By Mark Huffman
ConsumerAffairs.com
July 23, 2010
If you have long distance service, you pay into the Universal Service Fund, established by Congress in the early 20th century to expand telephone service to rural areas.
Since rural America currently enjoys telephone service, wouldn't it make more sense to use that money to expand broadband services to rural areas? Lawmakers in both parties think it might.
Rep. Rick Boucher (D-VA), Chairman of the Subcommittee on Communications, Technology, and the Internet, and Rep. Lee Terry (R-NE) have introduced the Universal Service Reform Act of 2010. They say the measure would improve and modernize the Universal Service Fund (USF) by reining in the size of the fund and promoting broadband deployment.
"The Universal Service Fund is broken," Boucher said. "Consumers currently pay more than thirteen percent of long distance revenues into the fund and have at times this year contributed over fifteen percent. Our legislation is a comprehensive and forward-looking measure, which will control the spiraling growth of the Universal Service Fund while ensuring that sufficient universal service support is available on a technology-neutral basis to the carriers which rely on it to provide service."
"The measure will expand who pays into the fund, control the growth of the fund and modernize the fund by allowing its use for the deployment of high-speed broadband service," said Terry.
Expanding broadband
The legislation declares broadband to be a universal service and requires universal service fund recipients to offer high-speed broadband services throughout the areas where they receive support. The measure recognizes that it may not be economical to serve the most remote areas with wireline technologies and permits the resale of satellite broadband to ensure broadband availability in those places.
"The current Universal Service fund has failed to keep up with the changing telecommunications landscape," said Terry. "This bill is a comprehensive approach that will ensure high speed broadband service is available to many more customers in Nebraska and across the nation, especially in rural areas."
Providers generally welcomed the bill. Verizon issued a statement congratulating Boucher and Terry for updating the Universal Fund for the broadband era.
"They recognize the universal service program was designed for a different time and that with consumers shouldering its ever-increasing costs, reform is overdue," the company said in a statement.
"We agree that universal service reform is necessary and look forward to working with Congressmen Boucher and Terry to make certain that the universal service program serves the needs of 21st century consumers, who are increasingly relying on their wireless services and products for everything from health to learning," said CITI, an association representing wireless providers.
Competitive bidding
Boucher and Terry say their bill will limit universal service support in areas where there is competition among providers of voice and broadband services and direct the Federal Communications Commission to adopt a competitive bidding process to determine which wireless carriers will receive universal service support.
The measure also directs the FCC to establish and implement performance goals for each universal service fund program and to determine the appropriate methodology for audits of universal service fund recipients.
