Federal Communications Commission

Universal Service Reform Act of 2010

September 17th, 2010 by Mark Wigfield - Spokesman, Omnibus Broadband Initiative.

Wireline Competition Bureau Deputy Chief Carol Mattey testified before the House Energy and Commerce Committee’s Subcommittee on Communications, Technology and the Internet Thursday regarding H.R. 5828, the Universal Service Reform Act of 2010.  Here are her written remarks.

Chairman Boucher, Ranking Member Stearns, Members of the Subcommittee, thank you for the opportunity to testify today about the important subject of universal service and H.R. 5828, the Universal Service Reform Act of 2010.

Following the introduction of H.R. 5828, Representative Terry stated that the bill’s goal is to ensure “everyone in America is connected into the 21st century telecommunications world.”  That objective is broadly shared by the FCC as we undertake the process of considering the recommendations included in the National Broadband Plan submitted to Congress in March.

The National Broadband Plan recognized the important role that the private sector has played and must continue to play in investing in broadband facilities as well as promoting investment and innovation in broadband technologies and services.  But, as Chairman Boucher and Representative Terry noted when introducing H.R. 5828, some Americans live in areas for which there simply is not an economic case for any provider to build, upgrade and maintain vital communications infrastructure.  That is why we have what is known as the high cost program in the Universal Service Fund.

Universal service historically has been a significant success story in the United States.  In addition to incenting the private sector to bring affordable voice service to virtually all reaches of the country, the existing high cost program has played an important role in strengthening communities and our economy by supporting modern networks capable of delivering broadband as well as voice services to millions of rural Americans who would not otherwise have such access.  For example, the National Exchange Carriers’ Association reported that a sampling of small telephone companies made approximately $5 billion of gross investments, mostly to modernize their networks, between 2006 and 2009.

But, as I’m sure many of your constituents tell you, the current system, which wasn’t designed to explicitly support broadband, is not working for everyone.

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7 Responses to “Universal Service Reform Act of 2010”

  1. Glenn Scott says:

    This law holds great promise especially for the opening section:

    ‘(3) ACCESS IN RURAL, INSULAR, OR HIGH COST AREAS- Consumers in all regions of the Nation, including low-income consumers and those in rural, insular, or high cost areas, should have access to the services the Commission determines to be universal services in accordance with subsection (c), including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

    The "reasonably comparable to rates charged for similar services in urban areas." is key. What is killing Rural broadband is the Carriers inability to allow a price structure that makes feasible a business case for providing services to rural areas. Here in Texas our incumbent provider charges up to 10x to 15x more for service in Rural East Texas then to Urban Austin or Dallas Ft. Worth. This price differentiation is hard to contemplate in any "reasonably comparable" justification: However this difference makes or breaks a small business case for service when the bill for a a Small ISP or WISP bill could be $12k a year in an Urban environment to $60k price in an Rural area. Even small cities and counties can't get the Incumbent providers to budge on providing higher speeds or bandwidth even when offering them incentives to provide the build out.

    This type of motivation would be welcome here in Rural East Texas and hopefully encourage more competition to exist and more small providers to finish the LAST Mile infrastructure so desperately needed and wanted throughout the country.

    The secondary broadband killer is the Incumbent provider's near snails pace to expand broadband service beyond currently served areas. So far I've been in Marshall for 4 years I had 3Mb service for $20 a month with the Incumbent when I was 3 miles from downtown. I moved 6 miles from downtown and had No service option with the local Telco. Nine months after my move they advertised 768k service to my new home, I kept our Cable provider who fortunately does provide 5Mb but at $50 a month down where I am and tested with the Telco, I got 56k down needless to say I canceled and haven't bothered looking to them as the prospect of ever getting their U-Verse Fiber to the neighborhood is about Zilch here.

    Looking forward to the Speedy adoption of such a transformation of the Universal Service Fund.

