March 6, 2024 – Senator Ted Cruz (R-TX), ranking member of the U.S. Senate Committee On Commerce, Science, And Transportation, has released a document titled “Protecting Americans From Hidden FCC Tax Hikes: A Blueprint For Universal Service Fund Reform.” The document focuses on USF contributions and the USF’s four support mechanisms: E-Rate, Lifeline, Rural Health Care, and High Cost. Ultimately, Senator Cruz argues that “Congress must reform the USF’s structural problems, re-evaluate its component programs, and get the FCC’s spending under control.” This reform effort, according to Senator Cruz, should be guided by the following eight principles:

1. Put Congress back in the driver’s seat (Congress should define universal service and decide where funding goes);

2. Move social welfare spending on-budget (the High Cost fund should stay within the USF, but the other programs should be subject to direct congressional appropriations);

3. Eliminate program duplication (duplicative USF spending should be eliminated);

4. Stop subsidizing networks that face unsubsidized competition (companies should not receive USF support for areas served by an unsubsidized competitor);

5. Do not subsidize Infrastructure Investment And Jobs Act funded networks’ ongoing operational costs (ongoing support for Infrastructure Act-funded networks should not be available except in case-by-case, exceptional circumstances);

6. Target low-income subsidies to those who truly need them (Lifeline and ACP should at least be combined, and clear performance metrics should be develop to track the effectiveness of support);

7. Ensure E-Rate is truly improving education and not aggravating kids’ screen addictions (E-Rate authority is explicitly confined to classrooms, and support should truly benefit pedagogical objectives); and

8. Establish better controls to stop waste, fraud, and abuse (the FCC should follow GAO and IG recommendations and implement better safeguards).