Lawmakers shouldn’t tap into the Universal Service Fund, said NARUC President Tony Clark and Telecom Committee Chair John Burke. House Republicans are thinking about using USF to help pay down the budget deficit (CD July 14, p1). Congress is considering tapping the fund to help pay down federal debt. To divert the funds from their intended use would be counterproductive and may undermine the country’s broadband goals, they said. USF receives no federal monies and shouldn’t even be under consideration in the budget debate, they said. USF is funded by fees consumers pay through their phone company to ensure affordable access across America, they said.
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.
Congress will finish off Universal Service Fund reform, Rep. Lee Terry, R-Neb., said at a press conference Thursday kicking off rural telecom associations’ marketing push on rural broadband. Terry said he’s “extremely optimistic” there will be a deal by the end of August that’s supported by industry, the FCC and the House Commerce Committee. Also at the event, Sen. Mark Begich, D-Alaska, predicted that the Senate will get “very aggressive” on the issue.
The FCC must not remove state jurisdiction over intrastate communications and preserve the joint governmental structure in its Universal Service Fund and Intercarrier Compensation proceeding, state officials said during a seminar held by the National Regulatory Research Institute Wednesday. Other top concerns for state regulators include cost and contribution methods, they said.
A handful of rural rate-of-return telco executives took aim at the USTelecom-led efforts to create cost models for Universal Service Fund and intercarrier compensation regime reforms, an ex parte notice released Monday showed. USTelecom had brought in analyst CostQuest to create cost models as it continues to lead industry-wide talks on wholesale reform. CostQuest executives have been sitting in on ex parte meetings since at least May to discuss some of their findings (CD May 24 p14).
Top congressional staffers are lending a hand in the ongoing talks on an industry-endorsed Universal Service Fund reform proposal, telco and Capitol Hill officials said in interviews. Ray Baum, senior policy adviser on the House Communications Subcommittee and longtime friend of Rep. Greg Walden, R-Ore.; Nick Degani, legal counsel to the subcommittee; and Brad Schweer, legislative director to Rep. Lee Terry, R-Neb.; have all taken an active part in the industry talks in recent weeks, telco officials and Baum said. Since the November elections, Congress had steered clear of USF, focusing on net neutrality, spectrum, FCC reform and AT&T’s plan to buy T-Mobile. Walden earlier this month said he was “encouraged” by the FCC’s USF efforts, and urged industry to come up with a reform package soon (CD June 8 p5).
CHICAGO -- The FCC’s overhaul of the Universal Service Fund and intercarrier compensation system may take a little longer than had previously been anticipated, an aide to Chairman Julius Genachowski said at the Cable Show in Chicago. Finishing an order on the subjects may take until the fall, said Sherrese Smith, who advises Genachowski on media issues. “I'm only talking about a month or two delay,” not a longer period of time, she told us during a Q-and-A Wednesday. She also said an item on program carriage will be out soon.
Finishing public safety network legislation before Sept. 11 will be a challenge, said Senate GOP aides at an event Thursday hosted by Politico and Microsoft. The Senate Commerce Committee approved the spectrum bill (CD June 9 p2) by Chairman Jay Rockefeller, D-W.Va., and Ranking Member Kay Bailey Hutchison, R-Texas, on Wednesday. But the bill must still get floor time in the Senate and win over House Commerce Committee Republicans who are skeptical of giving away the 700 MHz D-block for free to public safety, the aides said. Also at the event, an FCC aide provided an update on the agency’s work revamping the Universal Service Fund.
The FCC shouldn’t get bogged down in questions of how to classify text messaging for Universal Service Fund contributions or any other piecemeal approach to universal service contribution reform, USTelecom warned the commission in comments posted to docket 06-122 and released Tuesday. “Universal service contribution issues need to be addressed in a comprehensive proceeding, not through ad hoc proceedings, such as those for which the Commission requests comment here,” USTelecom executives David Cohen and Jonathan Banks wrote in their comments.
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The House Commerce Committee is content to let the FCC take a first run at the Universal Service Fund overhaul, a committee spokeswoman told us Friday. “We are waiting to see what the FCC decides to do before we make a decision on whether legislation is necessary,” the spokeswoman said. Congress’ tacit approval of the FCC’s reform schedule had been expected (CD Feb 8 p1) but Friday’s statement comes amidst a blitz by rural telcos trying to get the Hill to intervene in the USF proceedings (CD May 25 p8). On the Senate side, Commerce Committee Chairman Jay Rockefeller, D-W.Va. has said D-block legislation is his “highest priority” (CD Feb 17 p4).