Telecommunications: Federal and State Universal Service Programs and Challenges to Funding

Title 1 of the Communications Act of 1934 sets forth the nations telecommunications policy, including making communication services available so far as possible, to all the people of the United States. Early efforts by FCC, state regulators, and industry to promote universal service generally began in the 1950s. At that time, increasing amounts of the costs associated with providing local telephone service were recovered from rates for long distance services. This had the effect of lowering local telephone rates and raising long distance rates, which was intended to make basic local telephone service more affordable. Because American Telephone and Telegraph Company ATTprovided both nationwide long distance service and local telephone service to approximately 80 percent of the nations telephone subscribers, universal service was largely promoted by shifting costs between different customers and services.