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House Again Talks USF Reform, But Will It Go Anywhere?

Here we go – again. Federal lawmakers, independent of the regulators at the FCC, want to reform how the USF works.

The House Communications, Technology and Internet Subcommittee on Thursday held a hearing with phone companies and consumer advocacy groups to start discussing just how to make the USF work in a broadband world. The fund does not allocate subsidies for high-speed Internet network buildouts, not even the notoriously bloated High-Cost portion of the fund.

Unfortunately, the hearing provided little more than “Groundhog Day” replays of past such hearings. That’s because one critical point so far has remained constant: No one agrees on which changes to implement because everybody wants what’s best for their interests and few entities are willing to compromise.

There was one new-ish twist, however. Some subcommittee members questioned why the government doesn’t just dissolve the USF entirely.

“Why should I tax people when AT&T just announced it would spend $12 billion on broadband in 2009?” Reuters quoted Rep. Cliff Stearns of Florida, the panel’s ranking Republican, as saying.

Meanwhile, Texas Republican Joe Barton – former chairman of the House Energy and Commerce Committee, which oversees the technology subcommittee – said the USF should be shut down because money often is ill-spent and unaccounted for. But, he said, if that can’t happen, the fund should at least pay for useful technologies.

So the question becomes, what next? Are lawmakers planning to work with the FCC on proposed USF reforms or are we going to see separate proposals for change that ultimately won’t mesh and therefore take years to resolve? Or will we just see more months of discussion with little action?

And that’s the crux of it. Government and industry for years have talked about USF reform. Granted, the FCC late last year came close to voting on some proposals but those arguably were misled in too many areas. And now commissioners are busy dealing with the digital TV transition and broadband stimulus fund distribution rules.

One thing is clear: Industry players must agree on some compromises. No one company can have its way in full, especially those that don’t plan on building out to high-cost, underserved regions. Maybe there’s some merit to the idea of shuttering the USF. Thoughts?


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