ICLE Comments to the FCC on High-Cost Universal Service Support Programs
I. Introduction and Overview
The International Center for Law & Economics (ICLE) submits these comments in response to the Federal Communications Commission’s (FCC) notice of proposed rulemaking on modernizing the high-cost program.[1] ICLE is a nonprofit, nonpartisan research center that applies law & economics to public policy. Its work promotes sound economic analysis and consumer welfare, particularly in dynamic, technology-driven markets such as telecommunications.
The Commission asks what should become of three legacy support mechanisms: Connect America Fund Broadband Loop Support (CAF BLS), High-Cost Loop Support (HCLS), and the expiring Alternative Connect America Cost Model (A-CAM) programs. The shift to Internet Protocol (IP)-based networks has sharply reduced their relevance. Unsubsidized competitors now offer qualifying service to most locations these programs support, while low-Earth-orbit (LEO) satellites can reach nearly all the rest.[2] Congress also has committed $42.5 billion through the Broadband Equity, Access, and Deployment (BEAD) Program to serve remaining unconnected areas. Meanwhile, lower-cost IP infrastructure continues to displace the copper and time-division multiplexing (TDM) networks that these legacy subsidies sustain.[3]
The Commission should wind down CAF BLS and HCLS and allow the A-CAM programs to expire on schedule, without extension or replacement. Doing so would reduce annual high-cost spending by roughly $1.6 billion. Competition, technological advances, and other federal programs have eliminated the need for much of that support.
This proceeding must weigh the benefits of continued support against the programs’ full costs, rather than cataloging benefits alone. Consumers fund every dollar through a surcharge on their bills that has climbed to 38.8% of assessable revenue.[4] Support for areas the market can serve more efficiently also discourages the private investment and competition that could serve those areas without subsidies.
Against those mounting costs, the programs’ benefits have narrowed to a small and shrinking residual. Support is redundant where competitors already provide service, duplicative where other federal programs are funding new networks, and concentrated in legacy voice service that consumers continue to abandon.
The principal objections in the record do not justify preserving these programs. LEO satellite service provides a functional substitute for legacy service in precisely the sparse, high-cost areas at issue, where capacity constraints are least likely to bind.[5] Claims that ongoing operating costs require perpetual support fare no better. They mistake the cost of maintaining obsolete infrastructure for an unavoidable cost of serving rural communities.
II. Continued Support Must Be Judged by Its Current Costs
Every subsidy entails a tradeoff. The central question here is not whether high-cost support has produced benefits, but whether those benefits still justify the costs of continuing it.[6] A subsidy may make economic sense when a genuine market failure prevents private investment from reaching customers who value service above its cost.[7] Without such a failure, subsidies distort investment, encourage rent-seeking, and often miss their intended beneficiaries.[8]
Subsidies also replace the decentralized decisions of consumers and investors with an administrative judgment about who should build and operate a network. The government finances that intervention by taxing the same market activity that could support further expansion. The FCC should therefore weigh the benefits of continued support against the deployment, competition, and consumer welfare that those subsidies crowd out.
Commenters seeking to preserve the programs identify real benefits, but they define the need for support by reference to network costs rather than a continuing market failure.[9] NTCA–The Rural Broadband Association (NTCA) calls high-cost support an “ideal public-private partnership” that must continue so carriers can “maintain service, repay loans, and keep rates affordable.”[10] The National Rural Electric Cooperative Association (NRECA) asks the Commission to create a “new program to support ongoing operating costs.”[11] The Blooston Rural Carriers urge the Commission to measure sufficiency against “the cost of operating a network, and not just the cost of building one.”[12]
Each proposal severs support from the condition that justifies it. Every network has operating costs, and every carrier would prefer a subsidy. If operating costs alone warrant support, the subsidy has no logical endpoint. A program designed to correct a market failure instead becomes a permanent entitlement, regardless of whether the failure persists.
Support also can suppress market expansion once unsubsidized providers begin reaching an area. A subsidized incumbent with assured cost recovery competes on terms that an unsubsidized entrant cannot match. Investors respond by deploying capital elsewhere.[13] Each additional year of support in an area open to competition deters entry, directs capital toward incumbents rather than expansion, and requires consumers to fund a transfer whose original justification may have disappeared.