  2. Guest says:

    The really frustrating part of this is the fact that the broadband companies just don't care about connecting unserved customers unless it's going to throw millions of dollars into their bank accounts. Case in point, where we live......I tried to get DSL through AT&T and was told I was way too far north from the main office. Funny, because there's a housing edition a mile and a half further north of me that they DO serve with DSL. The sad part is that coverage area comes within a quarter mile of me....and stops. My neighbor a quarter mile north gets high speed DSL. Me? 21 kb/s dialup. Cable is run along a main highway one mile west of me. We were told the only way they'd run cable to us is if we paid for everything; wire, the equipment, worker's wages, everything. Uh, that's a little bit out of my economic reach. So no cable. AT&T's latest suggestion was to "move to where there IS broadband." Yeah, I'm supposed to sell two houses and 28 acres of land that are PAID FOR, just to be able to get broadband? HA! How stupid do they think people are? What kind of a suggestion is that? Puh-lease! They just jump all around us where there are more houses and everyone in between is outta luck because it doesn't plump up their bank account enough.

  3. Nina says:

    My family is in one of the underserved areas which has no access to broadband service and no real hopes of getting service anytime soon. Our phone company does not have fiber optics in the area and would have to lay more than 5 miles of fiber optic, which they say is not cost effective. Despite the fact that we were able to gather names within a 24 hour periodon a petition of some 40 people who requested service, we still have no hope of broadband. Ours is a rural area but we have children who need broadband service for school work. Our daughter recently got her masters degree online but had to go into town and borrow service to download the files necessary for the classes. Our neighbors expressed similar concerns that our children need to join the 21st century. My husband ranches and needs access to faster internet and I have attempted to open a homebased jewelry/boutique business but lack of broadband has hindered our endeavors. We currently pay over $60 a month for satellite internet access; although better than dial-up speeds are slow and exceeding their fair access policy is always a deterrent. We, the people in rural unserved areas, would certainly appreciate and applaud anything you could do to expediate access to broadband. Thanks for your consideration.

  4. Guest says:

    In our area (Oklahoma, Garfield County), the "coverage map", last I checked it a couple months ago, showed 96% of the people here have broadband. To me, that is extremely deceptive, because in our county there is one decent-sized city, Enid (pop. around 47,000 or so). If you live inside city limits, yes, you get broadband. However, unless you live in a large housing edition or a small town where there are at least 200 or so houses, you don't get broadband in that county. So that 96% is mostly made up of those inside the city limits of Enid, OK. Do you know how many other houses in that county are then considered "rural" to the broadband companies and are denied service? A lot. So, looking at the map, people reviewing this area are going to say "Oh, almost EVERYONE has broadband there! GREAT!!", when in reality it's only if you live in that one city and are not considered "rural" by living even a mile outside city limits.

  5. Guest says:

    I live three tenths of a mile beyond the end of the cable company's reach and was told by the head of the crew that brought the cable that far that they were as far as they could go from their hub. I'm also too far from a phone company hub to get DSL service.

    Since, according to the FCC map Volusia county has access to broadband service in 99 percent of it's homes I don't see much hope for my situation to improve in the near future. There are very few homes on the other side of my place before you reach undeveloped public land.

  6. Guest says:

    Some of us get broadband at work but only dial up service at home. I read that improvements will be made to those who already have much higher speeds. WOW are they lucky!!! So in conclusion: I still have dial up service and there is no date in site for that to change. My best choice is to move where there is broadband but who wants to buy a house with dial up????

  7. Guest says:

    Back when I was paying Verizon for the landline it was one monthly price but it was $70 after the taxes in California. Also the reason why I think most Phone companies leave people with Dial-up is because in a way it goes further distance then DSL or cable internet, but what bites people in there pocket for the ones that have Dial-up is the Toll Charges and in rural area the local ones are sry to say crappy. When I was on Dial-up there was no local number I had to dial to another City.

    There are spots were I am that 3G does not cover and that using the old over the air tv stations for broadbands.

    however I will say that in my rural area there is UHF channel relays which is nice overall because all I can get of the DTV is 7 channels from KCET and 2 of them don't work and 1 spanish 3 english then another station that does advertisements in english then there main programing is Japinese.

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