House Oversight Questions Carriers on USF High-Cost Fund
AT&T, Alltel, Verizon are among 24 companies questioned on how they spend high-cost universal service fund subsidies, the House Oversight Committee said Monday. The fund needs more oversight, chairman Henry Waxman, D-California, told committee members in a memo Monday. He called that goal consistent with the committee’s “strong interest” in ensuring private sector and government accountability. The committee worries about the size and growth of subsidies, which the FCC said exceeded $6 billion total 2006 to 2008.
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“I am not implying that any of these companies have violated applicable FCC rules,” Waxman told committee members. But he cited skepticism in a Government Accountability Office study in June about “what the program is accomplishing, whether it has clear objectives and whether it has effective controls over expenditures.” Congress needs more information on how recipients spend subsidies and disclose their activities to consumers and regulators, he said. The committee asked for a response by Aug. 25.
Phone customers pay a bill surcharge of more than 11 percent each month into the fund, Waxman told committee members. The FCC listed the largest fund beneficiaries in response to a June letter that Waxman sent Chairman Kevin Martin. AT&T topped the list, getting $1.3 billion from 2006 to 2008, followed by Alltel, $967 million; Verizon, $915 million; CenturyTel, $870 million; Telephone and Data Systems, $558 million; Embarq, $310 million; Citizens Communications Company, $300 million; Sprint Nextel, $282 million; Windstream, $250 million; Qwest, $233 million; and America Movil, $140 million.
Waxman’s letter to the companies seeks information on data management, sources of fund subsidies, length of involvement in the program and status of applications for “eligible telecommunications carrier” status. Waxman asked companies if they ever have been audited by the FCC or the Universal Service Administrative Co. in regard to their high- cost fund participation. Companies were asked for details on fees and surcharges they collect from consumers, how those charges are calculated and how they are described to consumers. “Provide the language you use to describe this fee or surcharge to consumers,” the letter said.
Companies required to account for high-cost fund spending are asked to describe how they do that and how long they retain the documents. The committee also asked the companies if they apply any high-cost support toward broadband deployment, and to supply details on how much support went to broadband services or gear. Waxman asked the companies if they consider availability of USF subsidy dollars in planning network buildout, or when analyzing potential mergers or acquisitions. They also were asked to state what percentage of company revenue came from high-cost support.
Verizon supports review and reform of the program, and is writing a response to Waxman, a company spokesman said. “We hope this and related efforts increase momentum toward comprehensive reform.” AT&T also said it received the committee’s request and “will answer questions promptly,” a spokesman said.