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State News: August 2009


 

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Revamping Universal Service

The Universal Service Fund was established in the 1996 Telecommunications Act. Among the program’s goals are promoting availability of services at affordable rates for all consumers, including those in rural and high cost areas. It includes four programs, two of which—high cost and low-income—are devoted solely to voice communications such as telephone service. The others—schools and libraries, commonly referred to as E-rate, and the rural health care program—include data transmission such as Internet service.
The fund draws its dollars from assessments—or extra charges—to telecommunications providers on their interstate and international revenues, according to the Federal Communications Commission Web site.
While the discussion to make changes to the fund is drawing attention from many sectors, there seems to be little consensus on just what those changes should be.
For instance, the Recovery Act is pushing for broadband deployment in unserved and underserved areas—many of them rural. When a Congressional subcommittee held a hearing on the Universal Service Fund in March, Free Press, a national nonpartisan group that includes universal access to communications among its goals in working to reform the media, supported changes to the fund that made broadband a priority.
That would mean money from the Universal Service Fund would be used to support broadband in rural areas.
Free Press Research Director S. Derek Turner advocated fixing the fund—which Free Press believes is “deeply flawed”—by transitioning from telephone service to broadband infrastructure. Free Press believes that process can begin with the broadband grants included in the Recovery Act, according to a press release from the organization.
In fact, the House Communications, Technology and Internet Subcommittee discussed reforming the “high cost” portion of the Universal Service Fund to underwrite the broadband build-out. It’s that portion of the fund that ensures people in rural areas pay the same for telephone service as those people in urban areas. If applied to broadband access, people in rural areas would presumably pay the same for broadband service as people in urban areas.
But some say there are problems with that approach.
A group of broadband experts said during a panel discussion sponsored by the Technology Policy Institute in July that the Universal Service Fund should direct more of its funding to low-income areas and away from exclusively focusing on rural high-cost areas.
AT&T, one of the nation’s largest telecom providers, in June said the FCC cannot get serious about a national broadband plan until it fixes the Universal Service Fund. AT&T argues fewer people will be paying those fees because of the move from landlines to wireless and Internet phones.
AT&T has long supported reform of the Universal Service Fund.
“… The existing universal service and intercarrier compensation system was conceived for the voice-centric wonders of the black rotary phone, and is not conducive to the dynamic world of broadband,” Robert Quinn, AT&T’s senior vice president of federal regulatory, said in a statement in April. “Failure to revamp these rules will endanger the future growth of broadband, and the affordability of today’s broadband services.
Any reform of the Universal Service Fund will affect the states, according to Bochat of NASTD. “All states contribute to the fund and receive benefits from one or more of the funds,” she said.
There are no easy answers, said Arkansas’ Bailey.
“As a nation, what we have to look at—and we have to look at this carefully—is as technology changes, how do we utilize the Universal Service Fund to ensure we are still promoting that level of access,” she said.
—Mary Branham is managing editor for State News magazine.

 

 

 
The Basics: The Universal Service Fund
The Universal Service Fund was established in the 1996 Telecommunications Act to make sure all consumers have access to telecommunications at affordable rates and to increase nationwide access to advanced telecommunications services, according to the Federal Communications Commission Web site. The fund is especially targeted for those in low-income, rural and high-cost areas. It gets money from telecommunications providers to fund the four supporting programs:
The High-Cost program ensures people in rural, insular or high-cost areas have access to telecommunications services at rates comparable to those in urban areas. Eligible carriers that serve those areas are able to recover some of their operating costs from the Universal Service Fund, according to the FCC.
The Low-Income program offers discounts on telephone installation and monthly telephone service to qualifying customers. Additional discounts are available to qualified subscribers living on tribal lands, according to FCC.
The Schools and Libraries program, commonly referred to as E-rate, provides affordable telecommunications services to eligible schools and libraries, especially those in rural and economically disadvantaged areas, according to FCC.
The Rural Health Care program provides funding to eligible health care providers for telecommunications services—including broadband—necessary for providing health care. The program’s goal is to improve the quality of health care available to patients in rural communities. The program provides discounts on telecommunications services by eligible rural health care providers, according to FCC.
For more, visit the FCC at http://www.fcc.gov/wcb/tapd/universal_service/#skipintro.
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