Senate Commerce Committee leaders say they are worried that a plan to get broadband to more people could end up costing phone customers money. They urged the Federal Communications Commission on Wednesday to watch out as it overhauls an $8 billion telecom subsidy fund.
The so-called Universal Services Fund is paid for by a fee that gathers cash to roll out traditional phone service to underserved rural areas. The FCC wants to use money from the fund to provide broadband instead, but some senators said at a committee hearing that they fear the effort could end up raising landline rates.
“Consumers need to get more value for what they pay for—not less,” said Senate Commerce Chairman Jay Rockefeller, D-W.Va.
His GOP counterpart, Sen. Kay Bailey Hutchison, R-Texas, had the same concerns. “Consumers can’t afford the constantly increasing fees and I hope that we will be able to fully utilize what is there without further raising the rates,” Hutchison said.
The senators’ entreaties echo those of consumer groups who have panned a reform proposal written by a group of telephone companies, including AT&T and Verizon.
Free Press lawyer Matt Wood says the telco plan, which the FCC studied as part of its official reform process this year, could add several dollars per month for landline customers. Consumers pay into the USF through a line item on their phone bills.
FCC Chairman Julius Genachowski circulated a reform plan within the agency. The plan is under revision in consultation with the commissioners, who are scheduled to vote on it on Oct. 27.
State regulators, cable companies, and consumer groups are worried the FCC may cater too much to telephone companies. A state regulator invoked a tension between the phone industry and consumer interests during the hearing.
“Any reform must benefit the consumers and not the bottom line of carriers, assure accountability, and maintain build-out and service-quality requirements – a role that states are best positioned to handle,” said Philip Jones, commissioner for the Washington Utilities and Transportation Commission.
But the phone industry says that adopting its plan will help consumers because companies will pass along savings.
The phone industry proposal "provides a framework for comprehensive reform of the existing systems while observing the key principles laid out by FCC Chairman Genachowski and providing significant benefits to consumers," Kathleen Abernathy, chief legal officer at Frontier Communications, said during the hearing.
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