That asymmetry makes a simple catalog of benefits inadequate. A subsidy’s benefits are concentrated and readily observed. Its costs are dispersed and harder to measure: surcharges on consumers, networks that competitors never build, capital unavailable for more productive investments, and the lower prices and better service that foreclosed competition might have delivered. An evaluation that counts only what the subsidy sustains will systematically favor continued support because the investment it discourages never appears in the record. Sound economic analysis must account for both.
The Commission should therefore ask whether the market failure that once justified support still exists in each area receiving it. Where no such failure remains, continued support sacrifices deployment, competition, and consumer gains that the market could otherwise deliver—and charges consumers to do so. The Commission must evaluate that present tradeoff, not the undisputed value of support provided in the past.
III. Legacy Support No Longer Justifies Its Costs
The Communications Act incorporates the same economic principle. Section 254 requires universal-service support to be “sufficient,” while the Commission has long treated “minimizing the universal service contribution burden on consumers and businesses” as a goal equal to expanding service.[14] The Commission must therefore weigh benefits against costs, not examine benefits in isolation.
For each legacy high-cost mechanism, the relevant question is whether continued support produces service that the market would not otherwise provide. That benefit must justify both the surcharges imposed on consumers and the harm to competition and private investment. The answer increasingly is no. Competitors and new technologies already serve many supported locations, other federal programs fund deployment in many others, and some legacy support sustains voice and copper infrastructure that consumers and carriers are leaving behind.
The appropriate transition should reflect each program’s structure and recipients’ reasonable expectations. The Commission should promptly wind down the open-ended HCLS and CAF BLS mechanisms, which impose no prospective deployment obligations. It should allow the fixed-term A-CAM programs to expire as scheduled without extension or replacement. That approach would lower consumer costs, remove barriers to private investment, encourage modern network deployment, and end legacy support on a predictable schedule.
A. Legacy Support Raises Costs and Distorts Competition
Extending legacy programs beyond their useful lives imposes two principal costs. Consumers bear the first. The Commission finances the high-cost program through universal-service contributions assessed on interstate and international telecommunications revenue. Because providers generally recover those contributions through surcharges on customers’ bills, preserving unnecessary support increases the fees consumers pay.[15]
The market bears the second cost. Subsidizing incumbents in areas that competitors and new technologies can serve discourages the entry and private investment that could deliver service without public support.[16] A subsidy intended to correct a market failure can thereby suppress the competition that would eliminate the need for it.
1. Unnecessary Support Raises Consumers’ Bills
Mandatory contributions from telecommunications providers fund the Universal Service Fund (USF). Providers generally recover those contributions through line-item surcharges on customers’ bills. As ICLE has explained, the contribution factor is “essentially a tax on consumer phone bills” and, at its current level, “has become one of the largest hidden taxes on American telecommunications consumers.”[17] The factor reached 38.8% in the third quarter of 2026, up from 37% in the second quarter. That rate approaches two-fifths of assessable interstate and international telecommunications revenue.[18]
The contribution factor rises when required disbursements increase or the assessable revenue base contracts. That base consists largely of legacy interstate telecommunications revenue, which has declined for two decades. If the Fund’s obligations remain fixed or increase while assessable revenue falls, the contribution factor must continue rising.
The Commission has two ways to relieve that pressure. It can change how it raises money through contribution reform, or it can reduce how much the Fund spends through distribution reform. Reducing unnecessary disbursements offers the more direct and less distortionary approach. It eases pressure on the shrinking contribution base without extending assessments to additional services or providers.[19]
Reducing disbursements also may lessen demands for contribution reforms that would burden consumers elsewhere. Proposals to broaden the assessment base often target broadband service or large online content and application providers, sometimes called edge providers.[20] Such reforms would relocate the assessment rather than reduce it, imposing new costs on the broadband services and internet applications that consumers increasingly use.
