Smith Continues Push for Equity in
Universal Service Fund
Smith Questions Inequities In FCC Universal Service Program
WASHINGTON, D.C.– Today, Senator Gordon Smith (R-OR) reiterated the need to address funding discrepancies in the FCC's Universal Service Program during a hearing at the Committee on Commerce, Science, and Transportation.
"The Universal Service Program that is supposed to help ensure affordable telecom services for the majority of rural Americans is grossly unfair and needs to be reformed," Smith said in his opening statement. "If we do not act soon, Universal Service funding will soon fall short of its needs. We cannot allow this to happen."
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 29 co-sponsors and enjoys wide-ranging bipartisan support.
"In theory, this program alleviates the problem of affordable rural phone access, but without including all rural states it is ineffective," said Smith. "In the information-age, refusing rural communities affordable phone service is to deny hardworking Americans access to the 21st century economy."
