The FCC has issued a notice of proposed rulemaking (NPRM) that would inhibit the Universal Service Fund and could cut financial support for the E-rate program. Under the new proposal, a master funding cap would add layers of regulation and complexities to the Universal Service Fund even though the fund is already limited in scope. This regulatory sleight of hand should be stopped.

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This week starts the official comment period for the FCC’s proposed master funding cap on the  Universal Service Fund (USF). There are four USF programs and they each currently function with significant financial constraints and oversight. The FCC’s NPRM goes so far as to acknowledges the fact that “the constituent USF programs are capped or operating under a targeted budget…” 

To be painfully clear, the E-rate program is subject to an overall budget cap of about $4 billion. Let’s repeat that statement and add a single word for emphasis: The E-rate program is already subject to an overall budget cap of about $4 billion. The other programs already are constrained as well.

What does the FCC hope to gain by adding a master funding cap? Why override the governance that is presently in place? What is the problem that needs addressing? Perhaps the real issue is a need for USF contribution reform (i.e. the source of funding for the USF programs)? But without a clearly articulated issue, it is difficult to propose and debate solutions. The FCC would better serve the public good if it were to first define the challenge that the FCC alleges we are facing.

In the meantime, we are left with the potential for confusing regulations that add no additional value, create complexity and uncertainty, and lead us down a path that will reduce support for broadband in schools and libraries. The proposed preemptive regulation does not serve the public’s interest. As Chairman Pai himself says, “Consumers benefit most from competition, not preemptive regulation.”

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Internet access in schools and libraries is vital for our communities, and the E-rate program, subject to existing regulatory limitations, is fulfilling its mission. No new master cap is necessary.

A broad coalition led by SHLB has already weighed in and now it is time for schools and libraries to make their voices heard. Comments are due on July 15, 2019