The Commission should therefore address unnecessary distributions before expanding the contribution base. Contribution reform undertaken first would preserve a large Fund and spread its costs across more services, entrenching the underlying expense. Phasing out legacy high-cost support would instead reduce the Fund’s obligations, ease consumers’ burden, and diminish pressure to impose new assessments—all “without imposing new burdens on the broadband networks and services that consumers and the broader economy increasingly rely upon.”[21] Cutting unnecessary disbursements reduces consumers’ costs. Expanding the contribution base merely changes where those costs appear.
2. Legacy Subsidies Deter Competition and Investment
Broadband support should complement private investment. The Commission therefore should avoid subsidizing areas that private providers already serve or would serve without support.[22] Subsidies in those areas can encourage duplicative construction, depress private returns, and redirect capital away from network expansion.[23] The resulting harm continues as long as public support distorts investment decisions.
A provider assured of federal cost recovery can compete on terms that unsubsidized rivals cannot match. Investors respond by deploying capital in markets where they do not face subsidized competition.[24] Support in areas already served by unsubsidized providers therefore distorts competition and weakens private providers’ incentives to invest, potentially reducing total investment through crowding out.[25]
The deterred competitor need not already serve the area when the Commission calculates support. The prospect of competing against a subsidized incumbent can prevent entry before it occurs.[26] The subsidy may then appear justified simply because no competitor has entered, even though the subsidy itself helped keep that competitor away.
The Commission should protect competition, not particular competitors. Universal service aims to ensure that consumers receive service, not to preserve any incumbent’s revenue or market position. Yet commenters seeking to retain the legacy programs often frame support as necessary specifically to sustain particular carriers and networks.[27] That approach elevates the recipient over the statutory objective. Where the market can provide service, protecting an incumbent from competition undermines the competitive process. Subsidized overbuilding also can allow favored providers to benefit from infrastructure investments that unsubsidized rivals have already made.
LEO satellite broadband illustrates the market’s ability to reach even the most difficult locations. LEO service is “uniquely equipped to reach many of the remaining unserved areas in the United States, especially rural, remote, and other hard-to-reach locations that are difficult to service through traditional terrestrial means.”[28] Those are precisely the locations once assumed to depend exclusively on subsidized incumbents.
LEO service also “has dramatically expanded the geographic reach of high-speed internet access.” Starlink has been “made available to all locations in the United States,” while satellite and other technologies “now offer robust competition in areas previously served by, at most, one or two fixed-broadband providers.”[29] The Notice confirms that nearly all supported locations lacking a terrestrial connection at 100 megabits per second downstream and 20 megabits per second upstream—known as 100/20 Mbps service—already appear served by an LEO provider at that speed.[30] The Commission’s latest Section 706 Report likewise finds that LEO service meets the 100/20 Mbps benchmark for advanced telecommunications capability and reaches 99.7% of Americans.[31]
That expansion occurred without high-cost support. LEO investment represents the unsubsidized entry that continued support for legacy incumbents may deter. The private sector has already reached these markets. Continuing to subsidize incumbents against that competition would charge consumers to weaken the very entry that is closing the digital divide.
B. Legacy Support Delivers Diminishing Benefits
A subsidy’s benefit is the additional service that exists because of the subsidy and would not exist without it.[32] By that measure, these legacy programs deliver small and shrinking benefits because modern IP networks already serve many supported locations. NCTA–The Internet & Television Association (NCTA) notes that recent federal broadband funding generally finances fiber or hybrid networks capable of operating for a decade or longer without further support. Continuing high-cost subsidies in those areas buys little or no additional connectivity.[33] The Information Technology and Innovation Foundation likewise concludes that the programs “have achieved their original objectives” and that market changes have “substantially reduced the policy rationale for continuing them.”[34] Where qualifying service already exists, another subsidy purchases redundancy rather than universal service.
Support can even produce negative benefits when it discourages network upgrades. Subsidies tied to legacy operations encourage carriers to retain TDM and copper infrastructure rather than transition to more efficient IP networks.[35] IP networks offer greater reliability, higher call quality, and more effective robocall mitigation. Delayed transitions leave customers with outdated technology that cannot meet modern needs.[36] Subsidizing aging infrastructure also weakens carriers’ incentives to replace it, raises maintenance costs, and diverts investment from next-generation services.[37] Support intended to benefit rural consumers can therefore leave them on inferior networks longer than market forces would.
