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Since its creation in 1934 the Federal Communications Commission (FCC) has been tasked with

mak[ing] available, so far as possible, to all the people of the United States . . . a rapid, efficient, Nation-wide, and world-wide wire and radio communications service with adequate facilities at reasonable charges.[1]

This mandate led to the development of what has come to be known as the universal service concept. The concept is based on the premise that communications services are so fundamental to modern life that national policies should ensure that all citizens have reasonable and affordable access to those services.

The universal service concept, as originally designed, called for the establishment of policies to ensure that telecommunications services are available to all Americans, including those in rural, insular and high cost areas, by ensuring that rates remain affordable. Over the years this concept fostered the development of various FCC policies and programs to meet this goal. The FCC offers universal service support through a number of direct mechanisms that target both providers of and subscribers to telecommunications services.

The development of the federal universal service high cost fund is an example of provider-targeted support. Under the high cost fund, eligible telecommunications carriers, usually those serving rural, insular and high cost areas, are able to obtain funds to help offset the higher than average costs of providing telephone service. This mechanism has been particularly important to rural America where the lack of subscriber density leads to significant costs.

FCC universal service policies have also been expanded to target individual users. Such federal programs include two income-based programs, Link Up and Lifeline, established in the mid-1980s to assist economically needy individuals. The Link Up program assists low-income subscribers with paying the costs associated with the initiation of telephone service and the Lifeline program assists low-income subscribers with paying the recurring monthly service charges. Funding to assist carriers providing service to individuals with speech and/or hearing disabilities is also provided through the Telecommunications Relay Service Fund. Effective January 1, 1998, schools, libraries, and rural health care providers also qualified for universal service support.

Universal service and the Telecommunications Act of 1996[]

Passage of the Telecommunications Act of 1996[2] codified the long-standing commitment by U.S. policymakers to ensure universal service in the provision of telecommunications services.

Congress, through the 1996 Act, not only codified, but also expanded the concept of universal service to include, among other principles, that elementary and secondary schools and classrooms, libraries, and rural health care providers have access to telecommunications services for specific purposes at discounted rates.[3]

Universal service and broadband[]

One of the policy debates surrounding universal service is whether access to advanced telecommunications services (i.e., broadband) should be incorporated into universal service objectives. The term universal service, when applied to telecommunications, refers to the ability to make available a basket of telecommunications services to the public, across the nation, at a reasonable price. As directed in the Telecommunications Act of 1996[4] a federal-state Joint Board was tasked with defining the services which should be included in the basket of services to be eligible for federal universal service support; in effect using and defining the term “universal service” for the first time. The Joint Board’s recommendation, which was subsequently adopted by the FCC in May 1997, included the following in its universal service package: voice-grade access to and some usage of the public switched network; single-line service; dual-tone signaling; access to directory assistance; emergency service such as 911; operator services; and access and interexchange (long-distance) service.

Some policy makers expressed concern that the FCC-adopted definition is too limited and does not take into consideration the importance and growing acceptance of advanced services such as broadband and Internet access. They point to a number of provisions contained in the Universal Service section of the 1996 Act to support their claim. Universal service principles contained in Section 254(b)(2) state that “Access to advanced telecommunications services should be provided to all regions of the Nation.” The subsequent principle (b)(3) calls for consumers in all regions of the nation including “low-income” and those in “rural, insular, and high cost areas” to have access to telecommunications and information services including “advanced services” at a comparable level and a comparable rate charged for similar services in urban areas. Such provisions, they state, dictate that the FCC expand its universal service definition.

The 1996 Act does take into consideration the changing nature of the telecommunications sector and allows for the universal service definition to be modified if future conditions warrant. Section 254(c)of the act states that “universal service is an evolving level of telecommunications services” and the FCC is tasked with “periodically” reevaluating this definition “taking into account advances in telecommunications and information technologies and services.” Furthermore, the Joint Board is given specific authority to recommend “from time to time” to the FCC modification in the definition of the services to be included for federal universal service support.

The Joint Board, on November 19, 2007, concluded such an inquiry and recommended that the FCC change the mix of services eligible for universal service support. The Joint Board recommended, among other things, that “the universal availability of broadband Internet services” be included in the nation’s communications goals and hence be supported by federal universal service funds. The FCC in its national broadband plan, Connecting America: the National Broadband Plan, recommended that access to and adoption of broadband be a national goal and had proposed that the Universal Service Fund be restructured to become a vehicle to help reach this goal. Others caution that a more modest approach is appropriate given the “universal mandate” associated with this definition and the uncertainty and costs associated with mandating nationwide deployment of such advanced services as a universal service policy goal.


  1. 47 U.S.C. §151.
  2. Pub. L. No. 104-104.
  3. See Sections 254(b)(6) and 254(h) of the Telecommunications Act of 1996, 47 U.S.C. §254.
  4. Section 254(c).