No New Universal Service Fund Rate Says NASUCA

FCC, National Broadband Plan, Universal Service June 10th, 2009

, Reporter-Researcher, BroadbandBreakfast.com

By Ryan Womack, Reporter-Researcher, BroadbandCensus.com

WASHINGTON, June 10, 2009  -  The proposed increase in the consumer contributions to the the Universal Service Fund came under fire Tuesday from the National Association of State Utility Consumer Advocates.

“With high unemployment levels, foreclosures across the nation and everyone’s household budgets being stretched thin, we call on the FCC to reduce the proposed hike in the Universal Service Fund’s contribution level,” NASUCA President David Springe, said in a statement.  The proposed increase would bring the USF contribution to 12.9 percent of a users bill, compared with the previous high of 11.4 percent.

Every telephone user in the country pays into the USF whether they know it or not. Not a tax, the monies are deposited in a trust fund used to maintain and subsidize rural telephone service to places where it would otherwise be prohibitively expensive.

The USF is controlled by the Universal Service Administrative Company, and overseen by a joint board consisting of FCC and state-level commissioners.

The fund has four main goals: ensure reasonable rates for all consumers, assist low-income families in telecommunications, enable rural health care companies telecommunication capabilities, and assist eligible schools and libraries in providing low-cost internet access.

A pilot proposal floated last year by then-FCC Chairman Kevin Martin would expand two USF programs to provide broadband internet access to selected homes, using a $30 million trial system based on the current Life Line and Link Up programs. The proposal was endorsed by the National Association of Regulatory Utility Commissioners at its Winter meeting earlier this year.

With over $7 billion in the USF trust fund according to some estimates, NASUCA says the joint board can easily expend these available funds rather than increase carrier contributions.

While acknolwedging USF’s continued usefulness, Springe suggested the present “[struggle] with a national recession” means consumers needs should weigh heavier on the joint board’s recommendations.  “The goals of the universal service fund are extremely important, but to demand that consumers pay the highest contribution level in history is to hurt the very customers we are trying to help.”

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