Much of this support does not fund future deployment. CAF BLS and HCLS impose no prospective buildout obligations, so their funding secures no new construction. It reimburses costs for networks already built.[38] More than one-quarter of CAF BLS—roughly $250 million—subsidizes traditional voice-only service. All $202 million in HCLS supports legacy voice loops without any deployment obligation.[39]
Consumers are rapidly abandoning those services. Switched-access lines now account for a small fraction of voice connections as households move to mobile service and interconnected Voice over Internet Protocol (VoIP). Mobile voice service is available at essentially every supported location.[40] Continued subsidies for a declining service that consumers are leaving deliver little incremental benefit.
Other federal programs further reduce that benefit. Where the BEAD Program, Enhanced A-CAM, or another enforceable commitment requires deployment of 100/20 Mbps broadband, additional legacy support adds little universal-service value and duplicates public spending.[41] The incremental benefit approaches zero when an unsubsidized competitor already serves a location, a satellite provider offers 100/20 Mbps service, and BEAD will fund another network—yet the cost of the legacy subsidy continues.
These programs now provide benefits that are narrow and declining. Their support is redundant where competitors already serve consumers, duplicative where other programs fund deployment, and concentrated in legacy voice service that consumers are abandoning. At the margin, it also discourages the upgrades that would improve rural service. The record therefore supports a rapid phaseout that frees consumers and carriers from continued investment in networks the market is replacing.
C. Wind Down Support on a Predictable Schedule
The principles above apply to each program under review. The legacy rate-of-return mechanisms—HCLS and CAF BLS—reimburse carriers based on their costs but impose no prospective deployment obligations or end dates. They also create weaker reliance interests than the model-based programs and should be affirmatively wound down. The A-CAM programs already have defined expiration dates. The Commission should let them expire as scheduled and reject proposals to extend or replace them.
Eliminate High-Cost Loop Support first. HCLS presents the clearest case for elimination and should end on the shortest timeline. The program shifts cost recovery from the intrastate to the interstate jurisdiction to subsidize traditional switched-voice loops. It supports no new deployment. Annual support already has fallen from $741 million in 2015 to roughly $202 million as customers migrate to mobile and IP service.[42] HCLS buys no additional broadband, sustains infrastructure that newer IP networks are replacing, and weakens carriers’ incentives to retire aging equipment. It offers no prospective universal-service benefit that justifies preserving it. The Commission should sunset HCLS promptly.
Wind Down Connect America Fund Broadband Loop Support. CAF BLS is the largest program at issue. Although it supports broadband-capable loops as well as voice service, its structure no longer fits its purpose. Its only deployment obligation—providing service at 25 megabits per second downstream and 3 megabits per second upstream, or 25/3 Mbps—came due at the end of 2023 and has been satisfied. Continued support therefore secures no new construction and functions as open-ended cost reimbursement.[43] More than one-quarter of CAF BLS, roughly $250 million, subsidizes voice-only service. A large and increasing share also flows to locations that an unsubsidized competitor already serves.[44]
The Commission should place CAF BLS on a defined, declining schedule. It should first eliminate support for voice-only service and locations served by an unsubsidized competitor or covered by an enforceable deployment commitment. Support would then contract as competition and other federal programs reach additional locations instead of continuing indefinitely by default.
Allow A-CAM I to expire in 2026. Only nine carriers still receive A-CAM I support, totaling roughly $8 million annually, and the program will expire at the end of 2026.[45] The Commission should reject the Notice’s proposal to extend it through 2028 merely to align its expiration date with other A-CAM programs. Administrative symmetry does not justify two additional years of support absent evidence that the subsidy remains necessary. Allowing A-CAM I to expire as scheduled honors the terms its recipients accepted and ends the program as designed.
