WASHINGTON-Personal Communications Industry Association President Jay Kitchen blasted the Federal Communications Commission last week for ignoring congressional requests to reduce paging carrier contributions to the $2 billion annual universal service fund.
“The commission’s actions … are clearly inequitable and discriminatory for PCS (personal communications services) and paging carriers,” said Kitchen. “The wireless industry is the only segment in telecommunications yielding lower rates for consumers in the face of competition. These burdensome regulations imposed upon wireless carriers will derail this robust competition.”
Kitchen, vowing to appeal the ruling all the way to the Supreme Court, said the FCC failed to heed entreaties to lower the paging contribution to the fund from Senate Majority Leader Trent Lott (R-Miss.), John McCain (R-Ariz.), chairman of the Senate Commerce Committee, and Billy Tauzin (R-La.), chairman of the House telecommunications subcommittee. The fund is designed to raise money to subsidize basic telephone service and Internet access for schools, libraries and rural health-care facilities.
McCain said that while he supports advanced telecommunications for education and health care, “I question whether the creation of a huge new federal subsidy program to do it is either necessary or consistent with what the Congress intended when it passed the Telecom Act of 1996.”
McCain also criticized the FCC for leaving in limbo the formula for funding rural and high-cost areas in the new universal service fund.
The cost factor looms big in view of the FCC’s companion decision to reduce by $18.5 billion access charges paid by long-distance companies during the next five years to local landline telephone companies. Only a small percentage of the forgone $18.5 billion will be made up by charging consumers $1.50 for each extra telephone line beginning Jan. 1.
As such, it remains unclear whether the Clinton administration can deliver on its promise to link schools, libraries and rural health-care facilities by 2000.
Unlike PCIA, the Cellular Telecommunications Industry Association was relatively sanguine in response to the FCC’s universal service fund ruling.
“Consistent with CTIA’s lobbying efforts,” the trade group told members in a fax memo, “the plan does not impose a surcharge on wireless customers in order to meet the universal service funding goals. Instead, the FCC adopted a competitively neutral contribution mechanism based on end-user telecommunications revenues.”
Rep. Edward Markey (D-Mass.), ranking minority member of the House telecommunications subcommittee, applauded the FCC ruling and said the “decision marks a renewal in America’s commitment to educational opportunity for all its citizens.”
But the sharp criticism leveled by regional Bell telephone companies, PCIA and GOP congressional leaders is likely to lead to oversight hearings and litigation.
A decision is expected soon by the 8th Circuit Court of Appeals on challenges to the FCC’s interconnection order, which together with universal service and access charge reform comprise the three key components of the 1996 telecom law.
“I think the White House is happy and the rest of the telecommunications industry gets left in the dust,” said Rob Cohen, director of congressional affairs for PCIA.
