Senate bill would add big tech firms to phone fund contributions

What does this do?

S 1651 would require the FCC to write new rules within 18 months expanding who must contribute to the Universal Service Fund, which supports affordable phone and internet service for rural areas, low-income households, schools, libraries, and hospitals. Large edge providers such as streaming, social media, search, cloud, gaming, app store, and e-commerce companies would be added as required contributors alongside traditional phone companies. Smaller companies and very small contributors from any category would be exempt.

Who does it affect?

Large tech companies and big internet service providers that carry at least 3 percent of all U.S. broadband data traffic and earned at least five billion dollars in U.S. revenue in the past year would face new contribution requirements. Traditional phone companies currently paying into the fund, everyday consumers, and rural and underserved communities would also be affected.

Why does it matter?

Spreading the contribution base across more large companies could reduce the fees currently passed on to consumers through their phone bills. The bill also directs the FCC to create a new support program for internet providers serving high-cost areas like rural communities, which could affect the stability and reach of broadband service in those regions.

What does it cost, and who pays?

The fund would be supported by a broader group of contributors, including large tech companies meeting the 3 percent broadband traffic and five-billion-dollar revenue thresholds. Consumer fees on phone and internet bills could decrease if costs are distributed across more large contributors.

Where does it stand?