Letter to the USF Working Group Regarding the Future of the Universal Service Fund

Dear Senator Fischer, Senator Luján, and members of the USF Working Group,

The Information Technology and Innovation Foundation (ITIF) appreciates the opportunity to comment on the future of the Universal Service Fund (USF). Two key facts should guide the Working Group:

1. Universal broadband deployment is now a reality.

2. The digital divide remains because of adoption and affordability barriers.

The combination of these facts calls for Congress to refocus the Universal Service Fund to eliminate unnecessary spending and put redirected funds to where they most benefit consumers. To that end, ITIF has developed the attached proposal to rethink the High-Cost Fund and Lifeline and create a more stable and fair funding mechanism. While the report contains detailed reasons for each component of the plan, here are the basic parameters:

▪ Sunset the High-Cost fund to zero by 2031.

▪ Modernize Lifeline to become a flexible, consumer-focused, $30 per month broadband voucher.

This plan would shrink USF spending by approximately $2 billion per year.

While distribution reform is the best way to shrink the contribution factor, Congress should also reform USF funding to come from general appropriations, or some other method of encompassing the entire U.S. tax base. Congress should not continue to rely on, or impose new, sector-specific contributions of any kind. These only perpetuate the instability and unfairness of the current system and would require higher tax rates than the broader base of all taxpayers.

Thank you for your consideration. We look forward to working with you on this important issue.

Sincerely,

Attachment: “How the Universal Service Fund Can Better Serve Consumers While Spending Less” (ITIF, September 2025).