NTCA–The Rural Broadband Association conducted a member survey in August 2024 on how the potential disruption of Universal Service Fund (USF) support could affect rural consumers, broadband investment in rural America and the viability of existing rural broadband networks.
The survey was conducted following a July decision by the U.S. Court of Appeals for the Fifth Circuit which found the system for contributions to the federal USF unconstitutional. More than 200 of NTCA’s broadband provider members from 35 states responded to the survey, which found that rural Americans’ broadband rates could skyrocket, broadband network investments could drop and that there is substantial potential for default on outstanding network construction loans if USF support is eliminated.
Although the Fifth Circuit’s decision has no immediate impact on federal USF support pending Supreme Court review, and while NTCA is hopeful that the Supreme Court will overrule the Fifth Circuit consistent with its precedent and the decisions of other federal circuit courts, this survey examines potential impacts on the mission of universal service if further judicial proceedings were to disrupt the collection of USF contributions.
The survey’s key findings are:
- Respondents reported receiving an average of $72 per month per broadband subscriber in USF support to help recover their invested capital, repay loans and cover operating expenses.
- Sixty-eight percent of respondents said they would need to cancel deployment projects next year equaling over $1 billion, representing nearly 80% of planned investments for 2025.
- Similarly, 71% of respondents indicated they would need to cancel 2026 deployment projects, equaling nearly $900 million and representing nearly 83% of these companies’ planned investments for 2026.
- And 67% of respondents said they have outstanding debt for prior broadband network deployments, including loans from the U.S. Department of Agriculture, some of which could be at risk if USF were eliminated.
The exact impact on any rural provider or any rural community would of course differ depending on how a provider tried to address the loss of USF support in the wake of an adverse court decision. The survey results overall, however, underscore that rural Americans ultimately will pay the price through a mix of materially higher broadband rates and materially worse broadband access, and that the negative ripple effects of such a ruling would also affect providers, capital markets, and even the federal budget.
Visit www.ntca.org/universalservice to learn more.