Allow revised A-CAM I and A-CAM II to expire in 2028 without replacement. Revised A-CAM I and A-CAM II provide roughly $166 million and $218 million, respectively, to 71 carriers each. Both programs will expire at the end of 2028.[46] Recipients accepted fixed support for a defined period in exchange for deployment obligations. The Commission should honor those terms by allowing support to continue through 2028 and then end on the schedule carriers have long expected.
The Commission should reject proposals to replace these programs with a new, ongoing model-based support stream.[47] Such a program would convert fixed-term support into the kind of open-ended entitlement this proceeding should retire. Letting the existing programs expire provides an orderly phaseout, respects legitimate reliance interests, and avoids renewing the underlying subsidies.
This sequence would produce a rapid but orderly wind-down. HCLS would end first because it has the weakest justification. CAF BLS would decline on a defined schedule, and the A-CAM programs would conclude on the dates their recipients already anticipate. Together, these steps would eliminate roughly $1.6 billion in annual support that competition, new technology, and other federal programs have overtaken, without disrupting fixed-term commitments midstream.[48]
IV. LEO Satellite Is a Viable Substitute in High-Cost Areas
Several commenters urge the Commission to disregard satellite broadband because they do not consider it a genuine substitute for subsidized terrestrial networks. NRECA asks the Commission to abandon technological neutrality—the principle of applying the same standards regardless of transmission technology—and count only terrestrial service.[49] NTCA argues that no LEO operator currently meets universal-service standards because of limitations involving capacity, consistency, and voice service.[50] Both objections rest on the concern that a shared satellite network cannot reliably deliver benchmark performance to every subscriber.
That concern warrants scrutiny, but capacity constraints matter most when providers oversubscribe service in densely populated areas. Starlink can reliably meet the 100/20 Mbps benchmark in areas with fewer than roughly seven serviceable locations per square mile.[51] High-cost areas, by contrast, “are largely those in hard-to-reach, rural, remote areas.” They are costly to serve precisely because they are “sparsely populated.”[52] That explains why 85% of Starlink subscribers live in rural areas and why LEO systems “may be their best option available for the foreseeable future” in “remote and hard-to-reach areas.”[53] The capacity objection is therefore strongest in dense areas that generally do not receive high-cost support and weakest in the sparse areas that do.
The remaining objections do not alter the analysis. Voice is an IP application that can operate over a LEO broadband connection without a separate circuit-switched network. The absence of legacy carrier-grade voice reflects the technology’s modern architecture, not an inability to provide voice service.
LEO subscription prices also are “comparable to other rural provider costs,” and competition among satellite, wireless, and terrestrial providers should constrain them further. Where price limits adoption, the Commission should provide targeted aid to consumers in the highest-cost areas rather than continue subsidizing obsolete networks. Such demand-side support would address affordability directly without preserving a less efficient technology.
V. Legacy Operating Costs Do Not Justify Permanent Support
The strongest argument for preserving these programs concerns operating costs rather than deployment. It assumes that the cited costs are inherent in serving rural areas. Much of the burden instead comes from the aging copper and TDM infrastructure that continued subsidies keep in service. The appropriate benchmark is the cost of operating the IP networks that will replace it.
IP infrastructure costs substantially less to operate than legacy plant. Copper degrades over distance and relies on energy-intensive repeaters and TDM switches distributed throughout neighborhoods. Fiber carries data as pulses of light over largely passive infrastructure, lowering maintenance and energy costs while reducing the need for centralized switching facilities and related real estate.[54] Verizon’s migration of 4.5 million circuits to fiber, for example, produced roughly $180 million in annual savings, reduced maintenance dispatches by about 60%, and allowed the company to retire dozens of central offices.[55] Fiber also uses less electricity because it eliminates TDM switches and neighborhood electronics. It also relies less on the shrinking pool of technicians trained to maintain legacy copper.[56]
The operating burden cited by commenters is therefore neither fixed nor unavoidable. It largely reflects the cost of maintaining infrastructure that carriers should be retiring. Treating that expense as an inherent cost of rural service would lock the program into financing the inefficiencies created by obsolete technology.
