Sen. Sununu Slams Universal Service Program

[SOURCE: Technology Daily 12/7, AUTHOR: David Hatch]
Sen. John Sununu (R-NH), a member of the Senate Commerce Committee, sharply criticized the $6 billion universal service program and said it should be reined in -- putting him odds with several powerful committee colleagues who want to maintain or expand its size and scope. "Universal service is a tax. We should call it a tax," he said during remarks late Wednesday afternoon to the Progress and Freedom Foundation, which supports capping the fund's size. "It distorts the marketplace. There's no question about it." He blamed the fund for protecting archaic business models and undermining technological innovation. While he acknowledged that it benefits some consumers who otherwise cannot afford phone service, he argued that it prevents telecom companies from rolling out new technologies to other citizens. "It results in inequity and inequality in that it is a redistribution of wealth," Sen Sununu said, contending that some recipients of the money -- particularly schools and libraries in rural but otherwise economically sound areas -- should not be benefactors. Sen Sununu said Congress should cap the fund's size and avoid creating "an open-ended entitlement," but emphasized that he does not oppose its existence. He said the subsidy could be reduced without necessarily compromising its effectiveness, and argued that a well-structured $5 billion fund could be far more effective than today's $6 billion effort. Conversely, he said, "you could spend $10 billion on a program that's an absolute disaster."
http://www.njtelecomupdate.com/lenya/telco/live/tb-CEWS1134081001692.html