California Dem wants USF accounting from telcos

With AT&T and Verizon delivering strong second quarters and Embarq poised to release its results after market close today, you knew there had to be some bad news for telcos on the horizon.

It arrived in the form of a demand from Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee. He wants an accounting from 24 telcos on how they’re using the billions in Universal Service Fund subsidies. His Top 10 list: AT&T ($1.3 billion in subsidies), Alltel ($967 million), Verizon ($915 million), CenturyTel ($870 million), Telephone and Data Systems, Inc. ($558 million), Embarq ($310 million), Citizens Communications Company ($300 million), Sprint Nextel ($282 million), Windstream ($250 million), Qwest ($233 million), and America Movil ($140 million).

The USF monies are supposed to help telcos recover loses they sustain in providing telephone service in underserved communities.

Although small rural carriers insist that Universal Service provides a lifeline to places where it is simply too expensive for the private sector to go, many in Congress and at the Federal Communications Commission warn that the current program is not sustainable.

According to FCC data provided to the House committee, Beaver Creek Telephone Co., which serves parts of the Pacific Northwest, received a per-line subsidy of $13,660 last year, while Sandwich Isles Communications Inc. in Hawaii received $13,535 per line. Waxman also sent letters to those companies.

For more:
- See the AP story at CNNMoney