capitol dome

Congress should act to directly fund the Universal Service Fund program, said Jeff McElfresh, CEO of AT&T Communications, at an industry event today. Modernizing USF was one of four AT&T broadband policy recommendations that McElfresh outlined.

McElfresh made his comments at the USTelecom Broadband Investment Forum, an online event. Also participating in the forum was Frank Pallone, chairman of the House Energy and Commerce Committee (D-NJ), who outlined current legislative broadband initiatives, including one which, if passed, would include funding to gather more accurate broadband availability data. The accuracy of broadband availability data has been an ongoing problem at the FCC.

AT&T Broadband Policy

USF funding goes toward four separate programs, including the Lifeline low-income program, the high-cost rural broadband infrastructure program, the schools and libraries program and the rural telehealth program. The USF program is currently funded as a percentage of service providers’ voice revenues and is collected as a fee on voice customers’ bills – and as McElfresh noted, that’s an antiquated system at a time when funding increasingly is directed toward broadband.

McElfresh noted that the contribution factor – the percentage of voice revenues that goes toward USF—is on track to exceed 30% for the first time.

“Congress needs to change the funding mechanism,” McElfresh said.

The answer, he said, is direct funding from Congress that would spread USF costs across the U.S. taxpayer base.

The other AT&T broadband policy recommendations that McElfresh outlined were:

  1. Retain a light touch regulatory approach. Although McElfresh didn’t provide details here, this would appear to be a reference to Net Neutrality and Open Internet issues, including whether broadband should be classified as a Title II telecommunications service, which would leave the service open to heavier regulation. The FCC has flip-flopped on this issue but as of now has largely overturned previous Net Neutrality rules designed to prevent paid traffic prioritization and related practices. According to McElfresh, the status quo has encouraged service providers to invest in their networks. He noted, for example, that AT&T expects to double the number of fiber locations that it serves within the next five years.
  2. Be technology-neutral. McElfresh noted that there are some areas in the U.S. where there is no business case to deploy broadband and where government support is needed to fund buildouts. As the government awards “up to $80 billion” for broadband, it should “let engineers decide how to expand broadband into rural America” and should not “get prescriptive about technology.”
    He argued, for example, that fixed wireless broadband offers a means of using tax dollars wisely for rural broadband.
  3. Obtain accurate broadband availability data. It’s widely recognized that government broadband availability data is flawed because it considers an entire census block to have service available to it, even if only a single location in the block can get service. Congress passed the Broadband Data Act to address this but has not voted to provide funding to implement the act.

“We need precise maps . . . down to individual buildings,” McElfresh said.

According to Pallone, Congress is getting close to addressing one of the items on the AT&T broadband policy list – the broadband data funding problem. He noted in his comments at the USTelecom online event that funding for the data collection initiative is included in an omnibus funding bill that he hopes will be adopted next week.

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