USF Key to Ubiquitous Broadband, Small Business Committee Witnesses Say

“There’s one program that will move the needle” for greater broadband penetration in rural and low-income areas, said David Zesiger, Embarq senior vp-regulatory policy, “and that’s the Universal Service Fund.” None of the legislation slated to reform or extend USF last Congress ended up passing, he said, urging the Committee to change that this time.

Modernizing and sustaining USF is “critically important” to the future of IT in the U.S., said Shirley Bloomfield, vp- govt. affairs, National Telecom Cooperative Assn. The most important question to ask in assessing a national broadband strategy is “why aren’t higher numbers of people taking up broadband?” Video services would make broadband services more appealing economically for those in rural and depressed areas that aren’t taking the service even when it is available, she said. She suggested some specific policies, like eliminating the identical support rule, allowing for shared head-ends for local video providers, and engaging in thorough retransmission consent reform. She later noted the benefits enjoyed by urban users of rural access programs, “because a network is only as valuable as the number of people who connect to it.”

Extending USF to broadband services and understanding the govt.’s role in maintaining telecom and IT competitiveness would be key steps in getting access to rural America, said CompTel Pres. Earl Comstock. Comstock set himself in opposition to most fellow witnesses, talking up the govt.’s responsibilities in refereeing access debates, which he said the FCC isn’t doing. “Absent intervention by Congress, this FCC is rapidly removing the access that allows us to penetrate, to serve small businesses” and provide better service, he said, adding “the reality is that the Internet was created by regulation.” American Electronics Assn. Pres. William Archey agreed, favoring “a pure net neutrality,” because moving “to different levels of access it will lead to discrimination.”

Zesiger disagreed, as did most witnesses. “Users can access the Internet in any way they chose,” he said, telling Velsquez the FCC has the power to oversee discrimination of that kind.

Both sides used child safety to bolster their arguments. When Rep. Bean (D-Ill.) asked witnesses to address her child safety concerns, Walter McCormick of USTelecom said such safety requires providers firmly to control the network, another reason they “fear net neutrality” legislation; Comstock, however, said by giving the biggest companies sole control over their networks, “you've only got 2 companies working on [the problem].” Child safety “is not really a net neutrality issue,” said Richard Cimerman, NCTA vp-state govt. affairs, and focused instead on technological innovations needed to stay a step ahead of predators, pornographers and other worrisome presences on the Internet.

All witnesses opposed an Internet tax and supported extending the moratorium. They weren’t as unified, though, on what constitutes such a tax. While Cimerman stated flatly that extending USF into broadband “would effectively be a tax,” Bloomfield said just as flatly “USF is not a tax.” Comstock said “the devil is in the details” and implementation would determine whether a particular tax constituted an Internet-specific (and therefore discriminatory, and illegal) tax. Freshman Rep. Johnson (D- Ga.), who formerly was County Comr. in DeKalb, Ga., said he was worried e-commerce would pose a threat to “people living safely and comfortably” if local govts. lost out on sales tax. ITAA Pres. Philip Bond, the main subject of Johnson’s questioning, said his understanding of the moratorium on Internet taxes was aimed at Internet-specific taxes, and wouldn’t necessarily apply to a standard sales tax. He hedged, however, when asked directly whether he supported such a tax.

Witnesses also urged govt. action on R&D and improved math and science education, which they said would improve our standing in the global tech sector. Microsoft has thousands of jobs posted on its website “for a year, 2 years” that go unclaimed because of a skills shortage, Archey said. He said kids aren’t getting the high school education necessary to compete with foreign nationals, in part because unlike during the Cold War, “we're not afraid anymore… we almost think it’s our God-given right to be number one.”