Chairman Walden on USF Reform, AT&T/T-Mobile

House Commerce Subcommittee on Communications and Technology Chairman Greg Walden (R-OR) spoke to the Oregon and Washington Telecommunications Associations on June 7. His topics included the Universal Service Fund, Intercarrier Compensation reform, and the proposed AT&T/T-Mobile acquisition.

On Universal Service Fund reform, the Subcommittee has ben working with the Federal Communications Commission to implement several principles:

• Cap the high cost fund and each sub-fund and analyze each for waste, fraud and abuse.
• Use market-based, technology-neutral mechanisms—such as competitive bidding, models, and bench marks—to right size the Fund and target the subsidies to consumers in high cost areas who need it most.
• Subsidize unserved areas, but only those that are otherwise uneconomic for the private sector to serve keeping in mind the existing business and regulatory models that may need, where appropriate and on a reformed basis, access charge replacement in the form of continuing USF support.
• Wring out waste, fraud, and abuse from the high-cost fund and the rest of the Universal Service Fund by periodically re-examining whether areas remain “high cost” and creating performance measures to evaluate what works and get the biggest “bang for our buck.”
• Migrate the Fund to support broadband deployment as reforms are implemented and the fund is put on sound financial footing.
• Focus infrastructure buildout on areas not receiving broadband stimulus grants or loans or other broadband subsides to avoid paying twice for deployment of the same infrastructure.
• Overhaul the contribution methodology to lower the administrative burden on businesses and to reduce the drag on efficiency it represents.

On AT&T's acquisition of T-Mobile, he said, "It is far too soon to judge the merits of this merger. I will wait for the record to be complete and the evidence to come in before making up my mind." He announced that his Subcommittee will hold a hearing on the merger at some point in the next few months. He identified two concerns:

"First, America’s economic growth and vitality is dependent on competitive and innovative free markets. I am thus interested in learning whether the merger promotes competition for consumers and encourages innovation in the technology manufacturing sector. If not, it may lead the industry further into the watering hole of government regulation.

Second, I am concerned about the 'public interest' conditions the FCC might place on the merger if approved. Conditions placed on any merger should be limited to those conditions necessary to address risks to consumers that arise as a direct result of the merger. Mergers should not be used to impose conditions that are better suited for generic proceedings where all industry and consumer groups have an equal opportunity to weigh in."