These networks will transition to IP regardless of the outcome here. The BEAD Program and Enhanced A-CAM already require modern 100/20 Mbps networks designed to operate for a decade or longer without continuing support. Consumers are abandoning legacy switched networks, and the Commission has made the IP transition a policy priority. Subsidizing legacy operating costs gives carriers an incentive to delay the modernization that would reduce those costs. The subsidy then preserves the high-cost structure invoked to justify further subsidies.
The Commission should decline to transform transitional deployment support into a permanent operating subsidy. Phasing out support would accelerate the move to lower-cost IP infrastructure that the market and federal deployment programs are already delivering. Universal service will become more sustainable when policy stops financing the networks that make it unnecessarily expensive.
VI. Conclusion
The Commission should wind down the legacy high-cost mechanisms rather than preserve or replace them. The record and the Commission’s data show that unsubsidized terrestrial competitors and LEO satellites now reach the overwhelming majority of supported locations. The BEAD Program and Enhanced A-CAM are funding modern networks in many remaining areas. Meanwhile, lower-cost IP infrastructure continues to replace the copper and TDM networks that legacy support sustains.
These programs now provide little incremental service. Support is redundant where competitors already operate, duplicative where other federal programs fund deployment, and concentrated in legacy voice service that consumers are abandoning. It also raises consumers’ bills, discourages private investment, and gives carriers an incentive to retain costly infrastructure. The 38.8% contribution factor makes those tradeoffs impossible to ignore. The Commission should measure each program by the service it adds, not the network it preserves.
The Commission should eliminate HCLS on the shortest feasible timeline, place CAF BLS on a defined and declining schedule, and allow the A-CAM programs to expire under their existing terms without extension or replacement. This sequence would respect legitimate reliance interests while removing roughly $1.6 billion in annual obligations that competition, technological change, and other federal programs have overtaken.
Reducing unnecessary disbursements would directly ease pressure on the USF and the consumers who finance it. Where genuine affordability gaps remain, targeted consumer support offers a better response than permanent subsidies for obsolete networks. Universal service will endure only if the Commission allows its programs to end when their work is done.
[1] Reforming the High-Cost Program for an All-IP Future, Notice of Proposed Rulemaking, WC Docket Nos. 26-96 & 10-90, ¶ 33 (rel. May 21, 2026) [hereinafter High-Cost NPRM].
[2] Id. ¶ 31.
[3] Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, div. F, tit. I, § 60102(b)(2), 135 Stat. 429, 1184 (2021).
[4] Proposed Third Quarter 2026 Universal Service Contribution Factor, Public Notice, DA 26-546, CC Docket No. 96-45 (rel. June 12, 2026), https://docs.fcc.gov/public/attachments/DA-26-546A1.pdf.
[5] LEO Policy Working Group, Low Earth Orbit Satellites: Policies to Promote Spectrum Sharing, Foster Competition, and Close Digital Divides 75–76 (Int’l Ctr. for L. & Econ. 2025), https://laweconcenter.org/resources/low-earth-orbit-satellites-policies-to-promote-spectrum-sharing-foster-competition-and-close-digital-divides-a-report-of-the-leo-policy-working-group.
[6] See Kristian Stout & Ben Sperry, Guiding Principles & Legislative Checklist for Broadband Subsidies (Int’l Ctr. for L. & Econ. 2022), https://laweconcenter.org/resources/guiding-principles-legislative-checklist-for-broadband-subsidies.
[7] Jonathan E. Nuechterlein & Howard Shelanski, Building on What Works: An Analysis of U.S. Broadband Policy, 73 Fed. Commc’ns L.J. 219, 257 (2021).
[8] Kristian Stout, Infrastructure Is Destiny: The Geography of the Next Technology Race 19 (Int’l Ctr. for L. & Econ. 2026), https://laweconcenter.org/resources/infrastructure-is-destiny-the-geography-of-the-next-technology-race.
