Boucher/Terry Bill Would Clarify FCC Authority to Migrate USF to Broadband

Universal Service Reform Act of 2010 declares broadband to be universal service

By John Eggerton -- Broadcasting & Cable, 7/22/2010 1:52:08 PM

The FCC won't need to reclassify braodband as a Title II service to clarify its ability to migrate the Universal Service Fund to broadband if a just-introduced bill by Rep. Rick Boucher (D-Va.) and Rep. Lee Terry (R-Neb.) can run the legislative gauntlet.

The bill, which follows up on a USF reform draft Boucher circulated previously for input, is supported by the National Cable & Telecommunications Association, USTelecom and others. NCTA called the Universal Service Reform Act of 2010 "a sound first step to refocus the program on broadband."

"Building on a proposal that NCTA filed with the FCC last year, the bill would establish a permanent mechanism by which the Commission would reassess support levels in competitive areas and reduce or eliminate support where adequate competition exists," NCTA President & CEO Kyle McSlarrow said. "The bill also recognizes the importance of resolving the difficult, but very important, issues surrounding intercarrier compensation reform."

"It declares broadband to be a universal service, so support for the build out of broadband lines would be explicit," according to a summary of the bill. Among other things it would also develop a new model for calculating what companies have to pay into the high-cost fund, which currently subsidizes phone service to areas where the cost to deliver it is too high to make business sense.

It will also reform the fund by reducing the support to incumbent carriers in areas where at least 75% of the households have competitive choices. The bill also requires wireless carriers to bid competitively for USF support.

The FCC has made transitioning USF to broadband one of its goals in the national broadband plan because it argues, and few would dispute, that the Internet is becoming a lifeline service similar to phone and electricity.

"The measure will expand who pays into the Fund, control the growth of the Fund and modernize the Fund by allowing its use for the deployment of high-speed broadband service," said Boucher and Terry in announcing the bill's introduction.

"We endorse this legislation, support its passage and will continue to cooperate as this legislation makes its way through Congress," said Verizon SVP Peter Davidson in a statement.