U.S. Senators Fight Plan to Limit Rural Phone Funds

US SENATORS FIGHT PLAN TO LIMIT RURAL PHONE FUNDS
[SOURCE: Bloomberg, AUTHOR: Molly Peterson mpeterson9@bloomberg.net]
US senators from largely rural states said they oppose a proposal by regulators to set new limits on some government subsidies of telephone service. The Federal-State Joint Board on Universal Service suggested last month that the Federal Communications Commission should impose an 18-month "emergency cap" on subsidies to new wireless carriers to rein in "explosive growth" in the Universal Service Fund's High Cost Program. The board consists of three FCC Commissioners and state regulators from Oregon, Florida, Indiana, Vermont and West Virginia. The High Cost Program, which subsidizes phone networks in rural areas and other underserved regions, is growing at an unsustainable rate, FCC Commissioner Deborah Taylor Tate, who heads the joint board, told the Senate Commerce Committee. The subsidies, funded by surcharges on consumers' phone bills, grew to $4 billion in 2006 from $2.6 billion in 2001, with payments to newer wireless carriers accounting for most of the growth. Under the plan, subsidies for "competitive" carriers, mostly newer wireless providers, would be frozen at 2006 levels. Without the cap, subsidies for those carriers will grow to $1.28 billion this year and almost $2 billion in 2008, Commissioner Tate said.
http://www.bloomberg.com/apps/news?pid=20601204&sid=aDGMQCECzXkk&refer=technology
* Senators In Both Parties Pan FCC's Plan For USF
Senate lawmakers from both parties sharply criticized the FCC on Tuesday for changes that it wants to make to the universal service fund and urged the agency to take the lead on a comprehensive overhaul. The rancor revealed dissension over how to update the fund, which subsidizes telecommunications offerings in rural and low-income regions nationwide. "Someone is putting their head in the ground. This is an ostrich approach as far as I'm concerned," Ted Stevens of Alaska, the ranking Republican on the Senate Commerce Committee, complained during a hearing. He presided in lieu of Chairman Daniel Inouye (D-Hawaii). Sen Stevens was one of several lawmakers to blast a May 1 recommendation by the FCC's Joint Federal-State Board on Universal Service to temporarily cap USF subsidies flowing to competitive telecom carriers, mostly wireless firms.
http://www.njtelecomupdate.com/

* Lawmakers Criticize FCC's Tate Over USF Reform Proposal
http://news.morningstar.com/news/ViewNews.asp?article=/DJ/200706121223DOWJONESDJONLINE000454_univ.xml&Cat=Industrials

* Senators oppose plan to curb phone taxes
http://news.com.com/Senators+oppose+plan+to+curb+phone+taxes/2100-1039_3-6190596.html?tag=html.alert.hed

-- Links to remarks made at the hearing

* Chairman Inouye: "[W]e cannot let short-term proposals free us from the need to address long-term reform. If comprehensive reform requires a more vigorous review of the identical support rule or any other aspect of existing policy, we should proceed down that road. After all, ensuring the long-term sufficiency and stability of the universal service fund means ensuring that all of our citizens have the communications capabilities they need to compete in the global economy."
http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Statement&Statement_ID=263

* Sen Snowe (R-Maine) podcast
http://src.senate.gov/public/_files/radio/snoweuniversalfund06_12_07.mp3

* FCC Commissioner Tate:
http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=1873&Witness_ID=6105

* More
http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=1873