Key lawmaker moves to reform phone subsidy, USF
Rep. Rick Boucher (D-Va.), chairman of the Communications Subcommittee, introduced a bill Thursday that would cap the Universal Service Fund, put more money toward broadband access, and change the way regulators determine who receives the subsidies.
“The Universal Service Fund is broken," said Boucher and Rep. Lee Terry (R-Neb.), who co-sponsored the bill, in a statement. They said consumers pay more than 13 percent of long-distance bills into the annual $8 billion phone service subsidy.
"Our legislation … 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," they said.
Take a look at our story this week on the fund, and calls by lawmakers, big telecom firms, public interest groups and the Federal Communications Commission to reform it. Also, AT&T wrote a blog post critcizing my story, for your information.
Boucher and other lawmakers have introduced USF reform bills in the past. The FCC has also tried to create rules that would allot more money from the fund to broadband service providers. Those efforts have been unsuccessful, with rural carriers and rural lawmakers resistant to changes they say could hurt their businesses and local economies.
Except for rural communications service providers, all major telecom, wireless and cable firms Thursday came out in support of Boucher and Terry's bill.
Here are highlights of the bill:
* Requires fund recipients to offer high-speed broadband within five years of the date of getting funds. The FCC would determine speeds for those networks.
* Directs the FCC to develop a new cost model for calculating high-priced support that takes into account the cost of providing voice service and high-speed broadband service. The new model will replace the FCC’s existing calculation methodology for rural and non-rural carriers.
* Limits universal service support in areas where there are service providers providing voice and broadband services to 75 percent of the area.
* Requires the FCC to adopt a competitive bidding process to determine which wireless providers get funds.
* The USF will constrain the fund size.
July 22, 2010; 4:18 PM ET
Categories: Broadband , FCC
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