The proposal is a further sign of a deteriorating relationship between Republicans and Big Tech
The USF needs reforming: In the US, the Universal Service Fund (USF) pays out about USD10bn a year for broadband deployment and subsidies for low-income households. It’s currently funded by telecoms operators’ voice services – particularly their interstate voice revenue. Over time, that source of revenue has been in decline, especially with the increasing adoption of internet-based communication. If the current trend continues, voice services will soon become an unsustainable revenue source for the USF. There has been renewed attention around the issue since Republican FCC commissioner Brendan Carr called for an expansion of the contribution base. In an opinion piece in Newsweek, Carr argued that Big Tech has enjoyed a “free ride” on America’s internet infrastructure without contributing to building and maintaining networks.
A new bill could pave the way for change: Last week, three US Senators introduced a bill to take the first steps toward a change in the way the USF is funded. The Funding Affordable Internet with Reliable Contributions Act (FAIR Act) would direct the FCC to start a consultation (and report within 180 days) on the feasibility of collecting USF contributions from “internet edge providers”, such as Netflix and YouTube. The FCC would have to consider possible sources of Big Tech revenue, such as digital advertising and user fees, and the feasibility of assessing contributions from a broad category of firms that do not currently register with the FCC.
The initiative could gain bipartisan support: A noteworthy aspect of the bill is that it comes from three Republican senators, at a time when the Republican party is at loggerheads with Big Tech. In recent months, Republicans have voiced their discontent for the alleged anti-conservative bias of these companies in tackling disinformation and hate speech. Many Republican representatives in Congress have sided with Democrats on the proposals to reform the antitrust regime and tackle the dominance of Big Tech, and the FAIR Act is a further sign of the deteriorating relationship between Republicans and online platforms. It is currently unclear whether there will be bipartisan support for this initiative in Congress, although the Democrat Acting Chairwoman of the FCC, Jessica Rosenworcel, defined the idea as “intriguing” in June.
