Reform USF to Cover Broadband, House Subcommittee Says
The universal service fund should be expanded to cover broadband services, members on both sides of the aisle said in a House Telecom Subcommittee hearing Tuesday. Members agreed the fund needs a substantial overhaul, a view backed by witnesses advocating help for low-income consumers in rural areas and urging further USF support for schools. Differences emerged over how to revamp the program, with Democrats supporting extension of the fund for broadband deployment, an idea not wholly endorsed by Republicans.
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The hearing reflected a sense of increased urgency about the need for change and a growing consensus that support for broadband services should be part of reform discussions, said members, industry sources and Hill staffers. Passage of legislation is unlikely in the 110th Congress, but proposed legislation and further hearings are building a record for action in the next Congress, where an anticipated increase of Democrats likely will drive momentum for making broadband deployment a national priority, according to interviews with staff and industry.
“Congress, not the FCC, is better suited to make the tough political choices on how best to reform the system,” said House Commerce Committee Chairman John Dingell of Michigan, indicating the lead role Congress is likely to play in coming months to revamp the program. “A critical examination of universal service must examine regulatory disparities between different types of providers,” Dingell said, recommending that if all providers participate in the program, they should do so on equal terms.
Another hearing is likely next fall examining specific problems with the program, including focus on mismanagement that in the past has caused significant waste of taxpayer money, Hill sources said. The high error payment rate in the schools and libraries E-rate fund needs congressional attention (CD April 30 p1), said Rep. Cliff Stearns, R-Fla., subcommittee ranking member. “We need to take a hard look at this program and institute real reform,” Stearns said.
Stearns co-sponsored a USF reform bill with Rep. Joe Barton, R-Texas, that was introduced Tuesday and reflects concern over management of the fund. The bill includes provisions that would mandate economic analysis of decisions and how they comply with the Communications Act. The bill also would require a review of the financial interests of any newly appointed member of the joint board that oversees the fund with the goal of preventing any conflicts of interest. The bill would require all members of the board to have “professional training and expertise in public administration and no financial interest or affiliation with any organization or company that may receive universal support.”
The bill would require the FCC to monitor availability, price and subscription rates of voice communications services for low-income consumers and gauge the change in penetration rate as measured by the amount of support given to such consumers. The bill also would direct the FCC to measure, “per million dollars spent, the improvement in education outcomes” due to support coming from the schools and libraries fund. Similar measurements would be required for support for rural health communications services.
AT&T praised the Barton-Stearns bill because it’s “consumer focused and technology neutral,” said a statement from Executive Vice President Tim McKone. AT&T has suggested approaches to USF reform that “differ in some respects from this bill,” McKone said, but the company hopes to work with Barton and the committee as it “continues a bipartisan dialog.”
Consumers pay about an 11 percent surcharge on interstate and international calls to pay for universal service, said Subcommittee Chairman Ed Markey of Massachusetts. That’s nearly double what people paid a decade ago, he said, and comes at a time when there’s growing consensus that the U.S. is falling behind the rest of the world in broadband deployment. Universal service could be a tool for increasing broadband, Markey said. “Any overarching policy blueprint for universal broadband will, by necessity include universal service as a component.”
“I think the universal service program needs to be blown up like the Death Star,” said Rep. Michael Doyle, D-Pa., in one of many references to witness and film maker George Lucas, who runs an education foundation and urged Congress to continue supporting subsidies for broadband for schools. Markey said Congress’ responsibility is to ensure that reform of the USF program leads to greater efficiencies while serving public policy goals.