AT&T, Verizon are rolling in Universal Service Fund dough

While the debate over revamping the Universal Service Fund (USF) swirls in the FCC's regulatory halls, new congressional committee figures show that AT&T (NYSE: T) and Verizon (NYSE:VZ) pocketed $2.5 billion in USF proceeds since 2007. During this three-year period, AT&T got $1.3 billion while Verizon got $1.27 billion in USF funds.

Revamping the outdated USF rules was one of the provisions that the FCC included in the national broadband plan it released in March. Special interest groups and lobbyists argue that USF should be leveraged to extend broadband to underserved areas.

Representative Joe Barton (R-Tex) argues that the FCC should dedicate its energy into updating the USF rules and reducing voice service subsidies. "Subscribers now pay close to 14 percent of their long-distance phone bills to subsidize scores of telephone providers in each geographic market while other providers are serving the same markets without a penny of support," said Barton in a statement.

Barton added that the FCC should focus its attention on reforming the fund instead of reclassifying broadband as a Title II service.

"It is inexcusable that the FCC chairman is trying to reclassify broadband service under the pretext that the commission lacks authority to implement aspects of the national broadband plan, when he should instead be focusing on bipartisan aspects of the plan that he clearly has authority to move on, such as reducing antiquated voice service subsidies," he said.

But if the FCC is looking for a possible model to realign the USF's focus on broadband, they should perhaps look at the Finnish government's drive to provide any consumer or business user a 1 Mbps connection beginning this month.

For more:
- Information Week has this article

Related articles:
FCC's broadband plan calls for higher broadband speeds, USF reform
Finland puts right to broadband mandate into action
FCC to release broadband plan Tuesday
FCC wants to shift USF focus towards broadband
FCC proposes USF reform

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