All 2-Way Voice Services Would Pay USF Under Senate Bill
Universal service fund (USF) contributions would be applied to all 2-way voice services under a bill introduced late Fri., just before the summer congressional recess. Sponsored by Sens. Smith (R-Ore.), Dorgan (D- N.D.) and Pryor (D-Ark.) , the bill broadens the base of contributors and establishes a separate fund capped at $500 million a year to encourage broadband deployment in rural, “unserved” U.S. areas.
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“The expansion of broadband services allows students, business and consumers in previously unserved communities to pursue the new opportunities provided by the instantaneous exchange of information,” said Smith. Dorgan said the bill would help make Internet access “a reality in areas that otherwise would get left behind.” Senate Commerce Committee Chmn. Stevens (R-Alaska) didn’t comment on the bill, a spokeswoman said Mon., but he had said he planned his own USF reform bill. Stevens hasn’t made clear whether he will address USF separately or in an overall telecom bill -- but whatever action he takes it will come after DTV legislation is dealt with in mid-Sept.
Telcos welcomed the Smith bill as a good first step in addressing USF problems. “The changes in the technologies of communication have put the universal service fund on life support,” said BellSouth Vp-Govt. Affairs Herschel Abbott. “This legislation recognizes the problems that need to be addressed and offers well- reasoned solutions,” he said. The solutions may not be “everyone’s cup of tea,” he said, but the bill is a good start. USF reform will have to be included in overall telecom legislation, he added, and the bill represents “an enormous step forward.” NTCA said the legislation was “an enormous step forward” in the effort to update telecom laws, praising its efforts to expand broadband in rural areas, according to a media statement.
SBC, Verizon and USTelecom also applauded the legislation. “This bill offers realistic direction for addressing inter-carrier compensation and broadening and stabilizing the contribution base for Universal Service,” said Walter McCormick, pres. of USTelecom, formerly USTA. NCTA declined to comment on the bill because officials are still reviewing the legislation, a spokesman said. But he noted that cable has “voluntarily” paid into USF with its VoIP services as “part of our commitment into meeting important social obligations.” Wireline bears the brunt of USF fees, which are passed on to consumers. As more consumers use wireless for long-distance calls, revenue has dwindled - leading to the current problems.
The USF bill directs the FCC to establish a “permanent mechanism” for supporting USF, using collection methods that could be based on total telecom revenue, assignment of telephone numbers and any successor identifier, or connections, which could include carriers with a retail connection to a customer. The methodology must promote “competitive neutrality among providers and technologies,” the bill said. The bill also requires the FCC to ensure that a carrier not be required to contribute more than once for the same transaction.
The goal is to ensure that all communication services capable of supporting 2-way voice communications be included in the assessable base for universal service support, according to the bill. It also directs the FCC to consider the impact on low-volume users and “proportionately” assess high-volume users. The FCC also would have exclusive jurisdiction to establish rates for intercarrier compensation (ICC) payments and establish rules providing a “comprehensive, unified system of ICC, including compensation for the origination and termination of intrastate telecommunications traffic,” the bill says.
The FCC would work with the Federal-State Joint Board on Universal Service to ensure that the costs of interstate and intrastate telecom services are fully recoverable, according to the bill. The commission would examine whether “sufficient requirements” exist for traffic to contains identifiers needed for ICC fees to be assessed. The bill also directs the FCC to ensure USF and ICC support meets the needs of local exchange carriers with fewer than 2% of the nation’s subscriber lines. The FCC has 6 months from the enactment of the legislation to carry it out.
The broadband deployment provision directs the FCC to determine which parts of the U.S. qualify as unserved areas. The commission must conduct a study to give the House and Senate Commerce committees within 6 months of the bill’s enactment, and update it annually. The FCC also is in charge of deciding which facilities-based providers are eligible for support from the account, and setting up the system for drawing support from the account.