ETCs HOT TOPIC DURING TELECOM SUBCOMMITTEE USF HEARING
In the first of 3 days of House activity on the universal service fund, the House Telecom Subcommittee took a broad look at the program as most members and witnesses said something had to be done to fix the program before it becomes insolvent. But agreement ended at that point, as an array of witnesses offered competing suggestions for a fix.
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The definition of “eligible telecom carriers” (ETCs), and the requirements placed on them, was the central topic for Telecom Subcommittee Chmn. Upton (R-Mich.). Sidney Shank, mgr. of Bloomingdale Telephone Co. in Mich., said that competitive ETCs, such as wireless providers, don’t have the same service requirements that incumbent ETCs have placed upon them. Shank spoke for both NTCA and OPASTCO. She said that USF has been “greatly threatened” by multiple ETCs in a service area and that further growth in the number of ETCs would result in no carrier having the funding to provide service to high-cost areas. “This is an area that Congress simply can no longer ignore.”
FCC Comr. Abernathy told Upton that the joint federal- state board on USF was looking at the ETC carrier definition to determine “what we can do better.” But in reply to some concerns that wireless carriers contribute far more to USF than they receive, Abernathy said “contributing to the fund doesn’t mean you are entitled to receive funds.” John Stanton, Western Wireless chmn., said wireless services should receive funding in rural areas because it’s economically the best way to provide service in rural areas.
House Commerce Committee ranking Democrat Dingell (Mich.) suggested several principles that should be followed while reforming USF: (1) All providers should contribute equally to support universal service. “And I mean all providers,” Dingell said. (2) All communications, not just interstate communications, should be assessed. “In a world of packetized networks and bundled service offerings, it is simply nonsense for the FCC to determine what communications are interstate rather than intrastate in nature,” he said. (3) Regulators should be careful not to “play favorites” with new technologies such as voice-over-IP protocol. “Contrary to what some might say, we are not stifling the growth of new services by asking them to play by the same rules of their competitors,” he said.
Rep. Terry (R-Neb.) said the hearing was “decent” but could have used more diverse opinions. Terry was advocating a change in the non-rural high cost fund, which he said inappropriately distributes funds to a limited number of states. Only 8 states receive parts of the $280 million in funding, he said, and some of those states aren’t as rural as others. “This may be one of the most poorly targeted funds in the federal government,” Terry said. He said legislation he introduced (HR-1582) would broaden the distribution of the fund to 40 states, including his state of Neb., which he said gets “screwed” in the funding distribution.
Margaret Greene, USTA chmn., said that HR-1582 “does not go nearly far enough to safeguard universal service. There is no new discipline imposed, either in how many companies have access or what standards they provide.” The bill only addresses the non-rural side of universal service, she said, “leaving out the lion’s share of communities the fund serves.” Rep. Stupak (D-Mich.), a co-sponsor of HR-1582, said it was important for Congress to fix the “inadequacies” that exist today.
Greene said the fund shouldn’t be capped, as some suggest. Instead, the fund should ensure neutrality for both who pays into the fund and who takes out of the fund. She said the fund should only go to one ETC in each area. And there should be one “high” standard for ETC across all platforms.
The House Small Business Rural Enterprises Subcommittee is scheduled to hold a similar hearing today (Thurs.) Sources said the hearing would likely focus on ETC designations. Witnesses will include: FCC Comr. Abernathy; Robert Williams, Ore. Farmers Mutual Telephone Co. and OPASTCO and NTCA member; Tom Attar, Highland Cellular; Brian Staihr, Sprint regulatory economist; Billy Gregg, W.Va. PSC consumer advocate; Michael Balhoff, Legg Mason analyst; Glenn Brown, McLean and Brown pres. The hearing is scheduled for 1 p.m. in Rayburn Bldg. Rm 2360.
Also, the Progress and Freedom Foundation has a forum on USF scheduled for Fri. at noon in Rayburn Rm. 2105.