AT&T Says Tech Giants Should Fund Rural Broadband

AT&T chief executive John Stankey on Monday said US tech giants should be forced to contribute to the country’s subsidy programme that helps lower-income households access telephone and broadband services, after the programme used by 23 million people ran out of money last month and was forced to shut down.

Stankey told a telecom industry forum in Utah that the Federal Communications Commission should be given the power to require large tech companies to contribute to the fund, Reuters reported.

“The seven largest and most profitable companies in the world built their franchises on the internet and the infrastructure we provide,” he said.

“Why shouldn’t they participate in ensuring affordable and equitable access to the services of today that are just as indispensable as the phone lines of yesteryear?”

Funding

The Universal Service Fund’s annual expenditure of about $8 billion (£6.3bn) is currently almost entirely paid for by levies on telephone bills.

Congress has allocated about $17bn since 2020 to help lower-income families and people affected by Covid-19 to access telephone and broadband services.

The White House urged Congress to allocate an additional $6bn to the fund but was unsuccessful, forcing the programme to shut down.

The fund provides funding for low-income consumers, schools, libraries and rural health care providers.

Several proposals currently in Congress could force contributions to the fund from broadband providers or online companies such as Facebook parent Meta Platforms and Google.

Rural rip-and-replace

The lack of financing for the USF adds to the financial woes for providers of telecoms and broadband services in US rural areas.

In 2020 the FCC barred domestic telecoms providers from accessing the fund to purchase or maintain equipment from China’s Huawei or ZTE, as part of an effort to force companies to remove the companies’ gear.

The federal government provided a $1.8bn fund to finance the cost of replacing the gear, but carriers, mostly in rural areas, said the project was likely to cost them some $5.6bn.