The Information Technology and Innovation Foundation is pushing federal regulators to rapidly eliminate legacy subsidies for rural telephone networks, arguing that continuing the programs delays technological upgrades and unfairly protects outdated infrastructure from competition. In comments filed June 22, 2026, ITIF responded to industry pushback against the Federal Communications Commission's plan to phase out Intercarrier Compensation (ICC) and Connect America Fund ICC programs as part of a broader transition to all-IP networks. The think tank dismissed industry objections as "rent seeking" that prioritizes private profits over consumer benefits.
ITIF took direct aim at proposals from the NTCA, a trade association representing rural telecom providers, which has requested what it calls a "rechristening" of ICC into a new rural support mechanism. The report characterizes this as sending "ICC to witness protection: a new name and new life for the same old handout." According to the filing, ITIF had previously cautioned that "the Commission should not indulge a subsidy merry-go-round in which the demise of one type of handout becomes a reason to increase another." The organization argues that shifting to explicit rural support would only highlight how these programs create an unlevel playing field where some providers receive benefits others don't.
The report frames industry requests for delays in eliminating subsidies as "self-serving and anti-consumer," noting that some rural carriers have expressed concern about modernization's effect on their bottom line. ITIF points out that NTCA seeks "explicit universal service support for carriers serving rural high-cost areas to avoid eliminating revenue" and wants any revenue reductions paired with "sufficient and predictable cost recovery support." The authors write that the fact it will take small rural providers longer to upgrade their networks "is an indictment of those ISPs, not the Commission's reform policy." The report argues that continuing support for outdated infrastructure actually incentivizes carriers to maintain old networks to keep receiving subsidy payments.
The core of ITIF's argument rests on the idea that technological advances have made these subsidies unnecessary and even harmful. The report contends that continuing ICC and CAF ICC at a time when "technological advancements are pushing high-quality connectivity deeper into remote areas" is backwards policy. Rather than subsidizing uneconomical networks in ways that incentivize inaction and insulate providers from competition, the filing argues the FCC should eliminate these programs to enable fair competition and let more economical technology options serve rural areas. The organization emphasizes that faster network upgrades benefit consumers more than slower ones, but subsidies create the opposite incentive by rewarding carriers for maintaining legacy systems.
ITIF concludes by reminding the FCC that the "revenue" rural providers want to protect comes "from the pockets of Americans not lucky enough to have a special program dedicated to propping up their businesses come what may." The report recommends the Commission "lean into technological advancements" that have made legacy subsidies obsolete rather than delay reforms at consumer expense. If some providers can't serve customers with current technology even with government support, ITIF argues, that's not a reason to continue propping them up—it's a signal that the market needs to move on.