Senators back new broadband taxes
Summary
Topics
At a Tuesday hearing convened by the Senate Commerce Committee,several senators from largely rural states called for expansion of the Universal Service Fund (USF), a multibillion-dollar pool of money that's currently used to subsidize telecommunications services in rural and other high-cost areas, schools and libraries.
Committee Chairman Ted Stevens, an Alaska Republican who counts himself among the fund's staunch supporters, said Tuesday that "withoutUniversal Service, just having a dial tone would average about $200 permonth" for many residents in his home state.
Right now, long-distance, wireless, pay-phone and wireline telephoneservices are required to contribute a fixed percentage of their revenuesto the fund, which they typically do by tacking an additional fee ontotheir customers' bills.
But supporters of the fund, which gives out on average more than $5billion each year, say it has dwindled because traditional services,such as long-distance, are taking in less money, while unanticipatedvoice technologies, such as voice over Internet protocol (VoIP), are notexpressly required to pay up. (A number of the larger voice overInternet protocol providers, including Vonage, have said they already pay into the fund, but there doesn't appear to be a formal regulation requiring them to do so.)
Several senators said they want to change that by making USFcontributions "technology neutral," which for many means scooping upbroadband services both as contributors to--and benefactors of--thefund. The debate reflects Congress's broader attempt this year toupdate the 1996 Telecommunications Act, which critics have deemed outdated because it fails toaccount for the explosion of the Internet.
Stevens, for one, said he thinks all "communications" services, which hedefined for reporters after the hearing as "transmitting knowledge fromone person to another," should be forced to pay into the USF. "I believefax is a communication, I think e-mail is a communication, and I dobelieve they all should contribute," he said.
He isn't the only one. Sen. Conrad Burns, a Montana Republican on theCommerce Committee, introduced a bill earlier this month that would require contributionsfrom "every provider of "telecommunications, broadband service orbroadband voice service," including all cable, DSL, spectrum, and otherbroadband providers.
His bill, however, appears to word its contribution mandate for"broadband voice" services broadly enough to include not only voice overInternet protocol providers but also free, voice-based instant messagingservices. Derek Hunter, a spokesman for Burns, told CNET News.comrecently that his boss's bill isn't intended to sweep up the latterbreed of services.
Politicos in the U.S. House of Representatives
Who pays?
At Tuesday's hearing, debate also centered on the appropriatemethodology for the Federal Communications Commission to use todetermine payments to the fund. Representatives from smaller cable andtelecommunications companies urged the senators at Tuesday's hearing toleave federal regulators the flexibility to settle on any tactics theyplease.
FCC Chairman Kevin Martin has indicated he is leaning toward a "numbers-based" approach,in which anyone with a phone number would pay into the fund. TheNational Cable and Telecommunications Association, and the VONCoalition, which represents VoIP interests, also support that approach.
"Simply to say that broadband as broadband, whatever that might be, hasto pay into USF would be an error, but the telephone service portion ofthat certainly should pay into USF," Tom Simmons, vice president ofpublic policy for Midcontinent Communications, a small SouthDakota-based cable company, told the senators.
Paul Garnett, assistant vice president of regulatory affairs for theCellular Telecommunications Industry Association, countered that anumbers-based approach would be unfair. He said the cell phone industry,which already pays into the fund, thinks broadband providers should alsohave to pay a fee for each active connection--what it calls a"capacity-based" approach.
Though all the senators at Tuesday's hearing clearly agreed on theneed for USF reform, their priorities differed. For instance, JimDeMint, a South Carolina senator who has introduced a broadly deregulatory proposal advocated phasing out USF handouts entirely in certain areas where new broadbandtechnology is actually less inexpensive to deploy than its telecommunications predecessors.
"As we look for fairer ways to spread the cost out," he said, "I thinkwe need some ideas on how we can move areas away from subsidization andmove into competition."
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