USF Reform Could Put Hyperscalers, Data Centers on the Hook

WASHINGTON, Oct. 8, 2026 – A federal broadband subsidy program under financial duress could get bailed out by AI-related companies, as policymakers consider making major users of broadband infrastructure contribute to universal service.

Universal service reform could expand the pool of companies that help finance broadband networks to include hyperscalers, cloud providers and other major users of internet infrastructure, according to former FCC officials and broadband advocates.

The idea emerged during a panel at the School, Health & Libraries Broadband Coalition’s annual conference that asked what the Universal Service Fund would look like if policymakers designed it from scratch.

Former FCC Wireline Bureau Chief Trent Harkrader said the contribution system could be expanded beyond the current focus on interstate telecommunications revenue as voice service continues to decline. A reimagined program, he said, could require broadband internet service providers to contribute to the fund, rather than relying primarily on declining voice revenues.

Harkrader suggested that hyperscalers could be treated as large end users of broadband networks and potentially contribute based on how much capacity they use. A data center that consumes significant amounts of network capacity, for example, could face a different contribution obligation than a rural broadband provider serving a small number of households.

Adeyenka Ogunleye, chief of staff and vice president of Federal Affairs at the National Urban League, said policymakers should not necessarily use a single contribution formula for every participant in the internet ecosystem. Hyperscalers could face a different formula from households or rural broadband providers, she said, arguing that companies whose businesses depend on broadband should help support the networks underlying the digital economy.

“I think we really need to look hard at who contributes, what revenue streams benefit from the internet ecosystem and the networks that are built, and how they can participate in making sure that the end user, the customers that they are trying to reach are all connected and can afford to be connected,” Ogunlegan said.

The panel also discussed whether USF should continue to rely on its existing funding structure rather than congressional appropriations. Harkrader warned that an appropriated program could become unreliable when Congress fails to provide funding, creating uncertainty for both consumers and providers.

NTCA Director of Government Affairs, Virdina Gibbs agreed that broadband providers need predictable funding to plan network construction and operations.

The discussion comes as policymakers are examining how to modernize USF while broadband needs continue to expand. Panelists argued that the demand for the fund is growing even as the existing contribution mechanism faces pressure.

Gibbs said USF remains necessary even after the $42 billion BEAD program, describing the two programs as complementary. BEAD can help build networks, while USF can support affordability and the continued operation of those networks, she said.