WASHINGTON-The wireless industry would take a hit if a universal-service reform bill becomes law, although the bill’s sponsor said the broadband standard was specifically crafted to include wireless.
Reps. Lee Terry (R-Neb.) and Rick Boucher (D-Va.) released the draft of their Universal Service Reform Act of 2005 at a Capitol Hill press conference Thursday.
The bill would expand the base of contributors to the universal-service fund by requiring any provider that primarily offers voice services to pay into the fund, regardless of whether the traffic is local or long distance. Any carrier taking from the fund would be required to offer broadband services with speeds of at least 1 megabit downstream within five years.
Boucher said he thought that all universal-service stakeholders generally would be pleased with the draft, but that everyone also would find something wrong with it. When asked specifically how a bill that seems tilted toward rural wireline carriers would be helpful for the wireless industry, Boucher’s only reaction was that the fund would survive so wireless carriers could continue to receive support as long as they met the stringent criteria contained in the bill. Terry later told reporters that choosing the 1-megabit speed was a direct reference to wireless, which is “where they are now. Otherwise they would have been totally cut off.”
In addition to the broadband requirement, wireless carriers would have to meet specific criteria to be designated an eligible telecommunications carrier, which is necessary to receive USF support. “Imposition of this criteria will reduce the number of ETCs,” said Boucher.
Boucher and Terry are requesting all interested parties submit comments by Dec. 23. They hope to introduce a bill early next year. They are confident House Commerce Committee will consider it, notwithstanding Chairman Joe Barton’s (R-Texas) well-known dislike for the program. Indeed, Barton said earlier in the week that he would like to repeal the universal-service support program.
The wireless industry says it is ready to work on the proposal.
“We applaud the efforts of Reps. Terry and Boucher to address the problems with the universal-service fund. The concepts of capping the fund and broadening the contribution base are particularly important steps. We look forward to working with the congressmen on other aspects of their proposal that would affect the almost 200 million wireless subscribers,” said CTIA President Steve Largent.
The tepid wireless industry reaction was overshadowed by the obvious show of support from the wireline industry.
“Reps. Boucher and Terry have taken a leadership role in crafting legislation that takes a common-sense approach to preserving the future for universal service,” said Walter McCormick, president of the United States Telecommunications Association. “We also strongly recommend that important concepts in this legislation, like broadening the base of support for the fund, tightening the ETC requirements and providing certainty on compliance with the Anti-Deficiency Act, should serve as the core universal-service components for comprehensive reform.”
The universal-service fund was created to give rural Americans services and rates comparable to those offered in cities. It was set up in the 1930s.
With many consumers now using mobile phones and Internet telephony to make long-distance calls, less money is going into the system at the same time that additional providers-mostly wireless carriers that have taken the second-line business from wireline carriers-have begun taking money from the fund.
The Federal Communications Commission is looking at ways to reform the universal-service system. One proposal, a favorite of FCC Chairman Kevin Martin, would assess USF contributions on every phone number. This proposal was blasted Thursday by the Keep USF Fair Coalition, which complained it would raise the cost of telephone service for low-income users.
In a related matter, Verizon Wireless was granted temporary ETC status to serve victims of Hurricanes Katrina. Eligible customers will receive a prepaid handset with 300 prepaid non-expiring minutes. If customers sign up for additional minutes and services, their original minutes will be applied to that account.
The program is restricted to customers living in areas of Louisiana, Mississippi, Alabama or eastern Texas where Verizon Wireless offers service. The program does not cover evacuees still living elsewhere.
“Those are the people that are in the most need,” said Debi Lewis, a Verizon Wireless spokeswoman.
