AT&T, Verizon get most federal aid for phone service
AT&T and Verizon Communications were the biggest recipients of federal support from an $8 billion phone subsidy program, according to data released Thursday by the House Energy and Commerce Committee.
Over the past three years, AT&T received $1.3 billion in funds to deploy phone lines to rural areas. Verizon got $1.27 billion in the same 2007-09 period.
Lawmakers and public interest groups are questioning the use of those federal funds, much of which appears to go to wireless services areas where telecom companies would be even without support. And they say the fund needs to be overhauled to focus on expanding broadband connections.
“Subscribers now pay close to 14 percent of their long-distance phone bills to subsidize scores of telephone providers in each geographic market, while other providers are serving the same markets without a penny of support,” Rep. Joe Barton (R-Tex.) said in a statement.
The committee's ranking member said the Federal Communications Commission, which oversees the fund and supplied the committee with the data, should be focused on reforming the fund instead of pushing to assert more authority over broadband by redefining Internet access as a telecommunications service.
“It is inexcusable that the FCC chairman is trying to reclassify broadband service under the pretext that the commission lacks authority to implement aspects of the national broadband plan, when he should instead be focusing on bipartisan aspects of the plan that he clearly has authority to move on, such as reducing antiquated voice service subsidies,” Barton said.
Last year, Verizon tapped the most money from the Universal Service high cost fund, mostly because of its acquisition of Alltel.
CenturyTel received $931 million, Alltel received $747 million, and Telephone and Data Systems received $661 million from 2007 through 2009.
Derek Turner, director of policy at the public interest group Free Press, noted that many of those company – including AT&T and Verizon – appeared to use the money for wireless networks. Those companies would have served areas where they received federal subsidies even without the government support, he said.
“The USF process at the FCC doesn’t ask if money is actually needed to ensure access to those areas,” Turner said. “Some areas have as many as19 carriers serving it with USF funds. That is scarce money that could be used for broadband.”
And some projects appear too expensive for the number of people served. Westgate Communications in Washington state, for example, runs 17 separate phone lines at a cost averaging $17,000 per line.
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