Hearing Summary - Universal Service: Transforming the High-Cost Fund for the Broadband Era

On June 24, the Senate Commerce Committee held a hearing on transforming the Universal Service Fund from its traditional role of lowing monthly telephone bills to supporting broadband deployment and adoption.

Although he did not chair the hearing, Commerce Committee Chairman Jay Rockefeller (D-WV) released a statement saying, "Universal service is a cherished principle. In years past, it has meant that this nation connects every community with basic phone service. But in years ahead, it must mean that we connect our communities with broadband. This subject is not simple, and updating the universal service system is not easy. But it is enormously important, and it is the right thing to do."

Sen Byron Dorgan (D-ND) chaired the hearing and in his opening remarks said that the National Broadband Plan is "dangerously undermined" by the Comcast/BitTorrent court decision. He said the Federal Communications Commission should reclassify broadband transmissions under Title II. But Sen John Ensign (R-NV) said that classifying broadband under Title II would work against the goal of universal deployment by discouraging investment. He said the areas that will suffer are not Los Angeles or New York, but the rural and high-cost areas that the Universal Service Fund is trying to reach.

Sens Ensign and John Thune (R-SD) both asked the FCC commissioners whether they thought the FCC could reform USF without reclassifying under Title II. Commissioner Meredith Baker said she thought there was enough authority under Title I for USF reform (though not for the FCC's proposed expansion and codification of network neutrality rules). Commissioner Michael Copps called it a "questionable proposition," and said it could suffer a death of a thousand cuts from lawsuit after lawsuit. Clyburn could not say it would be impossible to migrate the fund under Title I authority, but noted the BitTorrent decision had made it more difficult, and that the FCC's legal minds had said they didn't think it would be legally sustainable.

Sen Dorgan also asked the FCC commissioner why the FCC has called for broadband speeds in rural areas well below the speed goals set for most other Americans. Commissioner Clyburn said the four-megabits speed was picked because it is the speed currently enjoyed by most U.S. broadband subscribers. Commissioner Copps noted that the goal "is to get comparable service at comparable prices. Our focus is on getting broadband to folks at a level of other subscribers." Commissioner Baker added that the four-megabits goal for rural areas is just a recommendation and pledged to work with Congress on the issue.