August 20, 2026

Dear Member of Congress,

The Council for Citizens Against Government Waste (CCAGW) has long been concerned with the Universal Service Fund (USF) and appreciates the efforts being made by the USF Working Group to reform and improve the program.  On behalf of the more than one million members and supporters of CCAGW, I offer the following comments on USF reform.

The sources for USF funding are landlines and interconnection fees, which are rapidly decreasing.  The current contribution factor is 38.8 percent of end user revenues which is higher than the top federal marginal tax rate of 37 percent and appears on consumers’ phone bills as a line item under “Taxes and Fees.”  One of the items under consideration by the USF Working Group is the expansion of funding sources to include online platforms and service providers, constituting a “broadband tax.”  CCAGW opposes this concept.

Broadband costs have decreased and service has improved, unlike many other goods and services across the country.  US Telecom’s 2026 Broadband Pricing Index revealed that broadband prices dropped for the 11th straight year, while average download speeds decreased by 145 percent since 2014 and upload speeds increased by approximately 95 percent.  A broadband tax would increase costs and impact the improvements in service.

The states are starting to receive their share of the $20.15 billion being distributed through the Broadband Equity Access and Deployment (BEAD) program.  Given the size and scope of that funding, and other federal broadband programs, Congress should determine whether the USF programs are necessary.

If Congress decides that the USF should be continued, funding the program through the appropriations process would increase accountability and transparency and give Congress more ability to conduct much needed oversight over a currently unrestricted and unaccountable federal entity.

I urge you to avoid expanding the contribution factor end users to include online platforms and broadband service providers, which would create a broadband tax and increase costs to consumers to access and use the internet.  Thank you for the opportunity to share the views of CCAGW’s members and supporters.  I am happy to further discuss the USF reform process as you move forward with drafting legislation.

Sincerely,

Tom Schatz
President, CCAGW