Panelists Want Wider USF Funding Base; Cable Companies Balk at Inclusion
The FCC should begin making customers of non-wireline services, including broadband, contribute to the USF, some panelists said at NARUC’s winter committee meetings. But NCTA Vice President-State Government Affairs Rick Cimerman said taxing broadband is the wrong approach if a goal is to expand broadband.
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The problem is twofold, said AT&T Vice President-Regulatory Planning and Policy Joel Lubin. He said a fund that pays for such major initiatives as Lifeline to help low-income families afford phone service, or expanding broadband at schools and libraries through E-Rate, isn’t sustainable. The number of people getting traditional phone service from ILECs has dropped by about 77 percent since 1999, Lubin said, as more customers move to wireless and VoIP for their phone service. That’s not going to change, said Vermont Public Service Board Commissioner John Burke, a NARUC board member: “We're clearly moving into an IP world.” Burke is pushing a resolution to be taken up during this week’s meetings that would urge the FCC to expand the contribution base to include services like broadband.
Cable companies would benefit from any expansion of broadband, because having more people connected enhances their customers’ experience, said Burke in an interview. Say there’s a cable customer named Bessie, and her daughter is able to get broadband service, he said. “If Bessie, from Podunk, can see her granddaughter Grace’s dance recital, Bessie is going to be happy,” Burke said.
Lubin said it’s a matter of a fairness at a time when the funds are to be used to expand broadband access through the Connect America Fund. Phone companies are paying to expand broadband to which they are losing customers, but broadband-only companies aren’t, he said. “If you're receiving an economic value from the use of the Internet, then one should contribute.” Companies like Amazon and Google, which would benefit from more people being on the Internet, would also fit that category, he said. Amazon, Google and the Internet Association had no immediate comment. Robert Loube, ex-FCC economist and current vice president of the Rolka Loube telecom consulting firm, likened the situation to the nation’s Highway Trust Fund: “What would you think if only automobile drivers paid into the Highway Trust Fund, but drivers of pickups, small vans and freight trucks didn’t have to pay?"
Cimerman said “you don’t tax liquor stores to increase alcohol” consumption. You don’t tax cigarettes to incentivize smoking, he said. To meet the goals of USF, a fairer approach would be to draw from general taxes, said Cimerman. Loube said that argument was more compelling when the Internet was in its infancy. “I don’t think that argument holds anymore,” he said. “Those of you who bought stock in Borders should know the Internet is not in its infancy.” Cimerman said the cost of expanding broadband should be borne by everybody through a general tax source. He said when the U.S. expanded its electric power infrastructure, it wasn’t only those using the energy who paid for it. The federal government paid because of the public interest, he said. (kmurakami@warren-news.com)