Upton: Is Universal Service Fund Still Needed? - Broadcasting & Cable

Upton: Is Universal Service Fund Still Needed?

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While on the Senate side, Commerce Committee Chairman Ted Stevens is working to preserve and expand the Universal Service Fund, House Telecommunications Subcommittee Chairman Fred Upton is asking whether the fund is still needed at all.

Stevens, from the rural state of Alaska, has long championed the fund, which underwrites telecommunications service to rural and underserved areas, including possibly expanding it to cable voice service providers and Internet service. Upton, by contrast, is holding a hearing this week on whether the fund is still needed now that the phone network has been built.

A draft of the Senate Commerce Committee bill on telecom reform contains a section on the fund, while the already-passed House bill, which came out of Upton's subcommittee, does not.

"After the invention of the telephone, 'universal service' policies ensured hard-to-reach rural areas got phone service through subsidies funded by users in urban areas, where it was much cheaper to build this new communication network," said Upton in announcing the hearing Wednesday, June 21.

"While this raised phone prices in urban areas, it raised the value of phone service by giving more people access to the network, "he said.  "Is this subsidy still needed now that the telephone network has been built? Can the goal of universal service be better supported with more efficient technologies like wireless?"

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