Modernizing the Universal Service Fund

In meetings at the Federal Communications Commission, Free Press is urging modernization of the federal Universal Service Fund.

The proposal centers around shifting the fund from ongoing support towards forward-looking infrastructure cost support, with better information on total revenue earning potential.

1) Modernize the current regulatory support structure to reflect the lower cost and increased revenue opportunities brought by broadband infrastructure.

2) Many Rural LECs are earning far more in unregulated revenues using USF-supported infrastructure. Part 32 accounting and Part 64 cost and revenue separations is anachronistic in a world of convergence.

3) The need for ongoing high-cost support should be based on forward-looking infrastructure costs and total revenue earning potential. This modernized regulatory structure will reduce the need for ongoing support, as many current Fund-recipients will be able to recoup network costs from the higher per-customer revenues earned from "triple-play" phone, Internet and TV services.