Roslyn Layton featured in Washington Post on USF reform

It’s time to align who profits from the fund with who pays for it.

Roslyn Layton, PhD was featured in The Washington Post on August 18, 2025 in an article titled “The big problem with this aging $8 billion fund.” It examines the urgent challenges of broadband investment and the need to modernize connectivity policy for rural America so that the largest user and beneficiary of broadband—Big Tech—participates financially.

The piece highlights how seniors and low-income households are unfairly burdened by the outdated FCC Universal Service Fund (USF), whose landline-based assessments have grown tenfold since its inception. Meanwhile, the largest drivers of internet traffic—Big Tech’s data centers and ad-tech ecosystems—consume nearly two-thirds of America’s internet capacity without contributing to the fund that makes access possible for vulnerable communities.

Downstream broadband providers are required to build and maintain capacity to carry this traffic, much of it advertising and tracking that consumers never requested. Yet broadband providers cannot recover these costs under the current system.

Strand Consult’s report “Ending Big Tech’s Free Ride on USF: Reforming the Universal Service Fund to Serve Consumers and America”, cited in the article, underscores the imbalance in today’s system: Big Tech gains enormous economic value from broadband expansion without contributing to the fund that sustains it. For example, a rural household brought online in 2024 through the USF generates roughly $2,600 annually for platforms like Alphabet, Meta, and Amazon through advertising and data monetization. A rural business in these areas can spend up to $20,000 a year on cloud services, cybersecurity subscriptions, and digital advertising.

These figures highlight the structural mismatch: while eight major platforms drive more than 65% of fiber and cable traffic and nearly 70% of mobile traffic (as detailed in a report by AppLogic Networks) they pay little to nothing into the USF. In other words, consumers—especially seniors on landlines—foot the bill, while Big Tech reaps the profits.

I am especially grateful that this issue has been covered by The Washington Post, whose editorial staff and process represent the highest standards of journalism and the most rigorous review.

The time has come to modernize the USF so that the largest users and profiteers of the internet contribute fairly to sustaining universal connectivity for all Americans.

👉 Here is the text to the article.

The big problem with this aging $8 billion fund

By Roslyn Layton, PhD

Published August 18, 2025 in The Washington Post

It’s welcome news that Big Tech is investing billions in AI infrastructure. But before we celebrate this as a public good, we should ask a deeper question: Who’s really paying for the broadband networks that help make those AI investments profitable?

It’s true that data centers and chips are capital-intensive. But the purpose of these facilities is simple: to allow Alphabet, Meta, Amazon and other Big Tech platforms to push more ads, deliver more AI-created content and generate more traffic. Artificial intelligence enhances services with more video and personalized tech, so they become more data-heavy and consume more bandwidth. The resulting traffic floods downstream broadband networks — especially in rural areas — and creates significant unrecovered costs for broadband providers such as Oklahoma’s Chickasaw Telecom and Washington state’s Bigfoot Communications, which carry the data to end users. (Disclosure: Amazon founder Jeff Bezos owns The Post.)

The Big Tech platforms aren’t the ones footing the bill. That burden is increasingly falling on America’s aging Universal Service Fund, which since 1998 has supported broadband deployment in rural communities, low-income households, schools, libraries and hospitals. In 2025, the Federal Communications Commission will disburse more than $8 billion through this fund.

The fund is financed mostly by telephone subscriptions — many of them paid by seniors on fixed incomes. The more AI-generated traffic Big Tech sends down the pipe, the more costs are passed along to these landline users who don’t generate that traffic and don’t profit from it.

We’ve reached a tipping point. At the fund’s inception, the annual revenue stream of $65 billion from traditional telephone service was assessed a 3 percent surcharge, raising $1.6 billion for the fund. The surcharge is set by the Universal Service Administrative Co., a nonprofit that works with the FCC. As data show, the fund’s revenue pool has dwindled to approximately $24 billion, and this year, the surcharge rate is expected to reach 39 percent in the fourth quarter — a fee added to monthly landline bills. In 1998, telephone users paid a monthly fee of 90 cents; today it’s $9. Why? Because as revenue from landline service shrinks, the cost to build the broadband network capacity for services such as AI-generated advertising is expanding. The system is unsustainable, as Digital Progress Institute, a think tank, shows in a new report.

Meanwhile, Big Tech enjoys massive economic value from broadband expansion. Strand Consult documents that in 2024 a rural household brought online by the FCC service fund contributes about $2,600 annually to these companies via the ad monetization of their personal data and other digital services. A rural business connecting in a service fund area can pay $20,000 a year in cloud services, cybersecurity subscriptions and digital advertising spend. These figures make clear who’s reaping the profits of universal connectivity — and it’s not the consumer footing the monthly fund surcharge.

There’s a structural mismatch here. The companies driving the majority of broadband traffic — eight platforms that account for about 65 percent of fiber and cable traffic and 68 percent of mobile network traffic — pay little to nothing to support the fund. The fund was created before the commercialization of the internet. That world has changed, but the funding model hasn’t.

Fortunately, there’s momentum to fix it. In June, the Supreme Court upheld the FCC’s authority to operate the Universal Service Fund, clarifying legality. That decision empowers Congress to act, and lawmakers from both parties and houses are moving to fix the problem.

This follows proposals such as the bipartisan Lowering Broadband Costs for Consumers Act, which suggests that platforms with a minimum of $5 billion in U.S. revenue and making up at least 3 percent of total U.S. traffic participate financially in the fund. FCC Chair Brendan Carr earlier agreed and called for an end to Big Tech’s free ride by updating the fund’s contribution base to include online advertising revenue from the relevant platforms. Financial reporting from Alphabet, Meta and Amazon suggest they are on track to reach approximately $500 billion in online ad revenue this year. Just 1 percent of this revenue can secure the fund in perpetuity and end the financial burden on consumers.

It’s a logical source of revenue to tap because advertising and its associated ad tech account for a significant amount of all broadband traffic and require a growing investment in downstream capacity to deliver.

To be clear, this isn’t about punishing innovation. But let’s not confuse self-interested infrastructure with federal programs that fund rural networks and low-income families. Big Tech isn’t building public infrastructure — it’s building toll roads that capture revenue and data at every turn. Its data centers exist to serve proprietary services and maximize platform revenue, not to carry out the FCC’s mission of universal access.

That mission — bringing connectivity to all Americans — remains unfinished. Millions still lack a connection to high-speed broadband. Big Tech benefits every time someone connects to the internet; it’s time to update the rules so that those who benefit most from universal connectivity help sustain it.