The Regulation

• The FCC collects mandatory "contributions" from providers of interstate telecommunications services to subsidize rural telephone companies, phone service for low-income households, communications services for rural health care facilities, and Internet access for schools and libraries.
• The FCC has sought comment on a variety of administrative issues, including performance measures.

Our Findings

• As established in the Telecommunications Act of 1996, universal service programs are based on three assumptions:
  • Universal service programs cause affordable access to communications services.
  • Affordable access causes an increase in subscription or connectivity.
  • Increased subscription or connectivity improves economic, social, educational, and health outcomes.
• Effective performance measures should tell use whether these three things are occurring.

Our Recommendations

• The FCC should immediately develop performance measures that show how universal service programs have affected access, affordability, and connectivity to communications services.
• Over the longer term, the FCC should measure the extent to which universal service programs improve economic, social, educational, and health outcomes.
• In all cases, the FCC should assess the extent to which the universal service programs have actually caused the observed changes in the performance measures.