Rural Carriers Worry USF Cap Could Reemerge on Senate Floor
Rural telecom carriers fear that political pressure for a cap on Universal Service Fund (USF) support could revive when the bill (HR-5252) goes to the Senate floor, industry sources said. Rural carriers also are concerned that amendments might be introduced limiting USF support to primary lines only, which could harm small rural businesses dependent on USF support for multiple lines, sources said.
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“We succeeded in stopping a cap on USF and a move to… limit support to one line,” said OPASTCO Pres. John Rose, in a statement after the Senate bill was passed 15-7 (CD June 29 p1): “We anticipate that these anti-consumer proposals could reemerge on the floor and intend to strenuously fight these efforts… Capping the fund is a non-starter for us.”
During markup on the USF section of the bill, Sen. McCain (R-Ariz.) offered an amendment that would have imposed a $6.5 billion cap on USF support for eligible carriers. The amendment was withdrawn after some discussion that ended with Senate Commerce Committee Stevens (R-Alaska) saying he supported some type of cap, but the McCain amendment wasn’t the right way to go. “The cap is still in play,” said one industry lobbyist, who asked not to be named. He said he feels the rural carriers didn’t come out ahead with the bill despite language that broadens the base of contributions.
But rural carriers have a strong advocate with Stevens, who saw to it that the bill included a permanent exemption from the Anti-Deficiency Act (ADA) rules for USF. That provision is on a collision course with House Commerce Committee Chmn. Barton (R-Tex.), who publicly signaled his opposition to exempting the E-rate program from ADA rules in May (CD May 26 p1). Barton is expected to submerge his disdain for USF in negotiations with Stevens, perhaps settling on a middle-of-the-road course that could include some type of cap, lobbyists said.
Rural carriers also are concerned about the Senate bill’s loosened definition of “eligible telecommunication carrier,” which could open the gates for more companies to enter the market and further drain the fund, Rose said. “Stronger ETC designation requirements and more accountability of how USF support is used is needed for the integrity of the entire program,” he said.
Carriers are pleased with the bill’s proposed “broadband for unserved areas program,” which would allocate up to $500 million for broadband deployment. The Universal Service Administrative Company will run the program subject to FCC oversight. The bill also includes “competitive neutrality” language, which means USF rules can’t be used to unfairly advantage one provider over another. This section of the bill has been highlighted many times in recent days by net neutrality advocates, who think it’s hypocritical to have such language for voice services but not video.
OPASTCO said the broadband program will help rural telecom carriers achieve full coverage throughout their service areas. Right now, some parts of the country are so remote and “prohibitively expensive to serve” that without USF support it would be impossible, Rose told a Senate hearing June 13. “Targeted support” for rural carriers that haven’t been able to achieve coverage so far would help bring the U.S. closer to the goal of full deployment, Rose said.