Commissioner O'Rielly Defends USF Budget Cap Proposals
FCC Commissioner Mike O'Rielly is open to contribution overhaul to support the USF but doesn't support adding a usage fee for broadband services, he said Tuesday in conversation with former Commissioner Harold Furchtgott-Roth. Adding a fee to broadband could tip the price of the service beyond the reach of some consumers, O'Rielly said. "Raising the cost could change adoption rates. It does matter." O'Rielly spoke about capping universal broadband funds at the Hudson Institute where Furchtgott-Roth is director of Center for the Economics of the Internet.
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The FCC is taking comments through July 15 on an NPRM that would set a universal budget cap for the USF program and a joint subcap for the E-rate and rural healthcare programs (see 1905310069). Organizations representing recipients of the programs are resisting (see 1906110071).
The lack of contribution change isn't due to lack of interest among industry and other stakeholders, O'Rielly said. Some state commissioners want to put a fee on broadband, but there hasn't been a meeting of the minds between the FCC and the states. O'Rielly remains opposed to that and is challenged to find new answers. "Please come to us" with new ideas, he told the telecom executives Tuesday. He's open to debating fees for services that are "telecom-like," he told us, such as for conference calling.
Perhaps unlike other commissioners in his party, O'Rielly said, he doesn't want to shrink the Lifeline program, but said it's necessary to eliminate waste, fraud and abuse to protect it. He sees his role as a champion of the ratepayers who doesn't have the time or energy to lobby to protect their interests on contributions they pay into USF programs.
"A budget takes the fun out of money," O'Rielly quipped, but said the action on an overall USF budget cap "is necessary and long overdue." This quarter, the contribution factor hit 24.4 percent, its highest rate ever. "I thought when we crossed 10 percent, the world would end," O'Rielly said. He doesn't favor distributing the contribution factor among phone and broadband services, for example, because that wouldn't change the overall cost to consumers, but would merely shift it. An overall budget cap "is by no means a contribution fix," O'Rielly said, but it would help stabilize the amount ratepayers would pay each month.