New Year, New Solutions: Reforming Universal Service Contributions

The $3.2 billion Emergency Broadband Benefit Program, which promises up to $50/month towards broadband service, is a real step in the right direction.  But those dollars will be quickly exhausted. Based on the Universal Service Administrative Company’s most recent numbers, there are 33.2 million households eligible for the existing Lifeline program.  If only half of these households take advantage of the emergency benefit, it will cost as much as $800 million a month.  At that rate, the new funding will be gone in as little as 4-6 months, faster if you factor in the additional eligible groups and the promise of up to $100 in connected device reimbursements. And when that funding is exhausted, policymakers will not be able to look to the current Lifeline program to continue the Emergency Broadband Benefit Program.  A discount of $50/month for just half of eligible Lifeline households would increase the cost of the existing fund from just under $900 million/year to $9.6 billion/year.  And that’s just half of eligible households.  In that scenario, an already unsustainable 31.8% factor would rocket to over 65% and accelerate as the current inadequate revenue base continues to erode. Universal service contributions reform is no longer optional.  It is time for new solutions.