Published: June 10, 2025
By AGL Information and Technology Staff Writers
A bipartisan bill introduced in the U.S. Senate aims to reshape how broadband expansion is funded in the United States by modernizing the Universal Service Fund (USF). The “Lowering Broadband Costs for Consumers Act of 2025,” introduced on June 4 by Senator Ben Ray Luján (D-NM), proposes a significant change to the USF’s funding mechanism by requiring both broadband internet service providers (ISPs) and edge providers—such as Netflix, Google, and Amazon—to contribute to the fund.
The bill seeks to address long-standing sustainability issues with the USF, which currently derives most of its support from fees on traditional voice services, a shrinking segment of the telecommunications ecosystem. As broadband has become the dominant mode of communication, the bill reflects a growing consensus that the contribution base must evolve to reflect modern internet usage patterns.
A Shrinking Funding Base
The Universal Service Fund, administered by the Federal Communications Commission (FCC), supports four major programs: Lifeline, the High-Cost Program (now the Connect America Fund), the Schools and Libraries Program (E-Rate), and the Rural Health Care Program. These programs collectively aim to ensure that all Americans have access to essential communications services, especially in rural and underserved communities.
However, the funding mechanism has come under increasing strain. The contribution factor—the percentage of telecom revenues companies must pay into the fund—has risen dramatically in recent years, reaching 34.4% in Q1 2024. This has raised concerns over the fee’s regressive nature and its impact on consumers.
A 2022 report by the Government Accountability Office (GAO) concluded that the USF’s current framework is “unsustainable” and recommended that Congress consider alternative funding sources, including assessing fees on broadband revenues.
Key Provisions of the 2025 Bill
The proposed legislation includes three primary reforms:
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Expanding the Contribution Base: Both broadband service providers and edge providers—defined as digital platforms that use broadband to deliver content or services—would be required to contribute. This is intended to balance the burden across a broader segment of the digital economy.
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Limiting FCC Authority: The bill restricts the FCC’s authority to manage contributions and distributions only from broadband and edge providers, preventing the agency from expanding USF contribution mandates beyond what Congress defines.
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Supporting High-Cost Areas: It proposes new frameworks to ensure USF funding remains robust for high-cost, rural, and underserved areas, aligning with goals set under the Infrastructure Investment and Jobs Act and NTIA’s BEAD program.
Senator Luján emphasized the need for modernization: “This legislation reflects the reality that the internet ecosystem has changed dramatically since the USF was established. All players who benefit from broadband infrastructure should help support its continued expansion.”
Industry Reactions and Regulatory Debate
Reactions from the broadband industry have been mixed. The NTCA – The Rural Broadband Association expressed cautious support, noting that a broader contribution base could stabilize funding and lower the cost burden on rural telecoms and their customers. However, the Computer & Communications Industry Association (CCIA), representing many major edge providers, warned that such contributions could lead to higher costs being passed on to consumers.
FCC Chairwoman Jessica Rosenworcel has previously advocated for similar reforms. In a December 2023 speech, she said: “It’s time to future-proof the Universal Service Fund by bringing broadband providers into the fold. But doing so requires Congressional action.”
Public Knowledge, a nonprofit digital rights organization, applauded the bill for “taking a necessary step toward long-term sustainability. ” It urged that any contributions from edge providers be proportionate to their network usage and impact.
Broader Implications for the Digital Ecosystem
The proposed bill is one of several efforts in Congress aimed at restructuring federal broadband funding as internet access becomes increasingly vital to education, health care, and economic opportunity. It comes amid ongoing debates about network neutrality, broadband affordability, and the federal government’s role in ensuring universal access.
If passed, the legislation would mark the most significant change to USF governance in more than two decades and could set a global precedent for digital infrastructure financing. With new stakeholders at the table, questions around equitable contribution, transparency, and program oversight will take center stage.
The “Lowering Broadband Costs for Consumers Act of 2025” is pivotal in U.S. broadband policy. As technology evolves and traditional telecom revenue sources continue to shrink, the question is not whether the Universal Service Fund needs reform, but how best to structure it for the digital age. By expanding the funding base and refocusing authority, the bill offers a possible blueprint for sustaining universal service in an era of rapid connectivity transformation.
