Lowering Broadband Costs for Consumers Act of 2025
- Sponsor
- Sen. Mullin, Markwayne [R-OK]
- Committees
- Commerce, Science, and Transportation Committee (primary)
- Last action
- May 7, 2025
Bottom line
This bill seeks to modernize the Universal Service Fund by requiring large internet companies to contribute to its funding, potentially reducing the burden on traditional telecom consumers and enhancing support for broadband deployment in underserved regions.
What it actually does
This bill mandates the Federal Communications Commission (FCC) to reform the Universal Service Fund (USF) by expanding its contribution base to include broadband providers and a broad range of "edge providers" (e.g., streaming services, social media, search engines), with specific exemptions for smaller entities. It also directs the FCC to establish a new high-cost program mechanism to provide predictable support for broadband providers serving high-cost areas, aiming to ensure universal broadband access.
Proponents argue
Proponents argue that this bill will modernize the USF by requiring large internet companies that significantly benefit from broadband infrastructure to contribute to its upkeep, thereby lowering costs for traditional telecom consumers and ensuring universal broadband access. They contend it addresses an outdated system where only traditional voice service providers bear the primary financial responsibility for universal service.
Opponents contend
Opponents might argue that expanding the USF contribution base to edge providers could lead to increased costs for those services, which would then be passed on to consumers in the form of higher subscription fees or advertising costs, effectively shifting the financial burden rather than reducing it. They may also raise concerns about the FCC's expanded regulatory authority over internet content and services.
The bill is short and relatively straightforward, allowing for a quick and thorough understanding of its core provisions and implications.
Section 2(b) amending Section 254(d) of the Communications Act of 1934
Universal Service Fund Contribution Base Expansion
This provision requires the FCC to conduct a rulemaking within 18 months to expand the Universal Service Fund (USF) contribution base. Currently, the USF is primarily funded by assessments on traditional voice telecommunications services. This bill mandates that broadband providers and "edge providers" (defined to include digital advertising, search engines, social media, streaming, cloud computing, messaging, videoconferencing, gaming, and e-commerce platforms) contribute to the USF on an equitable and nondiscriminatory basis.
Supporters argue
Supporters argue that this expansion is crucial for the long-term sustainability of the USF, as the traditional voice revenue base is shrinking. They contend that companies benefiting most from broadband infrastructure should contribute to ensuring universal access, thereby modernizing the funding mechanism and ensuring its continued viability.
Critics contend
Critics, particularly from the tech industry, might argue that these new contributions would be passed on to consumers through higher service fees or increased advertising costs, effectively becoming a new "internet tax." They may also argue that edge providers do not directly provide "universal service" and should not be subject to these fees.
Tradeoffs
The bill seeks to balance the need for a stable USF funding source with concerns about imposing new costs on internet services that could ultimately affect consumers. It also navigates the tension between traditional telecom regulation and the evolving digital economy.
Section 2(b)(3) amending Section 254(d) of the Communications Act of 1934
Exemptions for De Minimis Edge and Broadband Providers
This provision exempts certain smaller edge providers and broadband providers from the new USF contribution requirements. Specifically, an edge provider is exempt if it transmitted less than 3% of the estimated quantity of broadband data in the U.S. and earned less than $5 billion in U.S. revenue in the most recent year. Additionally, any provider (edge or broadband) whose revenue would result in a "de minimis" contribution level can be exempted by the FCC.
Section 2(c)
New High-Cost Program Mechanism
This section requires the FCC to establish a new mechanism within the Universal Service Fund's high-cost program within 18 months. This mechanism is designed to provide specific, predictable, and sufficient support to eligible telecommunications carriers (broadband providers) for expenses incurred in providing supported services in high-cost areas, to the extent these costs are not recovered through rates or other USF mechanisms. It also limits support to one eligible telecommunications carrier per area.
Section 2(d) and 2(e)
FCC Enforcement and Scope of Authority Clarification
This provision grants the FCC enforcement powers over the Act, using the same means and jurisdiction as provided under the Communications Act of 1934. It also clarifies that the purpose of the section is to direct the FCC to require USF contributions from edge and broadband providers and modify the high-cost program. Crucially, it states that nothing in the section provides the FCC with any *new* authority over broadband providers, or any authority over edge providers *other than* for USF contributions.
Clarifies that the Act does not grant the FCC any new authority over broadband providers, nor any authority over edge providers beyond requiring Universal Service Fund contributions.
Section 2(e)(2)
Why it matters:This is standard legislative practice to explicitly limit the scope of new authority, often included to address concerns about regulatory overreach and garner broader support from industries that might otherwise oppose the bill.
Case for: Supporters argue this clause provides crucial guardrails, ensuring the FCC's new powers are strictly confined to USF funding and do not extend to broader internet regulation, thereby protecting innovation and free speech online.
Case against: Critics might argue that such explicit limitations could hinder the FCC's ability to adapt to future market changes or address unforeseen issues related to broadband and edge providers, potentially creating regulatory gaps or making future necessary adjustments more difficult.
Estimated impact: Significant in defining the long-term regulatory landscape for broadband and edge providers, potentially preventing future legal challenges regarding FCC jurisdiction and limiting the scope of future regulatory actions.