Why the Universal Service Fund Matters Now More Than Ever

For decades, the Universal Service Fund (USF) has played a crucial role in closing the digital divide—supporting rural broadband infrastructure, low-income connectivity discounts, and internet access in schools, libraries, and healthcare facilities. But today, the USF stands at a critical crossroads.

A Fragile Foundation

In June 2025, the U.S. Supreme Court upheld the constitutionality of the USF’s contribution system in FCC v. Consumers’ Research, ruling that the Federal Communications Commission (FCC) did not overstep its authority in administering the fund through its designated administrator, USAC. This decision preserved the program’s legal foundation,

for now.

However, the Court’s 6–3 split highlighted growing concerns about whether agencies like the FCC should be allowed to impose what some view as taxes without direct congressional approval. While this ruling secured the USF’s immediate future, it also underscored the need for more sustainable, modernized funding mechanisms.

A Shrinking Base, A Growing Burden

The USF is currently funded through fees on interstate and international voice services. As more consumers shift away from traditional phone service to internet-based communication platforms, the revenue base supporting the fund has eroded. This has caused the contribution factor (the percentage telecom providers must pay) to skyrocket, reaching 36% in Q3 2025, with many of those costs passed on to consumers.

This rising cost burdens low-income households—the very communities the USF is meant to support—and threatens the long-term viability of the fund.

Organizing in a Post-ACP World

The expiration of the Affordable Connectivity Program (ACP) earlier last year left millions of households suddenly without critical broadband subsidies. In response, digital equity advocates across the country, including coalitions like DELN, are organizing to demand more permanent, structural solutions.

Coalition-building efforts now focus on:

• Sharing community stories with policymakers to highlight the need.

• Tracking how states are filling (or failing to fill) the ACP gap.

• Advocating for federal and state legislation to modernize and expand programs like the USF.

Time for Reform

Despite surviving legal challenges, the USF is still on shaky ground unless Congress steps in. Advocates and public officials are calling for:

• Modernizing the contribution base, potentially including broadband services and major tech platforms.

• Permanent legislative funding, rather than ad hoc programs vulnerable to political shifts.

• Greater transparency and oversight, ensuring funds reach those most in need.

What This Means for Digital Equity

DELN and partners across Washington State are committed to ensuring that broadband access and affordability are treated as a basic human service, not a privilege. As the national conversation shifts from emergency subsidies to sustainable infrastructure, the Universal Service Fund can either be reformed into a modern equity tool - or allowed to crumble under outdated policy frameworks.

Now is the time for community-based advocacy and coalition action to shape the future of broadband funding. We invite you to stay engaged and informed as we push for a system that works for everyone - permanently.