Wednesday, November 18th, 2009
By Andrew Feinberg, Deputy Editor, BroadbandCensus.com
WASHINGTON, November 18, 2009 - The Universal Service Fund is in need of an overhaul to equalize costs among stakeholders and modernize programs to include broadband services, a group of industry representatives and regulators told the House Energy and Commerce subcommittee on Communications, Technology and the Internet during a Tuesday hearing.
The hearing examined a discussion draft of the Universal Service Reform Act of 2009, authored by subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb.
The Universal Service program, which existed for decades before being codified in the 1996 Telecommunications Act, is under "tremendous pressure" and requires a comprehensive effort to reform its operations, Boucher said during opening remarks.
Reform is needed because new technologies for long distance voice communications have reduced the available revenue that can be tapped to fund current programs, leading to soaring costs for consumers – a projected 14 percent of revenues in January of 2010, he said.
Such an increase and a maintenance of the status quo is simply "not sustainable," Boucher said. The Boucher-Terry bill would cap the high cost portion of the fund while requiring wireless carriers who participate to do so through a competitive bidding process. Such legislative...
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Monday, October 5th, 2009
By the Staff of BroadbandCensus.com
The universal service fund has been growing at an alarming rate over the past few years, and in order to curb its growth the Federal Communications Commission choose to cap the amount of support a competitive eligible telecommunications company could receive in 2008. The Rural Cellular Association filed a petition in the D.C. Circuit court of appeals to remove this cap. The court seemed to support the position of the FCC in capping the fund, according to a Monday research report by
Stifel Nicholas.
Even though the cap is in place, the FCC has allowed eligible recipients of Universal Service Funds to petition to receive an increase in current support if they need more funds. The rural cellular group believes that the petition mechanism that the FCC has setup is not fair, as there is no benchmarking to compare against.
There has been a large amount of criticism about the funding of competitive telecom companies, due to the fact that the amount a company receives is based upon the funding request a company asks for not an objective amount based upon customers services or presumed costs. The current USF system is clearly broken, said Stifel, and...
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Tuesday, July 21st, 2009
By Douglas Streeks, Reporter-Researcher, BroadbandCensus.com
WASHINGTON, July 21, 2009 – A panel of broadband experts agreed Monday that the Universal Service Fund should direct more of its funding to low-income areas and away from exclusively focusing on rural high-cost areas, where funds are not being spent efficiently.
The experts spoke during a panel discussion sponsored by the Technology Policy Institute, a market-oriented think tank on technology issues.
The term universal service, said Jonathan Nuechterlein, a partner at Wilmer Hale law firm, has two different meanings.
One meaning has to do with funding for broadband in high-cost areas where deployment is expensive, regardless of the residents’ income, and the other has to do with funding for low-income areas.
“Funding broadband,” said Nuechterlein, “is expensive” and is going to “increase the burden on the companies that end up subsidizing it.” One way to ensure that this money is spent efficiently is to “narrow the scope” by only funding broadband in “genuinely unserved areas,” he said.
The whole “cluster of issues” dealing with universal service legislation, said Nuechterlein, “is tied with inter-carrier compensation.”
Traditionally, small rural carriers depended on carrier-to-carrier networks to fund their expenditures, but because there are now ways to avoid public access charges, the whole system is...
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Thursday, June 18th, 2009
By Andrew Feinberg, Deputy Editor, BroadbandCensus.com
WASHINGTON, June 18, 2009 - The Senate Commerce Committee on Thursday voted to advance the nominations of Julius Genachowski (D) and Robert McDowell (R) to serve on the Federal Communications Commission.
If approved by the full Senate, Genachowski would serve as chairman and McDowell would serve a second term on the regulatory body.
"Julius Genachowski has my resounding support," Chairman Jay Rockefeller, D-W.V., said in a statement. "He offers the public and private sector experience needed to reinvigorate the FCC and put consumers first."
Although he voted to advance McDowell out of committee "in the spirit of bipartisanship," Rockefeller said he has "concerns" about the choice: "I want to be clear that I have high expectations that Mr. McDowell will show great independence from the industries he regulates," he said. "I hope I am not disappointed."
While information regarding a final passage vote for either nominee was available from Senate leadership, Rockefeller indicated he would briefly place a "hold" on McDowell's nomination so McDowell could answer questions regarding his commitment to sustaining the E-Rate program, which uses Universal Service Fund dollars to connect schools and libraries to the...
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Wednesday, June 17th, 2009
By Douglas Streeks, Reporter-Researcher, BroadbandCensus.com
WASHINGTON, June 17, 2009 – The effort to increase broadband adoption has mainly focused on increasing broadband access and availability to drive demand, this may not be enough to increase broadband adoption.
