The future of the Universal Service Fund sits at the center of broadband re-regulation and reclassification discussions, which in turns sits at the center of how telecom providers here in the U.S. will be regulated and operate in the future. So it is of no little interest that AT&T and Verizon — the latter in particular with little interest in rural deployments — have been the biggest recipients of federal subsidies for high-cost areas. Specifically, over the past three years AT&T received $1.3 billion in funds to cover the costs of delivering phone service to rural areas, while Verizon received $1.27 billion in the same 2007-09 period.
The Washington Post had additional details, including criticism of that outlay to the industry’s biggest, richest operators:
Lawmakers and public interest groups are questioning the use of those federal funds, much of which appears to go to wireless services areas where telecom companies would be even without support. And they say the fund needs to be overhauled to focus on expanding broadband connections.
Derek Turner, director of policy at the public interest group Free Press, noted that many of those company – including AT&T and Verizon – appeared to use the money for wireless networks. Those companies would have served areas where they received federal subsidies even without the government support, he said.
“The USF process at the FCC doesn’t ask if money is actually needed to ensure access to those areas,” Turner said. “Some areas have as many as19 carriers serving it with USF funds. That is scarce money that could be used for broadband.”
Connected Planet’s take,
Joan Engebretson:
Rural telcos have been complaining about the wireless carriers that get Universal Service funding for years. Now that consumer groups have picked up on this problem, maybe it will finally get some resolution. One element of the National Broadband Plan that rural carriers support is the recommendation that USF funding for cellular carriers should cease (with the exception of some limited funding for areas lacking 3G service).
In the meantime, it is ironic that AT&T and Verizon are the biggest beneficiaries of Universal Service, especially considering that two-thirds of the 7 million U.S. households that do not have broadband are in areas served by price cap carriers (i.e., the big telcos).
That’s our take on this. Let us know what you think in the comments section below: