Smith Demands Fairness for Rural Telephone Service
Smith Questions Inequities In FCC Universal Service Program
WASHINGTON, D.C.– Today, Senator Gordon Smith (R-OR) urged the Federal Communications Commission (FCC) Chairman Michael Powell to address funding discrepancies in the FCC's Universal Service Program during a hearing at the Committee on Commerce, Science, and Transportation.
"This program may be one of the most poorly targeted programs in the federal government," Smith said in his opening statement. "More than half of the program benefits carriers serving customers in a single state. And only eight states receive funding at all."
The FCC Universal Service Program was created to offset the added costs of providing telephone services to rural areas, which require more infrastructure and have fewer customers than urban areas. The program, which is funded by a federal phone tax, awards grants to telephone companies for investment in rural infrastructure and for subsidizing rural customers. However, the current funding formula yields vastly disparate results. For instance, residents in Oregon pay $2.5 million into the program and receive nothing in return. According to Census data, Oregon has an average of 36 residents per square mile and receives no support. In contrast Alabama, with 88 residents per mile receives $42 million of aid.
As a remedy, Smith introduced the Rural Universal Service Equity Act of 2003 which directs the FCC to change the current formula used to determine grant awards. The bill requires the FCC to distribute the grants based on the specific area of service, rather than the current state-by-state basis. Under the proposed method, Oregon would receive substantial assistance for rural telephone service. Smith's bill has 20 co-sponsors and enjoys wide-ranging bipartisan support.
"This program acknowledges the problem of affordable rural phone access, but without including all rural states it's badly flawed," said Smith. "In the information-age, refusing rural communities affordable phone service is to deny hardworking Americans access to the 21st century economy."