[9] See, e.g., Comments of NTCA–The Rural Broadband Association, Reforming the High-Cost Program for an All-IP Future, WC Docket Nos. 26-96 & 10-90 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069420/1 [hereinafter NTCA Comments]; Comments of the National Rural Electric Cooperative Ass’n, WC Docket Nos. 26-96 & 10-90 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069460/1 [hereinafter NRECA Comments]; Comments of the Blooston Rural Carriers, WC Docket Nos. 26-96 & 10-90 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069494/1 [hereinafter Blooston Comments].
[10] NTCA Comments, supra note 9, at i.
[11] NRECA Comments, supra note 9, at 4–5.
[12] Blooston Comments, supra note 9, at 2.
[13] T. Randolph Beard, George S. Ford, Lawrence J. Spiwak & Michael Stern, The Law and Economics of Municipal Broadband, 73 Fed. Commc’ns L.J. 1, 10 (2020), http://www.fclj.org/wp-content/uploads/2020/09/MunicipalBroadbandArticleFINAL.9.2.20.pdf (“Entry by a subsidized . . . firm . . . reduces the incentives of private firms to invest in modern communications infrastructure . . .. [E]ither the municipal entrant will fail or a private provider will exit or materially reduce its investments.”).
[14] 47 U.S.C. § 254(b)(5), (e); Connect America Fund, Report and Order and Further Notice of Proposed Rulemaking, WC Docket No. 10-90, ¶ 17 (2011), https://docs.fcc.gov/public/attachments/FCC-11-161A1.pdf.
[15] High-Cost NPRM, supra note 1, ¶ 6.
[16] See Stout & Sperry, supra note 6 (arguing that broadband support should “work in tandem with private investment” because subsidizing already-served areas risks “overbuilding in ways that can depress returns to incumbent providers”); Ben Sperry, Doublespeak in the Debate About Rural Broadband Buildout, Truth on Mkt. (Aug. 6, 2020), https://truthonthemarket.com/2020/08/06/doublespeak-in-the-debate-about-rural-broadband-buildout (explaining that government-subsidized entry “can discourage private investment and grow the size of the ‘donut hole,’ . . . leading to demand for even greater subsidies”).
[17] Jeffrey Westling, The Lifeline Program’s Afterlife Problem, Truth on Mkt. (May 6, 2026), https://truthonthemarket.com/2026/05/06/the-lifeline-programs-afterlife-problem.
[18] Proposed Third Quarter 2026 Universal Service Contribution Factor, supra note 4; Proposed Second Quarter 2026 Universal Service Contribution Factor, Public Notice, DA 26-218, CC Docket No. 96-45 (rel. Mar. 16, 2026).
[19] Comments of the Int’l Ctr. for L. & Econ., Reforming Legacy Rules for an All-IP Future & Accelerating Network Modernization, WC Docket Nos. 25-311 & 25-208, at 7 (filed May 22, 2026), https://laweconcenter.org/resources/icle-comments-to-the-fcc-on-accelerating-network-modernization [hereinafter ICLE Network Modernization Comments].
[20] Id. at 7–8.
[21] Id. at 8.
[22] Stout & Sperry, supra note 6.
[23] Id.
[24] See Beard et al., supra note 13, at 10 (“[T]he asymmetric subsidization of . . . entrants . . . reduces the incentives of private firms to invest”); cf. Richard A. Epstein, The Assault That Failed: The Progressive Critique of Laissez Faire, 97 Mich. L. Rev. 1697, 1714 (1999), https://repository.law.umich.edu/mlr/vol97/iss6/22 (arguing that rational actors will not “make private investments” where “the state could launch a competitor nearby . . . with a handsome government subsidy”).
[25] Comments of the Int’l Ctr. for L. & Econ. & TechFreedom, Connect America Fund, WC Docket No. 10-90, RM-11703, at 9 (filed Sept. 26, 2013), https://www.fcc.gov/ecfs/document/6017468701/1 [hereinafter ICLE CAF Comments].
[26] See Epstein, supra note 24, at 1714.
[27] See, e.g., NTCA Comments, supra note 9, at 21.
[28] LEO Policy Working Grp., supra note 5, at 70.
