Bells Support Boucher-Terry USF Bill; Politics Uncertain

But Boucher voiced confidence that a “broad base of support” means the measure eventually will get a hearing and perhaps a markup by the committee. To lend political heft, the members included language from Senate Commerce Committee Ranking Member Stevens’ (R-Alaska) USF legislation (S-101) on competitive neutrality. The bill said federal and state mechanisms to preserve and advance USF should be competitively neutral so as not to favor one communications service provider or technology over another.

“To come a bit closer between this bill [Stevens'] and ours we borrowed some principles” that would make a better quality measure, Boucher said. Terry said the Stevens bill reflected many ideas in the Terry-Boucher bill introduced in the 109th Congress. The 2 believe strong industry support will drive political will behind their legislation. Markey’s office had not reviewed the bill, officially introduced Thurs., his office told us.

The bill would expand the USF contribution base so anyone getting services would contribute, notably VoIP service providers and anyone providing a network connection such as cable modem, DSL, WiMAX and broadband over power lines. It would leave it to the FCC to decide what contribution formula to use but if the Commission opted for a revenue approach it would be allowed to assess based on intrastate as well as interstate and foreign telecom services.

USF support for buildout of broadband lines would be required with download speeds at a rate of 1 Mbps or greater to be offered within 5 years of the bill’s enactment. Waivers would be available to carriers demonstrating that would be technologically or economically infeasible. The bill would cap the total amount of high-cost USF support, but not that provided for schools, libraries, rural health care, lifeline linkup and toll limitation programs. Support would be limited to a provider’s actual costs, not the costs of the incumbent provider in a service area.

The bill’s approach on funding caps, limiting funding growth while requiring competitively neutral distributions, is “far more reasonable” than the approach urged by the Federal-State Joint Board on Universal Service, said Alltel Vp-Federal Govt. Affairs Mark Rubin. The board is weighing a cap only on Competitive Eligible Telecom Carriers (CETCs). Rubin said he wants to work with the Commerce Committee on legislation to bring advanced services to rural Americans in a “targeted and technologically neutral manner.”

The bill would limit the number of eligible telecom carriers (ETCs) by setting criteria for getting USF support. For instance, ETCs would have to build out telecom service throughout their USF-supported service areas, show they can function in emergencies and satisfy consumer protection and service quality standards.

Other bill elements: A permanent exemption of the USF program from Anti-Deficiency Act accounting rules; a ban on the FCC’s adopting a primary line restriction; clarification of who qualifies as a health care provider “eligible for rural health care support;” redefining “rural area” to conform with the definition the Dept. of Agriculture’s Rural Utilities Service uses in administering broadband grants and loan programs; elimination of the “parent trap,” an FCC rule requiring a carrier that acquires phone exchanges from an unaffiliated carrier get USF support at the same level for which those exchanges were eligible prior to the transfer.

The bill takes a “common sense” approach to help consumers and correct a flawed distribution formula, Qwest Senior Vp-Federal Relations Gary Lytle said: “It’s time to declare victory in the Universal Service Fund and time to fix the formula one and for all.” Lytle lauded the Boucher-Terry bill’s goal of bringing broadband to rural America. The bill drew support from other telecom carriers, including AT&T, USTelecom, TDS Telecom Services and Embarq Corp. The Coalition to Keep America Connected, NTCA, OPASTCO and Western Telecom Alliance also endorsed the legislation.