That was the message that non-profit representatives and a consulting firm agreed upon in a panel discussion, titled “Making Broadband Affordable for All Americans,” and hosted by the Internet Innovation Alliance at the Washington Newseum on Wednesday.
While broadband access availability is rapidly increasing, adoption is not following at the same rate due to lack of affordable computer equiptment, hardware and installation challenges, and digital illiteracy among potential consumers.
Howie Hodges, senior vice president of business development and government affairs at the non-profit One Economy Corporation, said to correct this problem, the Universal Service Fund should be reformed to include broadband. Further, the federal tax system should incentivize the application and adoption of broadband for providers and consumers, he said.
In order to increase availability among low-income people, said Hodges, the Department of Housing and Urban Development should be required to included broadband installations in all renovations to public housing.
Focusing on installing broadband to affordable housing will accelerate broadband affordability for low income people, he said.
Additionally, many do...
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Monday, June 15th, 2009
By Ryan Womack, Reporter-Researcher, BroadbandCensus.com
WASHINGTON, June 15, 2009 - Reports of the death of American broadband have been greatly exaggerated, said a group of economists Friday at a panel on broadband market competition sponsored by the Progress and Freedom Foundation.
Groups like Free Press who routinely cite international statistics to support a thesis of market failure in broadband are overly pessimistic, said Thomas Hazlett, Director of Information Economy Project and professor of law at George Mason University. "We're all falling behind…the decline is on and we’re all sinking into the abyss," he said sarcastically. Whether or not the American market is truly a duopoly can be tested empirically, Hazlett suggested.
Emperis managing partner Jeffrey Eisenach called the U.S. rankings and duopoly claims “two big misconceptions with the state of the world." Recent OECD rankings are "100 percent wrong," he said. And charges of a duopoly fail because of differences between services offered to residences and business.
Regardless, because American broadband was deregulated just five years ago, “competition is driving innovation," he said. Europe has very little fiber deployed in comparison to Verizon's deployment of fiber to many American markets, he noted. And when one counts DSL, Cable, and 3G networks of both AT&T...
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Monday, February 16th, 2009
News
By Andrew Feinberg, Reporter, BroadbandCensus.com
WASHINGTON, February 16, 2009 – With $7.2 billion in fiscal stimulus grants and loans marked to expand broadband infrastructure, industry groups, consumer advocates and some state regulators are supporting a proposal to fund broadband for low income households by tapping into the Universal Service Fund.
Thus far, the USF established by the Federal Communications Commission principally funds universal telephone service (and internet connections for schools and libraries), although there are numerous concerted efforts to extend USF monies to broadband.
The USF is funded by assessments on voice telephone service and administered by a Federal-State board of regulatory commissioners.
Last November, the FCC sought comment on a proposal supported by then-Chairman Kevin Martin for a pilot program that would subsidize broadband internet to low-income households.
Martin's proposal would make broadband Internet providers meet eligibility criteria for the USF’s Lifeline and Link Up funds. The programs are used to offset the cost of both monthly telephone service and connection charges for households that fall under a certain income threshold.
The Martin plan was put forward after TracFone, a reseller of prepaid wireless service, became the first wireless company eligible to receive Lifeline subsidies. Rick Brecker, a Greenberg Traurig attorney who represents TracFone before...
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Monday, February 16th, 2009
News
By Andrew Feinberg, Reporter, BroadbandCensus.com
WASHINGTON, February 16, 2009 – The CEO of Frontier Communications, America's second largest rural telecommunications, provider told state utility commissioners Monday that quality broadband internet service is the key to shoring up a rapidly evolving rural economy.
Frontier Communications chairman and CEO Maggie Wilderotter addressed the growing demand for advanced services in rural Americans during a keynote presentation to the National Association of Regulatory Utility Commissioners committee on telecommunications.
Frontier, provides telephone, television, broadband and wireless services to some 2.4 million customers, and is for many the only option for those services, Wilderotter said. From her company's vantage point, it is easy to comprehend the importance of "full, fair, and affordable communications... to the unserved and the underserved, " Wilderotter said.
Wilderotter explained that rather than farming, most rural Americans own or work for small businesses. And those small businesses "deserve better" than what many telecommunications companies have offered them, Wilderotter said.
The rural economy can best be strengthened by bridging the digital divide, Wilderotter said. Rural customers don't want broadband service just for watching videos, she explained, but instead need it "for commerce and education - and creating and finding jobs."
Improved broadband service let rural consumers and businesses compete...
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