Yesterday, TechFreedom filed comments to the U.S. Senate Universal Service Fund (USF) Working Group in response to their Request for Comment. Congress should enact legislation directing the Federal Communications Commission (FCC) to either eliminate or completely overhaul its private delegation of USF administration to the Universal Service Administrative Company (USAC).

“Congress must provide stronger oversight and legislative reform,” said James E. Dunstan, TechFreedom’s Senior Counsel. “Congress must step in and require the FCC to administer the USF, not delegate it to a private company. USAC has every incentive to keep driving costs up and hide behind an opaque system that is not subject to FOIA or any other practical oversight. On average, Americans pay USAC around a dollar a month to administer the USF, with virtually no FCC oversight and zero accountability to the public. The Supreme Court recently upheld the USF scheme as constitutional, but that doesn’t make this bizarre structure good policy or a model of good governance.” 

“USAC acts as both judge and jury, with the power to demand repayment of funds with no statute of limitations to limit a roving band of auditors,” Dunstan warned. “Yes, substantial waste, fraud, and abuse exists in the USF program, but perhaps the greatest problem is the system’s structure: the FCC has abdicated its statutory responsibility through private delegation to a company with direct ties to the telecommunications industry. The company sets its own budget, pays itself handsomely, and creates a funding process so complicated that all but the most sophisticated recipients must pay consultants to help them through the process—many of them former FCC and USAC staffers.” 

“Simply legislating a larger contribution base won’t solve the problem,” Dunstan concluded. “If edge providers such as Netflix or Apple TV had to pay into the USF, they’d simply passing those fees on to customers. They’d also rethink investing in Internet infrastructure, from data centers to the large servers strategically placed to minimize the distance their programming must be carried to reach subscribers. The real problem is USF’s lack of democratic accountability. The fix is obvious: like any other welfare program, USF should be funded out of the overall U.S. budget.”

###

Find these comments on our website, and share them on Twitter and Bluesky. We can be reached for comment at media@techfreedom.org. Read our related work, including:

About TechFreedom: TechFreedom is a nonprofit, nonpartisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.

</>