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History Universal Service Fund

 

The Universal Service Fund 

The concept of the Universal Service Fund to subsidize the cost of the expansion of telecommunications services into rural America is not a new idea. Conceived in the late 1800’s by Theodore Newton Vail, one of AT&T’s most visionary Presidents who oversaw the building of the first American coast to coast telephone system as well as the creation of Bell Labs through his devotion to basic science, Vail’s idea would have to wait over 30 years to become a reality. With the passage of the Telecommunications Act of 1934 by congress subsidizing the expansion of telephone service into rural America became law although it was riddled with controversy and challenged for many years.

Some 60+ years later, although almost 95% of all households in the U.S. had telephone service, Congress determined that the technological gap between America’s urban and rural areas was expanding rapidly. These more advanced higher speed (broadband) telecommunications and internet services were basically non-existent in the rural parts of the country as the cost of providing them was as much as six times higher due to many factors such as distance and terrain. But the population in America was becoming more rural and the need for these high speed services such as ISDN, frame relay, and T-1, particularly in the areas of education and health care, was growing rapidly.

The passage of the Telecommunications Act of 1996 expanded the Universal Fund of 1934 by defining four programs; High Cost, Low Income, Rural Health Care, and Schools and Libraries. The Rural Health Care (RHCD) and Schools and Libraries (Erate) programs were a new concept in the distribution of funds through the Universal Fund establishing the creation a process whereby any eligible Rural Health Care or School/Library could directly submit a request for funding to subsidize their costs for eligible services determined by the FCC/USAC. As the programs began these new additions to the Universal Fund concept were also challenged in Congress due to the fact that many instances of impropriety occurred and the initial processes were flawed. With a tremendous amount of work on the part of the FCC and USAC as well as guidance from several supporting legislators, positive improvements have been made to the program.

It is the later two programs, Rural Health Care and Schools and Libraries that MiCTA has been involved in almost since their introduction in 1997 as the funding of these programs impacts those “eligible” segments of the MiCTA membership. MiCTA has worked with various state and federal agencies in the process of assisting eligible School, Library and Rural Health Care members by participating in training seminars aimed at assisting in the application process for both programs. MiCTA has also provided “help desk” support and “one on one” institutional training for its eligible member institutions.

MiCTA also provides multiple telecommunications vendor products and services pricing through a best practices, open, competitively bid MiCTA member evaluated and awarded process. MiCTA continues to work with USAC and the FCC in an attempt to enhance both the eligible services and application processes for both the Rural Health Care and the Schools and Libraries programs.