RURAL SENATORS QUESTION POWELL'S COMMITMENT TO UNIVERSAL SERVICE
Rural senators expressed variety of concerns about Universal Service Fund (USF) and way FCC is administering it in Senate Commerce Communications hearing on issue Wed. Sen. Rockefeller (D-W. Va.) criticized FCC Chmn. Powell, saying Powell wasn’t committed to USF despite “swearing” not to undermine fund during his Senate confirmation hearing. Rockefeller said FCC was using uncommitted e-rate funds to keep USF contributions stable. “I'm not sure of his commitment to e-rate. I'm not sure of his commitment to universal service,” Rockefeller said, adding that he was “very unhappy” with Powell’s treatment of those issues. FCC needs to be “much more aggressive and timely” in redefining USF contribution system and should have it “worked out” by April, Rockefeller said. Sen. Dorgan (D-N.D.) also was critical of Powell, saying FCC had “chopped away at” USF and fund was in great jeopardy if FCC didn’t take aggressive action. He also said Powell should be called before Senate Commerce Committee to testify about USF.
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Most passionate concerns came from Sen. Stevens (R- Alaska), who said too much of USF had been used on projects that didn’t expand telecom access to rural areas. He specifically cited USF funds used to outfit schools, libraries and health facilities with telecom services in urban areas, instead of long distance for rural areas. Stevens said fund was being used to subsidize service costs, which is expansion of original mission, that allowed only for acquisition of equipment. Stevens said 50% of USF fund spent last year went to 10 states, none of which were rural. He questioned whether USF could survive: “I have a portion of my state the size of Texas with no communications services.” However, unlike Democratic senators, Stevens praised Powell for his efforts to reform USF.
Hearing featured 2 panels, with FCC Wireline Bureau Chief Dorothy Attwood and state public utility commissions on first panel and industry representation on 2nd. Attwood said changing telecom market, particularly reduction in interstate revenue, was challenge FCC must address. Fla. PSC Chmn. Lila Jaber said it was premature to expand USF, particularly for broadband. She said USF funding would prevent marketplace from determining most appropriate technology for broadband by favoring wireline services such as DSL. Alaska Regulatory Commission Chmn. Nanette Thompson echoed Stevens’ concerns that too much of USF had been used in major urban areas for schools and libraries. “It is not evident that Congress intended such high levels of school and library funding,” she said.
Method of funding USF was central topic at hearing and included discussion of plan to base USF on user network connections instead of existing revenue-based mechanism, which FCC is considering. Don Bond, pres.-Public Service Telephone Co., Reynolds, Ga., said plan would benefit long distance providers. He also spoke for NTCA and OPASTCO. He said FCC should consider expanding pool of contributors to USF and “safe harbor” granted to wireless carriers wasn’t necessary or fair. CTIA Gen. Counsel Michael Altschul also disagreed with connection-based system, saying it would act as regressive tax that placed disproportional funding burden on low-volume users. MCI CFO Victoria Harker said current regulations gave wireless advantage over long distance carriers and didn’t meet requirement of competitive neutrality. She advocated plan by Coalition for Sustainable Universal Service (CoSUS) that would cost residential users $1 per line.