USF Bill Wins Praise at Subcommittee Hearing
A draft Universal Service Fund reform bill won general praise from both sides of the aisle at a House Communications Subcommittee hearing Tuesday. Nearly all applauded its plan to expand the fund to cover broadband, but there were differing opinions on how to pay for it. Rural lawmakers raised concerns about the proposal’s impact on support in hard-to-reach areas that could benefit from increased broadband deployment. Key Democrats support a separate bill that would create a “universal broadband fund.”
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The cable industry, which declined comment when the draft was released two weeks ago (CD Nov 9 p2), offered support for several provisions. NCTA President Kyle McSlarrow outlined a new cost-cutting proposal to target areas where support isn’t needed. “The idea on its face has merit,” said Chairman Rick Boucher, D-Va. Rural carriers were lukewarm about the proposal, but said they would consider it. Cost controls of some sort must be considered in light of the fund’s projected contribution rate increase to 14.2 percent in January, Boucher said. “The status quo is not sustainable.”
Boucher’s plan gained unusually warm praise from the Commerce Committee’s top Republican, Joe Barton of Texas, who has repeatedly called for the fund to be dissolved. “I like the bill. You are on the right track,” he told Boucher, but added he’s not fully on board. “I'm ready to take you to the prom, but I'm not ready to marry you,” he joked, suggesting that the proposal needs some “cosmetic touches.” Chiefly, Barton worried the bill may not limit the fund’s growth.
Democratic leaders declared the proposal a good start that should be coordinated with the FCC’s work on a broadband plan. Commerce Committee Chairman Henry Waxman, D-Calif., praised provisions that would broaden the contribution base, expand coverage to broadband, limit growth through competitive bidding, target support paid to non-rural carriers like AT&T and Verizon, and increase accountability. He suggested the legislation be “harmonized” with the commission’s broadband effort. Former Chairman John Dingell, D-Mich., supports expanding contributions to all communications services, he said. “We should not play favorites with new technologies.”
Waxman and Rep. Ed Markey, D-Mass., announced support for legislation introduced by Rep. Doris Matsui, D-Calif., that would create a universal service broadband benefit for low-income consumers modeled on the existing Lifeline program for phone service. “Fixing a bloated system . . . is long overdue,” Markey said. Congress needs to work with the FCC to build a “blueprint for our broadband future.”
The Internet is a “necessity, not a luxury,” Matsui said. But even if it is available, costs are often too high for low-income residents. Creating a broadband “Lifeline” program could help. Democratic Reps. Mike Doyle of Pennsylvania and Anna Eshoo of California said they support Matsui’s bill. “Monthly price isn’t always the biggest reason people aren’t online at home,” Doyle said. “Perhaps we need to consider legislation” that would move the USF program to a voucher system, so low-income consumers could communicate the way they want to.
Republican leaders wanted more clarity on how the fund’s costs would be lowered. “It is not clear that the draft contains cost in any significant way,” said subcommittee ranking member Cliff Stearns of Florida. While the draft proposes a cap on support, it’s subject to “several significant exceptions that would grow the fund,” he said. Consumers are likely to see their phone bills go up, he said, voicing backing for competitive bidding for wireless support. AT&T and Verizon endorse that idea, while rural wireless carriers generally do not.
AT&T warned that the bill’s proposed cap could limit funding for broadband. “A cap may be, at best, a blunt instrument . . . to staunch the bleeding” until more fundamental reform is achieved, said Joel Lubin, vice president of public policy. “A high cost program with no ceiling would harm rural America,” Verizon Senior Vice President Peter Davidson said. The bill would direct the FCC to consider alternate contribution models. Large carriers favor a numbers-based system, while rural carriers support using a revenue model. “Telephone numbers have nothing to do with broadband Internet access service,” said Leslie Greer, speaking on behalf of the National Telecommunications Cooperative Association.
CTIA didn’t testify at the hearing. But it urged Congress to work toward “competitively neutral reforms that target support to where it is truly needed,” President Steve Largent said.