Reform USF to avert a telecommunications crisis

I represent an urban congressional district in Nebraska. As I like to tell my colleagues, my district has more concrete and paved roads than dirt. However, I do understand the needs of people outside of cities. In particular, I recognize the current and future importance of maintaining access to critical telecommunications services in rural areas.

Without such access, Americans in many areas are being denied important opportunities created by the modern economy. Beyond the obvious considerations for rural America, the entire nation will suffer the results of excluding millions of Americans from the telecommunications revolution now well underway.

The Universal Service Fund (USF) is central to the goal of delivering accessible and affordable telecommunications technologies to rural areas.  The USF has been remarkably successful in accelerating the deployment of the nation’s extraordinary telecommunications infrastructure. Without a working USF program, preserving and extending this advancement will not be possible.

During the past several years, however, the very viability of USF has been jeopardized by rapidly increasing payments to wireless providers — payments that threaten to make USF unaffordable for consumers.

According to publicly available data, USF payments to wireless providers grew from $15 million in 2001 to almost $1 billion in 2006, an annual rate of increase of more than 100 percent.  Projections suggest that the situation will continue to deteriorate at alarming speed through the end of the decade.

Although a seemingly obscure matter, failure to address the status of the USF imperils decades of progress in connecting rural America to the telecommunications infrastructure. To forego corrective action would be hugely irresponsible.

Accordingly, the Federal-State Joint Board on Universal Service has recommended a temporary cap on USF payment to wireless providers. By holding these payments to current levels on a temporary basis, the joint board seeks to allow the time needed to develop a more stable USF funding mechanism.

As a champion of strengthening USF, I strongly support the joint board’s recommendation as an essential reform of a system headed toward collapse. Such an outcome would have profoundly negative consequences for the future deployment of telecommunications services in low-population-density regions. Moreover, the national implications of impeding the availability of affordable telecommunications services are significant.

Globalization is substantially increasing competition for high-wage jobs and professional services. Continued U.S. economic expansion demands that Americans participate in the worldwide marketplace, something impossible without broad and affordable access to a robust set of telecommunications technologies. Although appropriately focused on the specific challenge of the fiscal viability of USF, the implications of the joint board’s recommendation extend well beyond what may appear to be a narrow question of funding formulas.

The joint board is attempting to address an urgent problem through much-needed reform.  If unrestrained, rapidly rising USF support to wireless providers threatens to render unsustainable the entire USF program.

Opponents of the joint board recommendation have made a number of allegations designed to scuttle the temporary cap.  In particular, wireless interests have claimed that the cap will harm cell phone service in rural areas. There is no reason to believe that this is true. To the contrary, USF support will continue to flow at current levels, rather than increase year after year at an unsupportable rate. The real threat to the availability of affordable telecommunications in rural areas is a collapse of USF, which the joint board is earnestly working to avert.
The joint board’s decision to impose an interim emergency cap on USF payments to wireless carriers recognizes the source of the explosive growth in the USF. Imposing a cap on these payments is a necessary first step in USF reform.

The nation has a compelling interest in securing the USF and, as a result, promoting American competitiveness by making affordable telecommunications services available throughout America on an unprecedented scale.

Terry is a member of the House Energy and Commerce Committee.

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