FCC Pushes to Overhaul Subsidy Program for Rural Phones

FCC PUSHES TO OVERHAUL SUBSIDY PROGRAM FOR RURAL PHONES
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz@wsj.com]
Alarmed at the growth of a multibillion-dollar federal phone-subsidy program, regulators are beginning an effort to curb costs and prevent consumers from paying more in fees. As soon as today, the Federal Communications Commission is expected to open for public comment several proposals to revamp the Universal Service Fund, which subsidizes phone services for low-income and rural customers. The program's budget ballooned to about $7 billion last year from $5.2 billion in 2002 as more companies sought to tap the federal revenue stream -- a transfer of money collected from consumers through surcharges on phone bills. The charge is usually found on a phone bill itemized as a "federal universal service charge." One proposed change calls for using a reverse-auction system to pick which phone companies receive multimillion-dollar payments for providing phone service in rural areas. A separate plan would lower the amount of money wireless companies receive to offer service in rural areas. For the first time, the FCC also will look into whether money should be set aside to subsidize broadband Internet lines. Changing the subsidy program won't be easy. The 11-year-old program has amassed a devoted group of supporters, and previous efforts to rein in the program have mostly failed.
http://online.wsj.com/article/SB120148455929220793.html?mod=todays_us_ma...
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