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Federal Universal Service Fund

The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.

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5th Circuit Denies Huawei Challenge to FCC USF Ban
June 22, 2021 |Other U.S.

The 5th U.S. Circuit Court of Appeals denied Huawei’s challenge to the FCC ban of the Chinese telecom gear vendor's equipment from networks funded by the Universal Service Fund under its national security supply chain rules (see 1911220064). Huawei sought the review in December. “If we were convinced that the FCC is here acting as ‘a sort of junior-varsity’ State Department,” the court “would set the rule aside,” Judge Stuart Kyle Duncan said Friday for the three-judge panel. “But no such skullduggery is afoot. Assessing security risks to telecom networks falls in the FCC’s wheelhouse.” Huawei is “disappointed” by the ruling and is “assessing” its “options to respond,” a spokesperson emailed: The company continues “to believe the FCC acted without authority in changing” its USF rules. The FCC didn’t comment. Wiley’s Tom Johnson, former FCC general counsel, said he’s “proud to have represented” the U.S. “in this important case.” Matthew Berry, who was chief of staff to then-FCC Chairman Ajit Pai, also praised the ruling.

5G Supply Chain Rules Approved by FCC; Ban Imposed on Huawei, ZTE
November 22, 2019 |Other U.S.

The Federal Communications Commission approved national security supply chain rules on Nov. 22, barring equipment from Chinese vendors Huawei and ZTE from networks funded by the Universal Service Fund and establishing rules that could block other providers (see 1910300036). “Both Huawei and ZTE have close ties to the Chinese government and military apparatus and are subject to Chinese laws requiring them to assist with espionage, a threat recognized by other federal agencies and the governments of other nations,” an FCC news release said: “The public funds in the FCC’s USF … must not endanger national security through the purchase of equipment from companies posing a national security risk.”

FCC Considers Banning Huawei, ZTE Equipment From US Networks
October 30, 2019 by Howard Buskirk|Other U.S.

The Federal Communications Commission released a draft proposal Oct. 29 to ban equipment from Chinese vendors Huawei and ZTE from networks funded by the Universal Service Fund. Huawei signaled it will fight. Commissioners are scheduled to vote Nov. 19. President Donald Trump issued an executive order in May that bars imports and other "transactions involving information and communications technology [ICT] or services" without a broad interagency review (see 1905160019).

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