BURNS DRAFT USF BILL WOULD TAP INTRASTATE REVENUES
Senate Communications Subcommittee Chmn. Burns (R-Mont.) is circulating draft legislation to reform the contribution methodology of the universal service fund (USF). The bill would: (1) Allow the FCC to collect USF support on intrastate telephony traffic. (2) Impose a deadline on the Commission to finish its open proceeding on USF collection methods. Industry sources familiar with the bill said it was likely to be a prominent topic at the Senate Commerce Committee hearing on USF scheduled for Thurs.
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The proposed Universal Service Fund Stability Enhancement Act would delete the word “interstate” every time it appeared in USF-related sections of the Communications Act of 1934. That would broaden the funding base, which now is limited to interstate revenue. The FCC also would have to initiate a contribution methodology proceeding by July 1, 2004, that would have to be completed within 6 months (the FCC already has an proceeding under way on USF contribution.) Mark Rubin, of Western Wireless, said it appeared the bill was formed from information Burns and other gathered through 2 USF “summits” and other recent informational sessions held on USF.
The bill is vague on which format the FCC could consider to create a contribution system that would “ensure the preservation and enhancement of universal service.” It says said the FCC could consider: (1) A revenue-based approach. (2) “Assigned, working telephone numbers.” (3) Connections to the public switched networks. (4) A combination of all of those. It also would establish principles that the FCC would have to follow, including: (1) Achieving competitive neutrality among all providers and technologies. (2) Ensuring long-term sustainability by maximizing participation in the support of universal service among the greatest number of providers of telecom services. (3) Minimizing the need to revise the assessment mechanism so as to minimize carrier costs and consumer confusion associated with such revisions.
Industry sources generally supported the bill, but some raised specific concerns. OPASTCO Pres. John Rose said he generally supported the bill but would push for minor changes. He said he wanted the broadest base of support for USF and some of the bill’s language could limit that support. “We want the greatest base possible. We don’t want it to be limited,” Rose said. By specifying “telecommunications revenue,” he said some broadband services might be exempt from USF responsibility. Rose said OPASTCO supported a revenue-based approach.
Robert Quinn, of AT&T, said the most encouraging part of the bill was its setting a deadline for the FCC to finish its USF proceeding. “The real impact is that it would force the FCC to resolve this by a date certain,” he said. “That’s not such a bad thing.” AT&T supports a telephone number approach to USF contributions, he said, and by expanding the contribution base to intrastate revenue, some of the objections often raised to a numbers-based approach would be eliminated.
One industry source said the vague language on contribution systems was worrisome although Burns appeared to lean toward a revenue-based approach. By specifying “assigned, working” telephone numbers, some carriers that were assigned numbers but hadn’t issued them to consumers could be caught with undue USF responsibility, the source said. There also are questions about the principle of “competitive neutrality” in the bill, which could affect the debate on which carriers should be eligible telecom carriers (ETCs). The Senate Commerce Committee hearing on USF is scheduled for Thurs., 10 a.m., Rm. 253, Russell Bldg.