A 75-year-old Alaska businessman serving a federal prison sentence for felony tax evasion continues to receive more than $1 million annually from a federal program meant to expand phone and internet service in hard-to-reach areas, according to data from the Federal Communications Commission. Roger Shoffstall, who runs Summit Telephone from his base in rural Alaska, has collected payments through the Universal Service Fund since before his 2019 conviction, despite being barred from serving on federal juries and owning firearms under his felony status.
The Universal Service Fund operates as a surcharge added to monthly phone bills nationwide. Carriers currently contribute 37 cents for every dollar of their interstate and international revenues to the program, which was established by Congress to bring affordable communications services to remote communities. In Alaska, where many areas can only be reached by plane or boat, the FCC has distributed $4.6 billion in subsidies since 2016—more than $600 per resident annually, more than any other state.
What the Left Is Saying
Democratic lawmakers and consumer advocates say the Alaska situation illustrates how a well-intentioned program has failed to deliver its promised results while enriching companies regardless of service quality or actual demand. Senator Jon Ossoff of Georgia, who has championed rural broadband expansion, has previously stated that subsidy programs must include accountability measures ensuring residents receive modern service for their money. The Electronic Frontier Foundation argues that federal dollars should follow consumers to providers offering competitive speeds and prices rather than propping up outdated infrastructure.
Progressive advocacy groups say the program disproportionately benefits telecom companies at taxpayer expense. Organizations including Public Knowledge have called for stricter oversight, noting that Alaska's per-capita spending far exceeds connectivity outcomes. Consumer advocates contend that low-earth orbit satellite services like Starlink—which offer faster speeds at lower monthly costs—demonstrate what competition could achieve if subsidy rules were modernized.
What the Right Is Saying
Conservative economists and industry groups argue that the Universal Service Fund remains essential for maintaining communications infrastructure in areas where market forces cannot sustain operations. The National Telecommunications Cooperative Association, which represents rural providers, contends that satellite internet does not eliminate the need for terrestrial networks serving schools, hospitals, and emergency services that require reliable, low-latency connections.
Republicans who oversee FCC oversight in Congress have generally supported continuing Alaska subsidies while requesting improved reporting requirements. Industry representatives note that building infrastructure in remote Alaskan communities involves extraordinary costs that private investment alone cannot justify. The CCIA trade group argues that reforming the program should focus on expanding eligible technologies rather than eliminating support for existing networks that serve critical functions.
What the Numbers Show
The FCC has distributed $4.6 billion in Universal Service Fund subsidies to Alaska telecommunications companies since 2016, averaging more than $600 per state resident annually—more per capita than any other state. Despite this investment, Alaska ranks near the bottom nationally for access to land-based high-speed internet service meeting the FCC's broadband threshold.
Summit Telephone's fastest available internet plan in its service region offers maximum speeds of 25 megabits per second at a cost of $135 per month, according to the company's website. Low-earth orbit satellite provider Starlink, which does not qualify for Universal Service Fund subsidies, offers download speeds up to 280 Mbps in comparable rural Alaska areas for approximately $90 to $130 monthly.
In another example cited by ProPublica, Adak Eagle Enterprises receives more than $350,000 annually from the program to serve 306 buildings on the Aleutian island of Adak. The Alaska Department of Labor estimates fewer than 80 people live on the island. GCI, the state's largest telecom and subsidy recipient, collected $466 million in program funds two years after reaching a settlement with federal authorities over alleged fraud related to the same subsidy program. The settlement did not include an admission of guilt.
The Bottom Line
The Universal Service Fund faces growing questions about whether its structure serves contemporary broadband goals. With Alaska receiving more per-capita funding than any other state yet ranking at the bottom for connectivity quality, critics argue the program rewards providers regardless of performance outcomes. The FCC has not responded to requests for comment on specific subsidy recipients or program oversight.
What comes next: Congress is considering broader reforms to telecommunications subsidy programs as part of pending infrastructure legislation. Lawmakers from both parties have expressed interest in updating eligibility requirements to reflect current technology options while maintaining support for hard-to-serve communities. Watch for FCC proceedings on Universal Service Fund reform and any congressional hearings examining Alaska-specific spending data.
The program's supporters say eliminating subsidies would leave remote Alaskan communities without essential communications infrastructure. Its critics argue that $1 million annual payments to a convicted felon's company, combined with the highest per-capita spending in the nation producing among the slowest speeds, demonstrate systemic failures requiring structural change.