House jawbones rewrite of Universal Service Fund to complement broadband stimulus

Lawmakers in the U.S. House of Representatives opened up discussion on the hot-button issue of reworking the Universal Service Fund (USF). Past efforts have gone for naught.

Rep. Rick Boucher (D-Va.), who chairs the Energy and Commerce Committee's Subcommittee on Communications, Technology, and the Internet, said policymakers need to figure out how USF should complement the $7.2 billion in economic stimulus monies allocated for broadband builds.

Boucher suggested it may be time to impose an obligation for broadband into the concept of universal service, with a certain minimum speed.

Needless to say, phone company representatives speaking before the subcommittee had a problem with the idea. Embarq's CEO said it would cost his company $2 billion to extend broadband to all of its customers, while Verizon EVP Thomas Tauke said "It's a stretch for carriers."

Carrier representatives did agree that subsidies need to be handed out more carefully, with Embarq noting that serving town centers is cheaper than extending service out to outlying areas where both the population density is lowest and the return on investment drops.

One alternative may be to subsidize service at individual central offices, rather than basing payments on a company's average statewide costs. Qwest serves many rural areas, but gets little USF funding under the current scheme.

Boucher also wants to cap the size of the now $7 billion USF, but consumer advocates say it will cost more than that to have universal broadband access everywhere.

For more:
- Dow Jones via reports from Capital Hill. Post.

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