Rep. Terry (R-Neb.) is working on universal service fund reform l...
Rep. Terry (R-Neb.) is working on universal service fund reform legislation designed to appeal to rural advocates and House Commerce Committee Chmn. Barton (R- Tex.), a House source told us. USF reform is a major goal of rural telecom…
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interests this session and the issue is high on Senate Commerce Committee Chmn. Stevens’ (R- Alaska) agenda, sources said. But Barton has raised questions about the program and said Fri. an “academic argument” could be made for its elimination, though he admitted the political impossibility of ending the program. The House source said Terry’s bill would be a full restructuring of the USF program, but specific details weren’t available. But the source said Terry’s staff is considering a “hybrid model” for USF contribution that could include elements of a revenue-based system and a numbers-based system. A system of contribution based on telephone numbers probably would create more contributors to USF, since the existing system relies specifically on long-distance revenue. AT&T had backed a numbers-based approach, but it’s unclear whether the proposed merger with SBC has changed the company’s position. Also, FCC Chmn. Martin has spoken in favor of a number-based approach. The House source said the bill would aim to expand the contribution base of USF and try to expand USF’s jurisdiction to allow collection on intrastate calls. Now, only interstate calls can be used in assessing funds. It’s unclear how the bill would handle USF distributions, the source said. The source said the bill wouldn’t address E-rate funding, which Barton wants eliminated. And it’s unclear whether the bill will include a provision to modify the USF’s non-rural high- cost portion. Terry introduced a bill last year that would change how this fund is distributed to large ILECs. Under the existing system, Miss., Ala. and W. Va. ILECs get the most funding, since they serve the most rural consumers. But western states say the fund, which totals about $260 million yearly, should be distributed more evenly to their states since geography and distance raise the cost of deploying telecom service to these rural areas. Qwest would be a primary beneficiary of this change. Sen. Smith (R-Ore.) has introduced legislation (S-284) this session that would make that change.