House Bill Would Apply USF Support to Broadband
Universal service fund (USF) support would be used for broadband deployment, under a discussion draft released Thurs. of a bill by Reps. Terry (R-Neb.) and Boucher (D-Va.). The bill would expand the USF base by requiring payments into the fund by service providers that use telephone numbers or IP addresses or sell network connections. “To change USF, I believe that all who play must pay,” said Terry. He called the draft a vehicle for reform that would remedy “inequities that exist today.” Boucher said he’s seeking comments on the draft by Dec. 23 and plans to introduce a bill next year.
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The draft, which declares broadband a universal service, would give fund recipients 5 years to be offering high-speed service with a download rate of at least 1 Mbps. The draft also would cap support -- except for the E-rate program, rural health care, lifeline and linkup programs -- at today’s level adjusted for growth. It would limit support to providers’ actual costs, rather than incumbent providers’ costs, as is done now. Service requirements for eligible telecom carriers (ETCs) seeking USF support would tighten. The draft would give USF a permanent exemption from the Anti-Deficiency Act to avoid the need for annual renewals.
“We're hopeful the [House Commerce] committee will take up the measure,” Boucher said, acknowledging that Chmn. Barton (R-Tex.) has voiced desire to repeal the universal service program. “Committee chairmen have tremendous influence over the shape of legislation, but I think the majority of committee members believe that we should take steps to sustain the fund,” he said. Five months in the drafting, the bill addresses many of Barton’s concerns about unchecked spending growth, Boucher said. “This draft is going to be generally well received -- we simply have to make changes.”
Boucher said the Senate is on a “similar track” with USF legislative planning. But Barton and Senate Commerce Chmn. Stevens (R-Alaska) differ on USF reform. “Stevens probably wants a very expanded definition of universal service. I don’t share that,” Barton said Wed. (CD Nov 17 p1): “I would repeal universal service.” He said he planned to meet this week with Stevens on reform. “I do want to reform it, and I do understand that… there is still a place for universal service.” But he opposes using USF reform to boost broadband deployment. “The current USF program is an anachronism,” he said; it props up phone companies that otherwise wouldn’t be in business, according to Barton. “We'll find some political compromise that also hopefully makes good public policy sense,” he said: “I think I'm clear on that one.”
Telco and rural groups generally applauded the discussion draft. “They've hit all the bases. Overall, it looks very positive,” said Tom Wacker, NTCA dir.-govt. affairs. The draft’s broadening of support, tightening ETC requirements and providing certainty on Anti- Deficiency Act rules “should serve as the core universal service components for comprehensive reform,” USTelecom Pres. Walter McCormick said in a statement. Qwest praised the effort as the “only comprehensive USF reform legislation this Congress,” in a statement from Gary Lytle, senior vp-federal relations. APT called it a thoughtful approach for modernizing universal service, especially its attention to broadband deployment.
Stevens said in Aug. he would tackle USF reform after the DTV bill passes. Meanwhile, he engineered another extension to Dec. 31, 2006, of the fund’s exemption from Anti-Deficiency Act rules. That extension appeared in the conference report on the Science, State, Commerce Justice FY 2006 appropriations bill (CD Nov 7 p1), passed Thurs. by the Senate. The same was done at the end of 2004’s congressional session -- letting the fund keep operating until Dec. 31, 2005. Sen. Snowe (R-Me.) introduced a bill in Feb. to make the exemption permanent, but there’s been no action on it.
The House Commerce Committee, which is focused on E- rate reform, recently adopted 11 steps urged by the House Commerce Oversight Subcommittee in a bipartisan report approved Oct. 18 (CD Oct 19 p1). Barton said those suggestions, which would stipulate controls on bidding procedures, oversight of vendors and management of funds, will be considered when the committee works to overhaul E- rate. The oversight panel held 4 hearings and conducted a year-long inquiry into the program, whose flaws are such, according to Subcommittee Chmn. Whitfield (R-Ky.), as to demand a complete rebuild.
The Senate addressed USF reform in a bill in Aug. that would require all 2-way voice services to pay into USF (CD Aug 2 p1). Introduced by Sens. Smith (R-Ore.), Dorgan (D-N.D.) and Pryor (D-Ark.), the bill would create another fund, capped at $500 million, to be used to encourage broadband deployment in rural areas. Sen. Burns (D-Mont.) is working on a USF bill that will address contribution methodology and E-rate, Senate sources said. That bill, expected in Sept., still is being drafted.