Federal Lawmakers Introduce USF Reform Act

Congressional Reps. Rick Boucher, D-Va., and Lee Terry, R-Neb., have introduced a bill to reform the Universal Service Fund (USF).

Boucher and Terry on Thursday released the text of their bill, the Universal Service Reform Act of 2007. They are members of the House Energy and Commerce Committee, which oversees telecom. The bill proposes to cap the funds growth, provides ideas for controlling distributions from the fund and would spur the rollout of high-speed Internet access by allowing the USF to pay for broadband services deployment.

Additionally, Terry said the proposed bill would lessen demand for universal service support it would limit the number of eligible carriers and compensate them on their actual costs of providing service.

A variety of new voice services providers have entered the marketplace since the enactment of the Telecom Act of 1996, and they have remained exempt from USF payments. That means traditional service providers shoulder the greatest USF funding burdens, Terry and Boucher said. Their bill would close the gap between rural and urban communities, Terry said, allowing for all of America to compete in the global market place with both products and ideas.”

Key supporters of the proposed legislation include, among others, AT&T Inc.; the Coalition to Keep America Connected; the National Telecommunications Cooperative Association; Qwest Communications International Inc.; and USTelecom.

The reform act is one of very few telecom bills to be presented in this session of Congress. Last years session was a frenzy of activity regarding net neutrality and overall telecom reform; this year, lawmakers have lain low on telecom, tackling more pressing matters such as the Iraq war and the scandal surrounding Attorney General Alberto Gonzales.

The FCC is expected to address changes to the USFs funding mechanism sometime this year, too; so far it has made little progress. Last year, however, it did broaden the base of USF contributors. VoIP providers now pay 64.9 percent of their interstate revenue, which can be hard to pinpoint. Many VoIP users are mobile and while they might have California area codes, for example, they actually can be in Arizona making in-state calls.

The agency wants to ensure the $7 billion fund does not shrink, a problem that would mean less money for schools, libraries and low-income citizens.

The Universal Service Reform Act now faces committee hearings.

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