    Commissioner Carr
    Commissioner Rosenworcel
  • 3/20/2018
    Shenandoah Personal Communications, LLC Relinquisment Order: TAPD grants the request of Shenandoah Personal Communications, LLC (Shentel), successor by merger of NTELOS, to relinquish NTELOS’ eligible telecommunications carrier (ETC) designation in Virginia.
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  • 3/19/2018
    Promoting Telehealth in Rural America Order: Waives the Healthcare Connect Fund’s funding year 2017 invoice filing deadline for the funding request numbers identified in the Appendix.
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  • 3/14/2018
    FCC Names NY Commissioner Sayre to Joint Board on Universal Service Order: The Commission appoints the Honorable Gregg Sayre, Commissioner of the New York State Public Service Commission, to serve on the Federal-State Joint Board on Universal Service.
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  • 3/13/2018
    Pine Ridge Waiver Order: WCB grants in part the request of the Oglala Sioux Tribe for a temporary waiver of the Lifeline recertification rules.
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  • 3/13/2018
    USAC Board Appointment Public Notice: WCB denies PRTC’s request for declaratory ruling, but grants a limited waiver such that no support will be recovered from PRTC for locations it served within a year of its Phase I incremental support deadlines.
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  • 3/13/2018
    Puerto Rico Telephone Company, Inc.Declaratory Ruling Order: WCB denies PRTC’s request for declaratory ruling, but grants a limited waiver such that no support will be recovered from PRTC for locations it served within a year of its Phase I incremental support deadlines.
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  • 3/1/2018
    Telrite Corporation Order: WCB grants, in part, the petition of Telrite Corporation to extend the Bureau’s temporary waiver of the Lifeline Program’s recertification and non-usage rules in Puerto Rico and the United States Virgin Islands through May 31, 2018.
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  • 3/1/2018
    Guidance on CAF-BLS Reporting and Deployment Obligations Public Notice: WCB provides additional guidance and clarification regarding FCC Form 477 and High Cost Universal Broadband (HUBB) reporting obligations.
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  • 3/1/2018
    CAF II Model Eligible Area Public Notice: WCB releases a revised list of census blocks eligible for Connect America Phase II model-based support where price cap carriers accepted a state-level commitment to deploy broadband.
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February

  • 2/28/2018
    February USF Appeals Disposition Public Notice: Consistent with precedent, WCB grants, dismisses, or denies a number of requests for review, requests for waiver, and petitions for reconsideration of decisions related to actions taken by the Universal Service Administrative Company.
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  • 2/26/2018
    E-Rate Invoicing Waiver Order: Waives invoice extension rule to provide extraordinary relief for applicants and service providers affected by USAC delays.
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  • 2/22/2018
    Allband Communications’ Waiver Petition Order: WCB grants in part and denies in part a petition for waiver filed by Allband Communications Cooperative (Allband) of section 54.302 of the Commission’s rules.
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  • 2/22/2018
    Grand River Mutual Telephone Corporation and South Central Communications, Inc. Public Notice: WCB seeks comment on the petition of Grand River Mutual Telephone Corporation (Iowa) (GRMIA) and South Central Communications, Inc. (SCC) for waiver of the definition of “study area.”
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  • 2/20/2018
    E-Rate Inflation Adjustment Public Notice: Announces E-rate program budgetary cap for funding year 2018.
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  • 2/20/2018
    Lifeline Universal Forms Public Notice: WCB provides guidance regarding the new universal forms for the Lifeline program that consumers and eligible telecommunications carriers (ETCs) must use to verify and recertify subscriber eligibility beginning on July 1, 2018.
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  • 2/15/2018
    FCC Forms 499-A and 499-Q Public Notice: WCB Announces Release of 2018 Telecommunications Reporting Worksheets and accompanying instructions to be used in reporting 2017 revenues.
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    Form 499-A Instructions
    Form 499-Q Instructions
  • 2/9/2018
    Sprint Reconsideration Order: Denied Sprint's Petitions for Reconsideration of the Bureau's Lifeline Waiver Extension Orders, which granted California, New York, and Michigan additional time to implement the revised Lifeline qualifying programs.
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  • 2/9/2018
    California Public Utilities Commission Wildfire Order: WCB grants in part the California Public Utilities Commission’s two petitions requesting temporary waivers of the Lifeline program’s non-usage and recertification rules for subscribers in counties affected by the California wildfires.
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  • 2/8/2018
    NaLa Petition for Declaratory Ruling Public Notice: WCB seeks comment on a Petition for Declaratory Ruling by National Lifeline Association (NaLA) regarding reimbursement for all Lifeline subscribers who are eligible as of the first of the month.
    Word PDF
  • 2/6/2018
    Revised CAF Phase II Eligible Area Public Notice: WCB releases a revised final list of census blocks eligible for the Connect America Fund Phase II auction (Auction 903), a revised list of the census block groups and associated annual reserve prices and location counts, and a revised map showing the eligible blocks within the census block groups.
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  • 2/5/2018
    Alaska Communications Systems Challenge Process Public Notice: The Wireline Competition Bureau commences the challenge process for Alaska Communications Systems (ACS) to identify areas eligible for its Connect America Fund Phase II frozen support.
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  • 2/2/2018
    Telrite Corporation Waiver Extension Order: WCB the petition of Telrite Corporation to extend the Bureau’s previously granted temporary waiver of the Lifeline Program’s recertification rules in Puerto Rico and the United States Virgin Islands through April 30, 2018.
    Word PDF

January

  • 1/31/2018
    SES Government Services, Inc Seeks Comment on Petition for Reconsideration: WCB seeks public comment on a petition for reconsideration filed by SES Government Services, Inc., asking the Bureau to reconsider its May 24, 2017 Order, which denied a petition for clarification or declaratory ruling from Stratos Government Services, Inc.
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  • 1/31/2018
    January USF Appeals Disposition Public Notice: Streamlined Resolution of Requests Related to Actions by the Universal Service Administrative Company.
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  • 1/23/2018
    The National Hispanic Media Coalition Comment Extension Order: WCB grants in part the National Hispanic Media Coalition’s (NHMC) request for an extension of time to file comments and reply comments in response to the 2017 Lifeline Notice of Proposed Rulemaking (NPRM) and Notice of Inquiry (NOI).
    Word PDF
  • 1/11/2018
    Alaska Telephone Association Petition for Clarification and Waiver of Lifeline Minimum Service Standards Public Notice: WCB seeks comment on Alaska Telephone Petition for Clarification and Waiver of certain Commission rules relating to the Lifeline minimum service standards for mobile broadband service and fixed broadband service in remote areas in Alaska.
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  • 1/10/2018
    Guidance on the Lifeline Reimbursement Payment Process Based on NLAD Data Public Notice: WCB provides guidance to carriers regarding the Lifeline reimbursement process using subscriber data contained in the National Lifeline Accountability Database (NLAD).
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  • 1/4/2018
    Comment and Reply Dates for Rural Health Care Rulemaking Public Notice: Wireline Competition Bureau Announces Comment and Reply Comment Dates for Notice of Proposed Rulemaking on Promoting Telehealth in Rural America.
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Bureau/Office: 

Updated: 
Thursday, April 26, 2018