Republicans Want ‘Antiquated’ USF System Changed
House Commerce Committee Republicans criticized the high cost of subsidies under the Universal Service Fund, saying the FCC needs to forget about net neutrality and concentrate on fixing “antiquated voice service subsidies.” That came after the release of information provided to the committee by the commission in response to a June 15 request from Chairman Henry Waxman of California, Ranking Member Joe Barton of Texas, Communications Subcommittee Chairman Rick Boucher of Virginia and Communications Subcommittee Ranking Member Cliff Stearns of Florida.
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The data show that AT&T was the top recipient of high-cost payments for 2007, 2008 and 2009 combined, receiving $1.3 billion. It received $435 million last year. Verizon received $680 million in 2009 after acquiring Alltel, previously ranked fourth amongst the recipients, and $1.28 billion over three years. CenturyTel received $352 million in 2009 and $931 million over three years.
The areas with the highest per-line subsidies most irked the congressmen. The FCC said Westgate Communications in Washington state received the highest subsidy, at $17,763 a line, with an average of 17 lines. Adak Tel Utility in Alaska got $12,894 per line with an average of 171. Border to Border in Texas received $12,757 per line with an average of 139 lines. The other companies receiving the highest support were located in Hawaii, Arizona, Michigan, Oklahoma and Colorado. “In some parts of the country, there are up to 20 providers receiving subsidies,” Stearns said. “Yet the data further reveals that some subsidized areas are highly competitive, being served in whole or in part by more than 60 providers that do not receive any support, calling into question the size, structure and purpose of the subsidies.”
The FCC also listed the subsidies for competitive eligible telecommunications carriers. In some cases, such as for Westgate, it didn’t list any competitive ETCs receiving subsidies. It did show 10 wireline and four wireless competitors in the area. For Adak Tel, the agency listed one competitor in 2009, whose support per line is $6,502, less than Adak’s. In the case of Border to Border, its competitor’s support per line is $13,038, higher than Border to Border, and it serves an average of 15 lines, fewer than Border to Border. The FCC also listed six wireless carriers in Border to Border’s area that cover from 14 percent to 100 percent of the area. The commission cautioned that the figures aren’t directly comparable because per-line support is generally calculated at a level below the reported study area level.
The figures also show net receiver and net payer states, with payer states generally being the most populated. In 2009, Florida made the largest net contribution to USF at $272 million. California, though the largest gross contributor at $829 million, made the second largest net contribution at $245 million. The largest recipients were Mississippi at $255 million and Alaska at $220 million.