Universal Service

Universal service is the United States federal government’s policy of ensuring access to a baseline level of telecommunications services for all consumers in the United States. The policy originated with the Communications Act of 1934. The Telecommunications Act of 1996 (1996 Telecom Act) expanded the scope of universal service from individual consumers to include rural health care facilities, schools, and libraries.

The goals of universal service, as mandated by the 1996 Telecom Act, are:

• to promote the availability of quality services at just, reasonable, and affordable rates.
• to increase access to advanced telecommunications services throughout the nation.
• to advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas.

With the 1996 Telecom Act, Congress directed the Federal Communications Commission (FCC) and states to take the steps necessary to establish support mechanisms to ensure the delivery of affordable telecommunications service to all Americans including low-income consumers, eligible schools and libraries, and rural health care providers.

In addition, the law states that all providers of telecommunications services should contribute to federal universal service in some equitable and nondiscriminatory manner; there should be specific, predictable, and sufficient federal and state mechanisms to preserve and advance universal service; all schools, classrooms, health care providers, and libraries should, generally, have access to advanced telecommunications services; and finally, that the Federal-State Joint Board and the FCC should determine those other principles that, consistent with the 1996 Telecom Act, are necessary to protect the public interest.

The universal service principles adopted by the Joint Board and FCC as the basis for universal service policies include:

• Quality and rates - Quality services should be available at just, reasonable, and affordable rates.
• Access to advanced services - Access to advanced telecommunications and information services should be provided in all regions of the nation.
• Access in rural and high cost areas - Consumers in all regions of the nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.
• Equitable and nondiscriminatory contributions - All providers of telecommunications services should make an equitable and nondiscriminatory contribution to the preservation and advancement of universal service.
• Specific and predictable support mechanisms - There should be specific, predictable and sufficient federal and state mechanisms to preserve and advance universal service.
• Access to advanced telecommunications services for schools, health care providers, and libraries - Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services.
• Competitive neutrality - Universal service support mechanisms and rules should be competitively neutral. In this context, competitive neutrality means that universal service support mechanisms and rules neither unfairly advantage nor disadvantage one provider over another, and neither unfairly favor nor disfavor one technology over another.

The FCC's policies and decisions on universal service, and USAC's administration of universal service collections and disbursements, rely on these guiding principles to make implicit mechanisms explicit in a competitively neutral way while preserving the goals of universal service.