COALITION RECOMMENDS NEW WAYS TO FUND UNIVERSAL SERVICE
Coalition charged with coming to consensus on future of universal service offered policymakers 7 options for funding program in coming years as new technology makes current system less practical. In report Thurs., Consumer Energy Council of America (CECA) deliberately didn’t pick one of 7 options, saying Congress, FCC and Federal-State Joint Board on Universal Service should have full range of thinking by group. Broad-based organization included representatives of state and federal govt., consumer groups and wide variety of industry including long distance companies, incumbent LECs, CLECs and wireless providers. About 60 people were listed in report, although not all of them attended every meeting. Report will be submitted to FCC as ex parte filing and will be sent to key members of Congress.
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Group wasn’t able to agree on some policy goals such as whether to extend universal service subsidies to advanced services and instead recommended further study. However, fact that members were able to identify key issues during 6 months of meetings and learn to better understand each other’s views will be valuable in future, representatives said. Report lays out pros and cons of variety of universal service issues. “The good part is that through all these meetings no one threw anything,” joked BellSouth Vp Robert Blau. “For the first time, we have a synthesis of all the important issues” relating to future of universal service, he said. WorldCom Dir.-Law & Public Policy Charles Goldfarb said: “I no longer approach this issue only as an IXC” but also understand other viewpoints. CECA specializes in “consensus- building” sessions in which it brings disparate parties together on particular issues to seek common views. Pres. Ellen Berman said CECA had helped develop such agreements in several other industries and was considering session on spectrum policy issues. CECA projects are funded by participants.
Coalition did agree on one important thing, said coalition chmn. and former White House and FCC official Kathleen Wallman: It agreed that universal service program should be continued because it had valuable social goals. Despite occasional calls by individuals and organizations for ending subsidies to high-cost areas, group determined that having ubiquitous telephone system was important to economy, she said. “It’s not about feeling sorry” for those without service, she said, it’s realization that people in high-cost and low-income areas are needed to help contribute to economy.
Group said new funding sources for universal service could be necessary in future as new technology and service packages eroded current interstate revenue base. For example, IP telephony doesn’t contribute to universal service funding and bundled local- long distance packages offered by wireless providers make it hard to break out interstate revenues for universal service contribution purposes.
Seven alternative funding plans group proposed: (1) Seek funding from all interstate revenues, meaning ISP revenues would be added to mix for first time. (2) Expand on Option 1 by also adding intrastate revenues, which would lower per-contributor cost significantly. (3) Expand first 2 options by adding revenue from discounted services and products purchased under e-rate program. (4) Use general tax revenues to fund program instead of using telecom revenues. Variation would be to use tax revenues to supplement rather than replace telecom revenues. Supplement could be used to make up funding shortfalls that might occur occasionally “or, more boldly, to fund expansion of the program to underwrite broader access to advanced and enhanced network services.”
(5) Use existing excise tax, which telecom companies have been trying to get eliminate. Wallman said idea was “if it’s hard to get rid of, maybe it should be put to better use.” (6) Create flat per-line assessment on users, perhaps with higher rates for business users than residential lines, with rate dropped to zero for low-income consumers. (7) Assess per-number charge similar to Option 6 but exempting any telephony that didn’t use traditional 10-digit telephone numbers, such as IP telephony.