WASHINGTON-Universal service was a hot topic in Washington last week with two House panels hearing testimony, a think-tank seminar and an ad campaign by TracFone Wireless.
“The Federal Communications Commission’s proposed change would impact every landline and cell phone, charging the user $1 or more per month-regardless of how much or how little they use their phone,” said FJ Pollak, chief executive officer and president of TracFone Wireless based in Miami. “Under the connection or number-based proposals, the long-distance companies would greatly reduce if not eliminate their current universal-service fund collection and remittance responsibilities.”
TracFone’s ads appeared in the Washington Post and the Washington Post Express and urge consumers to visit its Web site www.tracfone.com/usf to contact the FCC.
Today wireless carriers finance about 30 percent of the universal-service fund, but only get about 2 percent of the money available, John Stanton, chairman, director and chief executive officer of Western Wireless Corp. told the House telecommunications subcommittee.
“That really goes to the question of when you are contributing to the fund, should you receive from the fund, and the answer is `no,’ because all telecommunications carriers contribute to the fund, but not all telecommunications carriers are eligible to receive from the fund,” said FCC Commissioner Kathleen Abernathy.
Abernathy told the House telecom subcommittee that the FCC is examining whether receiving money from the universal-service fund means that certain obligations are expected.
The FCC is examining this issue because there is a concern that the USF could go bankrupt as long-distance revenues plummet. The universal-service fund is financed by interstate and international telecom revenues.
One reason long-distance revenues are shrinking is that buckets of minutes, where consumers pay one price for local and long-distance service, offered almost exclusively by wireless carriers, have become increasingly popular. Many consumers who have signed up for bucket plans from their mobile-phone carriers now use wireless for their long-distance calling rather than using a long-distance provider.
Rural wireline carriers, which often are at odds with wireless carriers-most particularly Western Wireless-have said that wireless carriers that are certified as eligible telecommunications carriers should be regulated in the same manner as incumbent local exchange carriers. Their representative at the House telecom subcommittee hearing, Sidney Shank, general manager of Bloomingdale Telephone Co. based in Bloomingdale, Mich., repeated this theme.
“No. 1, we are regulated,” said Shank. “We will provide service to each and every customer in our exchange.” Wireless does not work in all areas, she added.
Because wireless carriers are now eligible to receive from the universal-service fund, there is a fear that it will end up like the social-security system, said Rep. Billy Tauzin (R-La.), chairman of the House Commerce Committee.
“The amount of money available to make sure everybody has a phone is diminishing while demand grows, so it is sort of like the social-security system. We started with 15 people working for every person collecting social security. We are down to less than three who are working to support every person who is retired, and it has become a stressed system and this (the universal-service) system is becoming stressed,” said Tauzin.
After RCR Wireless News’ deadline, the House Small Business Committee was scheduled to meet to discuss universal service, and the Progress and Freedom Foundation was slated to hold a universal service seminar. Stanton was on the list of participants in the PFF event.
