Fund to subsidize rural phones faces dispute

FUND TO SUBSIDIZE RURAL PHONES FACES DISPUTE
[SOURCE: St Louis Dispatch 6/13, AUTHOR: Tim Logan tlogan@post-dispatch.com]
Rural telephone companies and wireless companies agree on this: the Universal Service Fund -- which eats up nearly 12 percent of every American's phone bill to subsidize certain phone services -- needs to be fixed. They don't agree on much else. They sit at opposite ends of a debate that's been roiling the telephone industry in recent weeks: whether the expansion of wireless phone service across rural America under the $7 billion fund should be capped while federal officials redesign the program for a fast-changing telecommunications world. The federally-mandated fund subsidizes a number of things, including high-cost service in parts of the country that no phone company will serve on its own. That part of the fund has soared in recent years, from $2.6 billion in 2001 to $4.1 billion in 2006. Most of the growth has been driven by wireless companies that are using the fund to build cell towers. In contrast, spending by landline companies has been relatively stable in recent years.
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