Why Is the Universal Service Fund Important?
By: Jill Kuehny, CEO
The Universal Service Fund (USF) formed to ensure all Americans have access to affordable and reliable telecommunications services. Over 100 years ago, rural areas struggled with the challenge of how to get connectivity. In those early days, rural ingenuity prevailed with local citizens building telephone lines to connect their homes and businesses. Today, connectivity has expanded to broadband, and the Universal Service Fund helps build and maintain rural networks and internet discounts for low-income households, schools and libraries, and healthcare centers.
Supreme Court Case Challenges USF
A significant legal challenge to the USF is here. In recent developments, the Consumers’ Research case at the Supreme Court is contesting the mechanism for which Universal Service is collected. They challenge the oversight Congress gave the to Federal Communications Commission (FCC) to further delegate the collection process to the Universal Service Administration Company and will hear the arguments on March 26th. The outcome of this case could have far-reaching implications for the future of the USF.
USF Reform
Along with that timing of events, there has been a growing effort lasting over a decade to modernize and reform the funding mechanism of the USF. This effort has been ongoing for over a decade. The current system collects fees on voice lines that use long distance. As people dropped landlines and opted for data-only services, the contribution rate to the fewer voice subscribers has grown to 36%. Solving the issue has been a heated debate for the past several years, but the FCC delayed solving it. The formula needs to modernize to include all broadband connections as opposed to voice only, and it is suggested to have “Big Tech” also pay to deliver their online and streaming services that they currently pay zero to deliver to every user.
How The Pandemic Impacted Connectivity Awareness
Communities felt the effects of lagging broadband access in varying degrees before 2020, but they weren’t jarred by it until Covid hit. The pandemic shined a light into every dark corner and crevice of what’s actually happening with our nation’s overall connectivity. In many communities, the decade of underinvestment in modern systems was laid bare. The informational demands for residents—both residential and business sectors—increased rapidly and dramatically. Suddenly, schools and businesses started to rely on video meetings as learn-from-home and work-from-home became essential. With more time at home, a number of people invested their entertainment dollars into online video streaming and games. People started to see frozen screens, pixelated images, and buffering wheels. After a decade of using predominately download speeds, suddenly they needed higher upload speeds. Without an understanding of what or why, consumers started educating themselves and advocating for better broadband solutions.
Kanokla’s Commitment to Rural Broadband
At Kanokla we understood the importance of connectivity long before the pandemic. We completed a member-owned, system wide fiber-optic network in 2015 across all of our small towns and the farmland between. We were prepared and weathered the shutdown mandates handily. Our members told us their grandkids moved in to do school or their daughter moved back home to use their robust, reliable broadband to do remote work. Many hosted family members from larger cities so they could do work and school online with a reliable broadband connection. Our neighboring communities asked us to expand our fiber optic network to them Bewildered because although they were larger in population, they lacked modern infrastructure. Grants for broadband were nonexistent until five years ago. Since then Kanokla has leveraged six grants to close the digital divide to ensure our rural region stays relevant and competitive with the greater world.
Fiber has the strongest technological capability relative to all other broadband technologies. It is scalable to meet any future demand. It lasts decades, making it the most efficient and affordable over the long haul. Kanokla has successfully converted three of our neighboring county seats from fixed wireless technology to fiber optic, dramatically reducing the maintenance costs over time and giving us unlimited capacity to increase speeds.
USF and Rural America
The USF plays a vital role in making connectivity accessible and affordable in high-cost, hard-to-reach locations. Our nation relies on rural areas for essential resources, including food, fuel, fiber, and renewable energy. Connections go both ways, though. Without this fund rural communities would struggle to connect to the world, which would hinder economic growth, education, and healthcare access. Without connectivity rural areas would whither and the urban areas that consume the food, fuel, fiber, and renewables would whither as well.
As the industry debates the future of the USF and broadband funding reform, one thing remains clear: investment in rural broadband is an investment in America’s future. Kanokla is committed to advocating for policies that sustain and expand connectivity, ensuring our communities remain vibrant, competitive, and well-connected to the rest of the world.