[29] Comments of the Int’l Ctr. for L. & Econ., Safeguarding and Securing the Open Internet, WC Docket No. 23-320, at 16–17 (filed Dec. 14, 2023), https://laweconcenter.org/wp-content/uploads/2023/12/ICLE-Comments-on-2023-FCC-Title-II-NPRM.pdf.
[30] See High-Cost NPRM, supra note 1, ¶¶ 18, 31.
[31] Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, 2026 Section 706 Report, GN Docket No. 25-223, FCC 26-55, ¶ 28 (2026).
[32] See ICLE CAF Comments, supra note 25, at 9 (arguing that universal-service support should “subsidize the construction of networks and the provision of services in parts of the country where doing so would otherwise be uneconomical”).
[33] Comments of NCTA–The Internet & Television Ass’n, Reforming the High-Cost Program for an All-IP Future, WC Docket Nos. 26-96 & 10-90, at 6–7 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069456/1 [hereinafter NCTA Comments].
[34] Comments of the Info. Tech. & Innovation Found., Reforming the High-Cost Program for an All-IP Future, WC Docket Nos. 26-96 & 10-90, at 1 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069402/1.
[35] ICLE Network Modernization Comments, supra note 19, at 9.
[36] Jeffrey Westling, Subsidizing Obsolescence: How FCC Rules Keep Copper Alive, Truth on Mkt. (Mar. 18, 2026), https://truthonthemarket.com/2026/03/18/subsidizing-obsolescence-how-fcc-rules-keep-copper-alive.
[37] Comments of the Int’l Ctr. for L. & Econ., Lifeline and Link Up Reform and Modernization et al., WC Docket No. 11-42 et al., at 8 (filed May 4, 2026), https://laweconcenter.org/wp-content/uploads/2026/05/Lifeline-Comments.pdf.
[38] See High-Cost NPRM, supra note 1, ¶¶ 3, 7.
[39] Id. ¶¶ 9–10 & n.15.
[40] Id. ¶ 32 & n.62.
[41] See, e.g., NCTA Comments, supra note 33, at 2–4; Comments of INCOMPAS, Reforming the High-Cost Program for an All-IP Future, WC Docket Nos. 26-96 & 10-90, at 1–2 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069447/1 (arguing that support should remain “targeted, accountable, and competitively neutral” and account for locations covered by enforceable Broadband Equity, Access, and Deployment or other commitments); Comments of WISPA–The Ass’n for Broadband Without Boundaries, WC Docket Nos. 26-96 & 10-90, at 2 (filed Aug. 4, 2026), https://www.fcc.gov/ecfs/document/26110069453/1 (arguing that the Commission should identify locations that lack 25/3 Mbps service and “are not subject to an enforceable commitment to deploy at least 100/20 Mbps” before maintaining support).
[42] High-Cost NPRM, supra note 1, ¶ 10.
[43] Id. ¶ 9 & nn.14–15.
[44] Id.
[45] Id. ¶ 12.
[46] Id. ¶ 14.
[47] See, e.g., NTCA Comments, supra note 9, at 34 (urging the Commission to “offer rural carriers an extended A-CAM program based on the successful Enhanced A-CAM” by 2028).
[48] High-Cost NPRM, supra note 1, ¶ 8.
[49] NRECA Comments, supra note 9, at 10.
[50] NTCA Comments, supra note 9, at 44.
[51] LEO Policy Working Grp., supra note 5, at 75.
[52] Id. at 76–77.
[53] Id.
[54] ICLE Network Modernization Comments, supra note 19, at 3.
[55] Eric Fruits & Brian Albrecht, Paying to Stand Still: Legacy Copper Mandates in a Fiber World 6 (Int’l Ctr. for L. & Econ. 2026), https://laweconcenter.org/resources/paying-to-stand-still-legacy-copper-mandates-in-a-fiber-world.
[56] Comments of the Int’l Ctr. for L. & Econ., Advancing IP Interconnection et al., WC Docket No. 25-304 et al., at 4 (filed Jan. 20, 2026), https://laweconcenter.org/wp-content/uploads/2026/01/ICLE-Comments-on-Advancing-IP-Interconnection.pdf.