Broadband Breakfast on October 26, 2022 – Challenging the Broadband Fabric : Broadband Breakfast

WASHINGTON, October 12, 2022 – A Broadband Breakfast event panelist doubled down last week on her call for the Federal Communications Commission to unilaterally expand contributions to the Universal Service Fund, despite the commission deciding this summer that any such change should come at the direction of Congress.

Carol Mattey, founder of Mattey Consulting LLC and publisher of a report last year calling for the USF contribution base to be expanded to include broadband revenues, said on the panel last Wednesday that the FCC has the statutory authority to transform the basic telecommunications fund from relying on declining voice services revenues.

In a report to Congress in August, the FCC said any change to the USF would have to come from legislative authority, arguing that there is “significant ambiguity in the record regarding the scope of the Commission’s existing authority to broaden the base of contributors.”

But Mattey – who previously said that the FCC should move on its own – argued that Congress would be too slow to act and described her perspective as “pragmatic,” arguing the FCC shouldn’t “wait for Congress to sort through these complex issues.”

The USF, which originated in 1997, subsidizes telecommunications projects across the country and is funded by voice-based services – costs which are generally passed on to the consumer. But those costs are increasing relative to the voice revenues from which they are derived, as fewer Americans take-up those services.

To rectify this imbalance, industry players have proposed a variety of new funding sources, including direct taxation, digital advertising revenue and broadband service contributions.

Roslyn Layton

Roslyn Layton, senior vice president of Strand Consult, proposed having big technology companies that rely on broadband to contribute to the fund.  She said the vast majority of bandwidth is taken up by video streaming, an activity which – along with other services hosted by tech platforms – depends on large investments in middle-mile networks from broadband companies. Such reform of the USF would require congressional action, Layton conceded.

Angie Kronenberg, chief advocate and general counsel at industry trade group INCOMPAS, argued against funding the USF with dollars from Big Tech. She argued Layton’s proposals would be less “predictable and sufficient and transparent” than a simple tax on broadband service.

“We think doing it once, and at the [broadband-service level,] is the most efficient, effective way to do this,” said Kronenberg. “No matter how Angie Kronenberg – the consumer – wants to use my broadband, I’d much prefer to pay it one time than to pay it potentially for every click of whatever it is I’m going to do.”

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Wednesday, October 5, 2022, 12 Noon ET – How to Reform the Universal Service Fund

The Universal Service Fund has been struggling to fund its programs promoting broadband connectivity across the country. Several policy experts have suggested fundamental changes to the structure of USF’s funding mechanisms to revitalize the program. Should the Federal Communications Commission broaden the program’s jurisdiction to include broadband revenues? Can the mission of USF survive without significant structural change?