The bipartisan leadership of the Energy and Commerce Committee and its Communications and Technology Subcommittee today released data submitted by the Federal Communications Commission regarding the Universal Service Fund high-cost and low-income support programs. The data was supplied by the FCC as a partial response to a June 22, 2011 request by the committee regarding USF support payments. Additional data is expected in response to the request in the coming weeks.
"These data confirm what many already knew--that the Universal Service Fund is in trouble," said Energy and Commerce Committee Chairman Fred Upton (R-MI). "After years of uncontrolled growth, the $8.4 billion fund subsidizes incumbents even where unsubsidized competitors can and do offer cheaper service. It supports the build-out of telephone lines where others have already built them, and it imposes few if any cost controls on recipients of its subsidies. This support is not free--it is paid by every American who uses our telecommunications networks."
"We are at a critical juncture for reforming the Universal Service Fund and resolving the problems of the past," Upton continued. "Doing so will not be easy. But I believe that if the industry comes together and if the FCC adopts market-based, technology-neutral mechanisms to target support to the high-cost consumers who need it most, real reform is within reach."
"The FCC data received by the Energy and Commerce Committee once again demonstrates the urgent need for USF reform," said Ranking Member Henry A. Waxman (D-CA). "Fundamental reform is the only way we can eliminate unnecessary funding and target support to bring broadband to the millions of Americans left behind by the current program. Among other things, we need to eliminate duplicative subsidies -- where multiple carriers are being subsidized to offer support to the same areas -- and we need to provide service in the most cost-effective manner possible. Providers must no longer be subsidized based on the costs of their competitors. And we need to do a better job rewarding companies that can provide comparable services at the lowest possible price for consumers."
"Ultimately, the American consumer is paying for an inefficient and outdated Universal Service Program," continued Waxman. "I am encouraged that the FCC is serious about implementing reforms and urge all stakeholders to work towards consensus. The survival of the program requires new thinking and compromise, and I hope the FCC will act quickly and boldly."
"As the FCC moves forward with universal service reform this fall, it is critical that it focus on the data so it can effectively wring out waste, fraud, and abuse from the high-cost and low-income funds," said Communications and Technology Subcommittee Chairman Greg Walden (R-OR). "Putting the fund on sounder financial footing and getting the biggest bang for the ratepayer's buck are necessary first steps towards closing the rural/rural divide."
"I appreciate the FCC pulling together this important data on the USF high-cost and low-income programs," said Subcommittee Ranking Member Anna G. Eshoo (D-CA). "This comprehensive set of data will help guide the Committee's work as we look at modernizing the universal service fund and bringing affordable broadband to all Americans."