WASHINGTON-A powerful lawmaker called for wireless carriers to get universal-service subsidies for deploying towers in rural America.
“We should let cell-phone companies get additional price support to expand cell-phone towers into rural America,” said Sen. Ted Stevens (R-Alaska), chairman of the Senate Appropriations Committee.
Stevens’ suggestion was part of a six-point list of universal-service principles he presented at a Senate Commerce Committee hearing Thursday that examined how the universal-service system can or should be reformed.
Another of Stevens’ principles could limit the amount of support wireless carriers could receive. In rural areas where it is determined that a wireline loop would cost at least $24, each recipient of universal-service support would receive a subsidy based on its costs to serve the customer. Support is currently based on the incumbent’s costs. Some have argued that it is less expensive to deploy a wireless network than a wireline network.
Stevens was not the only one with suggestions. Sen. Conrad Burns (R-Mont.), chairman of the Senate communications subcommittee, is drafting legislation to direct the Federal Communications Commission to examine and change the USF contribution system.
“Despite the FCC’s very constant tinkering, the current assessment mechanism has not resulted in sufficient funds to preserve and advance these goals. The fact remains that funds that are reflected are constantly shrinking. Clearly the system is in bad need of expanding the base of contributors,” said Burns.
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, 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 long-distance providers.
“We have had a drastic drop (in interstate revenue). The FCC has dealt with this by simply increasing the contribution rate assessed to providers of interstate telecommunications services from 3.9 percent in 1998 to 7.3 percent in the second quarter of 2002 to the current rate of 9.2 percent. Simply put, this trend is unsustainable,” said Burns. “The status quo system is broken, and without reform, the universal-service system is imperiled.”
FCC Chairman Michael Powell was the sole witness at the hearing. “I am happy to announce that because of stepped-up enforcement efforts, the contribution factor for the first quarter of next year likely will drop below 9 percent, as opposed to increase to 10 percent as was feared,” said Powell.
