BURNS WANTS FASTER RESPONSE ON UNIVERSAL SERVICE, EYES ‘SUMMIT’
Expressing frustration at the FCC’s pace of developing solutions to problems facing the universal service program, Senate Commerce Communications Subcommittee Chmn. Burns (R- Mont.) said he would like to see a summit involving members of Congress, the FCC and the Federal-State Board on Universal Service. “This horse [the FCC] isn’t going to run any faster unless we put the spurs on,” Burns told reporters after a hearing Wed. on universal service. He said such a summit would help members determine whether legislation was needed in any areas and, if so, whether Congress could begin work on a bill this year.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
FCC Comr. Abernathy said the Commission could have a solution for universal service fund (USF) contribution methods by year-end, but whatever the agency did on contribution methods would be challenged in court. “If the court tells us we can’t get more creative, we may be back before you” to ask for a legislative solution, Abernathy said. She said she was leaning toward a contribution method that would be based on a connection approach, rather than the current revenue-based approach, but didn’t specifically endorse any connection-based approaches. She said bundling had made it difficult to separate interstate from intrastate traffic and it was important to “spread” USF across as many telecom services as possible.
Abernathy detailed to the senators several different USF-related issues the FCC was examining, including services that USF should support, distribution to high-cost areas and designation of eligible telecom carriers (ETCs). Burns questioned whether the FCC would be able to address all of the issues simultaneously: “Will there be a comprehensive solution or will there be constant tinkering?” Abernathy, chmn. of the joint board, said it would hold a public forum on ETC status designation once the comment period expired. She said the forum probably would be in the summer and could be in coordination with NARUC’s summer meeting.
Senators and witnesses said there were serious problems with USF. Several senators said some form of solution must be found. “We've got to get on to some kind of solution,” Commerce Committee ranking Democrat Hollings (S.C.) said. He said e-mail and cellular services were creating a decline in long distance revenue, the source of USF funding. He also said that the FCC’s attempt to classify broadband services as an information service would jeopardize Congress’s intent of providing support for broadband through USF. Sen. Dorgan (D- N.D.) reiterated Burns’s comment that a comprehensive solution to USF problems needed to be found this year.
Sens. Smith (R-Ore.) and Brownback (R-Kan.) also questioned USF’s health. Smith said Ore. ILECs that had both urban and rural customers were hampered because regulations prevented those companies from giving rural customers the benefits of USF. Brownback said it was important to examine where the USF funds were going.
While varying methods of contribution to USF were discussed, attention was also paid to portability issues and the designation of ETCs. An industry observer at the hearing said such discussion was a positive step, noting that a similar hearing last year had focused solely on contributions methods. Also discussed was the E-rate program, which recently has come under criticism for potential abuse to the program. Abernathy said the FCC had 2 rulemakings open on E- rate and there would be a public forum on May 8 to examine E- rate issues, including potential fraud and abuse.
Several witnesses said the safe harbor that insulated wireless carriers from contributing as fully as wireline carriers needed to be revised. Robert Orent, CEO of Hiawatha Communications in Mich., said such a system was “unfair” since wireless carriers facilitated access to long distance networks. But Carson Hughes, CEO of Telepax, said the safe harbor was a useful tool for wireless companies. He said USF was essential in providing wireless service to rural customers at prices comparable with urban service. He said that by funding wireless carriers, USF was creating a viable form of competition to ILECs in rural markets.
Several witnesses said state PUCs were too quick to grant ETC status to competitive carriers. William Gillis, dir., Center to Bridge the Digital Divide, said states were viewing ETC as a form of “welfare” and weren’t taking into account the public needs of USF. He said many state PUCs still didn’t fully understand the USF system.
NARUC officials were unhappy that they weren’t able to testify at the hearing to rebut the charges. Anne Boyle, chmn.,Neb. PSC, said she didn’t understand the criticism in light of the fact that the FCC established the criteria under which ETC status was determined. She also said rural ILECs were fearful that wireless companies would take USF funding, but said the Telecom Act promised competition “to the entire country, not just the big cities.” Boyle said PUCs often took several months to review and approve an ETC application.