State lawmakers from across the U.S. will tackle telecom and technology issues this week at the National Conference of State Legislatures’ annual conference in Seattle. Proposed state and national telecom law rewrites and wrangles over municipal Wi-Fi are among the hot topics at the 5-day conference, which begins today (Tues.). About 7,000 state legislators, policy experts, advocates, govt. leaders and media are expected to attend.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
The FCC voted at its open meeting Fri. to reduce regulation of wireline Internet access service by reclassifying it as an “information service,” in line with the FCC’s treatment of cable modem service. The U.S. Supreme Court in June upheld the agency’s cable modem classification in the Brand X case, triggering action on the wireline companion piece which had been placed on hold during the litigation. DSL is the most common wireline Internet access service.
Analysis of Sen. Ensign’s (R-Nev.) telecom bill (CD July 28 p1) is yielding a common refrain: It’s a good start, but the bill won’t pass as is because of controversial provisions affecting cable, CLECs and municipalities, according to interviews with analysts and lobbyists. Furthermore, Senate Commerce Committee Chmn. Stevens (R-Alaska) is planning his own telecom bill, which he has said he'll unveil in the fall after dealing with DTV legislation. Senate sources said Stevens may gauge the response to the Ensign bill as he drafts his own legislation. Others are pessimistic that there will be time to write an omnibus bill.
Universal service fund (USF) contributions would be applied to all 2-way voice services under a bill introduced late Fri., just before the summer congressional recess. Sponsored by Sens. Smith (R-Ore.), Dorgan (D- N.D.) and Pryor (D-Ark.) , the bill broadens the base of contributors and establishes a separate fund capped at $500 million a year to encourage broadband deployment in rural, “unserved” U.S. areas.
AUSTIN, Tex. -- NARUC adopted resolutions Wed. that call for careful federal review of pending telecom mega- mergers, and suggest a general extension or carrier- specific waivers of a year-end FCC deadline for full implementation of handset-based wireless E-911. However, because of a technicality they voted against a proposal that would have urged states and the FCC to consider naked DSL as a pro-competition tool when reviewing mergers or generally making regulations. The measures, approved by NARUC committees earlier this week, were approved by NARUC’s board Wed. as official NARUC policy.
Sen. Ensign (R-Nev.) Wed. introduced a broad telecom update bill that would erase local video franchise requirements, let municipalities invest in broadband networks via competitive bid and set consumer protection standards for carrier service. The bill did not address universal service fund (USF) reform, an issue Ensign said Senate Commerce Committee Chmn. Stevens (R-Alaska) and co- chairman Inouye (D-Hawaii) want to handle separately. A Committee aide confirmed that Stevens plans to address USF this year, separately or in a larger telecom bill.
Less than a decade after Congress passed a landmark law expanding the types of companies supporting the federal Universal Service Fund (USF), the fund faces a new financial crisis. The main problem, though, isn’t that the fund will run out of money any time soon. Due to fees the FCC assesses on local, long distance, wireless, paging, pay phone and international carriers alike, the USF now takes in about $6.5 billion a year. That money subsidizes rural and low-income residential phone service and communications links to rural schools, libraries, hospitals and other vital services. If the fund needs more cash, the fees automatically are adjusted upward.
Despite pressures at multiple levels, the universal service fund (USF) may finish 2005 without a legislative overhaul. Senate Commerce Chmn. Stevens (R-Alaska) and ranking member Inouye (D-Hawaii) and House Commerce Committee Chmn. Barton (R-Tex.) want USF reform, as do others. Industry wants USF reform. And the FCC is pursuing reform (see accompanying article).
CHICAGO - Federal and state regulators said Wed. they sympathize with concerns about local franchising requirements impeding video competition but doubt the FCC has authority to preempt them. On a panel at the Supercomm show here, FCC Comrs. Abernathy and Adelstein and Cal. PUC regulator Susan Kennedy, considered a maverick who favors federal preemption on some issues, said Congress or state legislatures are better positioned to take such action.
With universal service fund (USF) charges soaring for wireline and wireless carriers alike, the Bells, long- distance providers, rural phone companies, mobile carriers and cable TV operators are pressing for changes in the funding formula. But that’s where agreement ends.