WASHINGTON—The chairman of the House Commerce Committee, never a fan of the universal-service system, took aim Wednesday afternoon at the one area that both the wireless industry and rural telephone companies agree: whether support should be available for one or more lines.
“This is about making certain, or should be about making certain, that anyone in rural America can have at least one telephone. It shouldn’t be about making sure that they have a gold-plated system and multiple subsidies on that one system. It’s not about providing every house with cell phones, computer hookups and the opportunity to chat on two or three lines at once,” said Rep. Joe Barton (R-Texas), chairman of the House Commerce Committee. “The growth that has occurred in the high-cost fund is unacceptable, unsustainable and unnecessary. With the right reforms, that particular program can be brought under control. This would ensure that the program can continue to do what it is supposed to do: provide people in rural areas with affordable voice-grade telephone service over one telephone line.”
What Barton is advocating is known as the primary-line restriction.
Under a primary-line restriction, one carrier would receive support for only one household. Under the current system, carriers receive support based on how many lines they serve. The current system has allowed wireless carriers to receive support for serving rural customers even if the customer continues to use landline service in combination with wireless service.
The Telecommunications Act of 1996 allowed universal-service support to become portable so carriers receive the support for the customers they serve.
In an effort to protect the growth of the universal-service fund, the Federal-State Joint Board on Universal Service in 2004 recommended that support be limited to one primary line.
Rural local exchange carriers have been fighting against wireless carriers for universal-service support since both the amount of subsidies and the number of carriers receiving support have increased. While rural LECs and wireless carriers disagree on most universal-service policy, they agree that the primary-line restriction is a bad idea.
Last year, lawmakers agreed to renew a one-year restriction on any efforts by the Federal Communications Commission to limit subsidies to primary lines. The issue has not come up in the House this year until Wednesday’s hearing, even though the House is working on a telecom-reform bill.
The Senate Commerce Committee will begin marking up its telecom-reform bill this afternoon. The bill has lengthy universal-service provisions but does not include a primary-line restriction.
Wednesday’s hearing by the House telecommunications subcommittee was meant to establish a record if the House is forced to negotiate with the Senate regarding the universal-service system, confirmed Rep. Fred Upton (R-Mich.), chairman of the House telecommunications subcommittee, to RCR Wireless News.
Barton has made no secret of his disdain for the universal-service system, but as chairman he has come to realize that some system is politically necessary.
“I’m not saying that we shouldn’t have some universal-service fund, but the current system is gamble—it’s not fair, it’s out of date. If we can’t kill it, we ought to really, really, really work together on a bipartisan basis to seriously reform it,” said Barton.
The universal-service system was set up in the 1930s to bring telecommunications services to high-cost areas by using long-distance revenues. Complications arose when the Bell monopoly was broken up in the 1980s.
Wireless was criticized at Wednesday’s hearing because wireless carriers receive the same support as rural wireline carriers, and many believe the cost of deploying a wireless network is much less than the cost of a wireline network.
Barton had an answer for this: “Communications providers should receive support, if at all, based on the costs of the lowest-cost provider of telephone service in that particular area,” he said. “In my opinion, this policy should be reversed. No provider should receive more support than what is necessary for the lowest-cost provider in an area to provide basic, voice-grade service.”
CTIA, the wireless trade association, advocated “calculating support based on the cost for the most efficient technology for a geographic area.”
