The Federal Communications Commission is wisely looking at ways to reform subsidies for expanding telecommunications services and to use some of that money to provide fast Internet connections across the country. Its fixes so far, however, have penalized rural areas and mobile communications without reining in spending or reallocating funding. This shortchanges consumers in Maine and other rural states rather than helping them.
Earlier this year, the FCC temporarily capped payments to wireless phone from the Universal Service Fund. Now it proposes to permanently cut the funding nearly in half and to use that money for Internet connection upgrades.
The Universal Service Charge, usually about 10 percent of local, interstate and international line charges, is used to raise money to subsidize high-cost rural phone companies, Internet and telecom connections for schools and libraries, phone service for low-income customers, and telecom costs of health care providers that use telemedicine.
Each year, the Universal Service Fund collects about $7 billion, $3 billion of which comes from wireless customers. Since 1999, the fund has allocated $3.2 billion to wireless carriers for service improvements and expansion; $25 billion has gone to land line carriers.
Maine residents pay more than $30 million annually in USF fees, with about $13 million going to wireless carriers.
With growing numbers of firefighters, police officers and other first responders reliant on wireless communications, ensuring an unbroken network of service is essential in rural states like Maine. Until that work is complete – Maine’s two cell phone companies that receive USF money are adding new cell phone towers every year – money should not be diverted from wireless improvements. With less funding, fewer towers will be built each year, delaying the time when most of the state (it is unrealistic to expect every remote spot to have cell phone coverage) will have reliable wireless service.
Putting off better wireless coverage in favor of a more extensive broadband network is not a good trade-off.
That’s why the Maine Legislature last year passed a resolution calling on the FCC and Congress to rethink the USF cap. The resolution noted that the goals of the Telecommunications Act of 1996, which created the Universal Service Fund, have yet to be realized in many Maine communities. Further, the failure to have high-quality wireless service at affordable rates remains a barrier to economic development.
Ensuring the Universal Service Fund supports needed telephone infrastructure work while looking for ways to include broadband in the fund makes sense. Doing this at the expense of better cell phone service in rural areas does not, so the FCC should rethink the proposed funding cuts.