VoIP Said to Press Reform of Universal Service
ASPEN, Colo. -- VoIP is exposing the flaws of the Universal Service Fund, but lobbyists here from various industries moving into VoIP had different thoughts on what the program should look like. A panel on regulating the physical layer of the Internet at the Progress & Freedom Foundation Aspen Summit agreed only that universal service is broken and needs fixing.
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CTIA Pres. Steve Largent said “the starting point is wrong” in the debate. The FCC has been taking comments on how new entrants to telephony, specifically VoIP providers, should pay into the Universal Service fund. But Largent said policy makers should instead be asking: “What’s the problem we're trying to fix here?” Largent said “there are high-cost areas and low-income folks who need help,” but the cost and most efficient way to help them must first be determined. He said “the case can be made” that subsidies to CLECs aren’t the most efficient approach, adding there may be competitive phone offerings (for example, wireless) in those areas. The problem, according to the former House member from Okla., is “key senators from rural states” who won’t permit this debate: “That’s wrong.”
Cable “will step up” and help fund USF, said NCTA Senior Vp Dan Brenner. But he repeated NCTA’s FCC comments in saying his industry shouldn’t have to until questions about the fund are resolved. USTA Pres. Walter McCormick, whose members pay into the fund, said “it’s a program that’s lost its way” and has led to the creation of a huge constituency dependent on the funds. But he said “no one is calling for an end to social regulation.” He advocated “subsidizing the infrastructure,” so it’s available for consumers whether it’s used or not, but didn’t want “food stamps” for providers. He also took issue with Brenner’s position, saying “exempting certain forms” of telecom, even temporarily, is “favoring one technology.”
While there was much discussion about the loss of funding for USF in recent years, Pulver.com’s Jeff Pulver told us “the untold story” of the conference is that VoIP isn’t the cause. Pulver said 16 million access lines have been lost the past 4 years, costing the fund $7 billion revenue Half of the losses resulted from homes abandoning 2nd lines acquired for dial-up Internet access in favor of broadband, and the other 8 million are those now using cell phones as their home phone. Pulver said that even with VoIP’s rapid growth, it would be several years before it could equal the impact on the fund of those developments caused. He also said established VoIP providers are contributing to USF, based on fees passed on to them by interconnecting carriers.