WASHINGTON-The issue of broadband availability for all Americans was a reoccurring theme on Capitol Hill last week as lawmakers of all political stripes and from all parts of the country weighed in on whether and how the universal-service program should be reformed.
The Senate Commerce Committee held two hearings-one on contributions and one on distribution. No Democrats appeared at the distribution hearing, but a champion of universal service, Sen. Jay Rockefeller (D-W.V.) said at the contribution hearing that his constituents want access to broadband services.
“I am afraid that in trying to referee between the various interests, we have forgotten the true meaning of universal service for all Americans,” said Rockefeller. “I reject the notion that universal service means the status quo.”
In a separate event, high-tech leaders said broadband is essential and said all flavors of broadband should be covered by universal service. Today universal-service support is not supposed to subsidize broadband, it is only for voice, but since it is used for the upkeep and upgrade of rural networks, many rural networks are capable of delivering broadband services.
Allowing for multiple flavors of broadband also eventually will increase the take rate for broadband services since competition lowers costs, said Kevin Kettler, chief technology officer of Dell Inc.
“Whenever you have competition, you have a greater opportunity for the consumer as prices for services begin to fall,” said Kettler. “Ultimately this will lead to a greater take rate.”
A new member of the Senate Commerce Committee had a different view about multiple players in the broadband space. “I want to be on record as saying that I want rural America to have broadband service, but I don’t want to keep subsidizing both the sewer and the septic tank for folks living in the country,” said Sen. Jim DeMint (R-S.C.).
At both hearings, DeMint showed himself to be an opponent of the current universal-service program and advocated making significant changes.
At the contribution hearing, lawmakers heard that there should not be just one method of financing the universal-service fund.
“Congress should empower the Federal Communications Commission to utilize any of the contribution methodologies currently available-all revenues, numbers, including successor identifiers, connections or any combination of these methodologies,” said Glen Post, president and chief executive officer of CenturyTel Inc. “Not one methodology is sufficiently robust and resilient to provide the long-term stability that is necessary for universal service. Locking the FCC into a single methodology or even a single combination of methodologies would be short-sighted. The pace of technological change is rapid enough that any attempt to prejudge a specific methodology at this or any point in time is almost certainly doomed to obsolescence. A broader, non-prescriptive framework will provide the commission maximum flexibility to evolve contributions mechanisms to adapt to developing technologies and services. Allowing the FCC flexibility in choosing combinations of methodologies will also enable the commission to preclude the arbitrage that any single methodology, in isolation, would be subject to.”
FCC Chairman Kevin Martin has long advocated assessing universal-service contributions based on telephone numbers, but this proposal has been met with criticism from low-volume users who believe they would be punished for keeping their telephone costs down. Today universal service is assessed on long-distance revenues.
One of the major complaints about the universal-service program is that there is rampant waste, fraud and abuse, but Martin is hoping to change that. Last week, Martin asked the House Appropriations commerce subcommittee to allow the commission to move more than $20 million from the universal-service fund to the FCC so it can better monitor the program.
The proposal was met with skepticism from lawmakers.
“It seems like an awful lot of money,” said Rep. Alan Mollohan (D-W.V.), ranking member of the House Appropriations commerce subcommittee.
