Democratic FCC commissioners said Monday that a study on broadband deployment in North Carolina illustrates the need for federal government involvement in a national broadband strategy. At a New America Foundation forum, Commissioners Michael Copps and Jonathan Adelstein said such a plan should be based on a partnership between the public and private sectors.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
LAS VEGAS -- FCC Commissioner Jonathan Adelstein believes reforming universal service in 2008 is “worth trying,” aide Scott Bergmann said Tuesday in a Wiley Rein panel on USF at NXTCOMM. Officials from Sprint, Embarq, Cisco and Verizon agreed reform is needed, but disagreed on the details.
The FCC, as expected, approved a cap on payments to competitive eligible telecommunications carriers under the high-cost Universal Service Fund program. Also as expected, wireless carriers voiced deep concern about the cap exerting a chilling effect on their efforts to participate in the USF program. Wireless attorneys said some carriers may challenge the order in federal court. An accompanying FCC statement issued Friday said the cap clears a path for further reform.
FCC Commissioner Robert McDowell announced Monday that he had cast an electronic vote supporting a cap on the high- cost Universal Service Fund. He became convinced that a cap is needed because the contribution factor - the proportion of long-distance revenue that carriers must contribute to the fund -- is again on the rise after declining last year. McDowell’s support gives Chairman Kevin Martin the deciding third vote in favor of a cap (CD April 28 p1). Commissioner Michael Copps previously voted against the cap. All the commissioners but Jonathan Adelstein have voted, sources said.
Affordable voice service for those in need, not financial support for carriers, would be the “paramount” aim of the universal service program, according to draft legislation released Monday at a Free State Foundation panel discussion. Proposed by House Commerce Committee ranking member Joe Barton of Texas, the bill drew panelists’ praise as embodying proposals with widespread support.
FCC Chairman Kevin Martin circulated late Friday changes in an order approving a Universal Service Fund cap that likely mean approval of a cap within days, we've learned. Counting Commissioner Robert McDowell’s support, Martin has three votes for the high-cost fund cap. Commissioner Deborah Tate backed the cap while Commissioner Michael Copps cast a no vote.
U.S. Cellular met with members of the Federal-State Joint Board on Universal Service to argue against a cap on the fund, which is now before FCC commissioners, it said. The carrier said in an FCC filing that it stated at the meeting that “there is no crisis in USF funding,” with the fund down 16 percent last year. It called the cap “the wrong move at the wrong time,” institutionalizing discrimination that exists in the fund. U.S. Cellular pointed out that Mississippi now gets $140 million from the high-cost fund, compared to $2 million in Missouri and $100,000 in Illinois. “Since 1999, Wireless has drawn $3 billion and wireline has drawn $25 billion,” the carrier said.
Wireless carriers’ advice to the FCC on Universal Service Fund reform varied sharply, as companies and groups commented on three rulemakings on the universal service fund. A general message was that wireless must play a significant role as the fund is restructured. There was broad support for an advanced mobility fund. But wireless players disagreed on the wisdom of eliminating the identical support rule or launching reverse auctions to shrink the fund. Comments came as the FCC poised to approve a fund cap many in wireless fear will hit their sector the hardest (CD April 1 p1).
Subsidy caps and reverse auctions proposed to rein in a rapidly growing Universal Service Fund split wireline carriers by geography, in comments to the FCC. While Verizon urged a high-cost cap and auctions, rural groups said the reforms would undermine broadband deployment efforts. Meanwhile, wireline groups didn’t contest a proposal to kill the identical support rule. Wireline groups also expressed mixed feelings on a Universal Service Joint Board proposal to expand high-cost support to broadband and wireless.
LAS VEGAS -- The pending FCC order approving a Universal Service Fund cap does not have a sunset date, as was recommended by the Federal-State Joint Board on Universal Service, sources said Thursday. The order grants more than 40 pending applications for eligible telecom carrier (ETC) status. It also caps the fund at March 31 levels. FCC Chairman Kevin Martin has yet to circulate text of the order, complete with proposed edits, but is expected to do so in days. Sources said the order will likely have at least three votes if it contains expected language, with Martin and Commissioners Robert McDowell and Deborah Tate in support.