Universal Service Fund
What It Is and Why It’s Important to Cooperatives
What is the Universal Service Fund (USF for short)?
The USF is a government program which is critical to getting, and keeping, rural consumers connected to high quality, affordable communication services. As for the history behind USF, prior to the Telecommunications Act of 1996, the USF operated as a mechanism interstate long distance carriers were charged to subsidize telephone service to low-income households and high-cost areas. The Communications Act of 1934 stated “all people in the United States shall have access to rapid, efficient, nationwide communications service with adequate facilities at reasonable charges.”
To learn more about the USF, and why it’s important for Cooperatives, click here.
How Could Changes to the USF Could Affect HTC?
What’s next with the USF? That’s quite possibly the multi-million-dollar question. Congress and Federal regulators have been mulling over options for how the USF is calculated (contribution reform) and how it’s distributed. Right now, USF only comes from traditional phone revenue from all providers across the country, with no contribution from broadband. This means USF contributions come from voice lines, fax lines and long distance. These are all services that are evaporating. With less revenue as the basis to support the aggregate demand of the USF, yearly assessments on that revenue have continued to climb to unsustainable levels.
Some interest groups are even advocating for the complete discontinuance of USF, in a case that could make its way to the Supreme Court. Boiling these options down to the basics, the cost of broadband service is either borne fully by the service rates you pay or also with the help of USF support (in whatever way it may be reformed). This has been the model that has keep rates affordable for many decades.
To learn more about possible USF changes, click here.
How Will These Potential Changes Affect HTC?
If USF were not in place, there would be less revenues to offset these requirements going forward. This revenue loss could put HTC in a position to have to consider additional rate increases for members to support these requirements or delay the amount of Capital Credits able to be refunded to the membership. Those are not things we want to do, but we also must meet the needs of members as technology evolves to remain relevant.
To learn more about potential changes, click here.
What Is HTC Doing To Speak Up?
HTC is heavily involved on both the national and state levels when it comes to advocacy for important telecommunications issues. We actively voice our concerns and our commitment on behalf of rural America and our members.
In our conversations with state and federal legislators we stress the critical importance of these programs to ensure everyone has affordable access to the best services possible. We are also very involved and partner with several national associations that collectively pool our voices and interests with many other cooperatives and small independent providers throughout the country.
How Can Members Voice Their Concerns About USF?
The simple answer is to let your representatives hear your voice. Whether it’s Columbia or Washington, we all know that our leaders should be listening to what their constituents view as important.
If residents and businesses are silent on this issue, then there may be a swelling sense that USF doesn’t matter.
For a comprehensive overview of USF, check out this video featuring HTC CEO Carlton Lewis.
