Coalition To Keep America Connected.

Washington, D.C., March 2, 2006 -- Coalition to Keep America Connected Representative and National Telecommunications Cooperative Association Vice President of Government Affairs and Association Services Shirley Bloomfield today testified before the United States Senate Committee on Commerce, Science and Transportation at its "Universal Service Distributions" hearing. How universal service funds are distributed is crucial to the coalition's mission to ensure all consumers have access to affordable telecommunications services-no matter where they live.

In her testimony, Bloomfield urged the Senate to adopt four main principles for any Universal Service Fund distribution reforms:

Support must be used to construct, maintain and upgrade networks to benefit all consumers and must not be voucher, auction or block grant-based.
Universal service support is for the deployment, maintenance and upgrading of communications networks. Any distribution method chosen must recognize that communications providers do not build networks one connection at a time. Networks require substantial financial investment and are built to be scaleable and expandable to meet future consumer demands for new technologies and services. Regulations, such as vouchers, auctions and block grants, which force carriers to build and maintain networks one connection at a time ignore real-world economics and create vast inefficiencies and increase costs to all consumers. Coalition to Keep America Connected USF Distribution Testimony/2-2-2
Support must be based on a provider's actual cost of service.
Requiring all universal service fund recipients to receive support based on their own costs will increase program accountability as well as reduce demands for funds. Currently a competitive carrier entering an ILEC territory receives support based on the incumbent's cost. Requiring each universal service recipient to document its costs will greatly improve program accountability and ensure that funds are being used for their intended purpose.
Support must not be used to artificially incite competition.
Many rural areas in our nation can't support more than one gas station, grocery store or other commodity service, so it is unlikely that the same area can support multiple communications providers. While rural carriers welcome competition in areas that can support it, universal service should not be used to artificially incite competition in areas it would otherwise not occur. Tightening of the eligible telecommunications carrier (ETC) requirements will help ensure that universal service monies support the intended goal of guaranteeing all Americans, everywhere, have access to comparable services at comparable rates.
The rural and non-rural fund distinctions must be maintained.
Separate funds allow the FCC to specifically tailor rural high-cost support mechanisms to fit the conditions of rural local exchange carriers serving high-cost areas in rural America. Many rural carriers lack population density, serve smaller exchanges, and lack the economies of scale of larger urban-centric carriers.

Click here for a copy of Bloomfields full testimony. (PDF 247 KB)

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The Coalition to Keep America Connected is dedicated to ensuring that all consumers have access to affordable telecommunications services and the latest technologies-no matter where they live. The effort is organized by four rural telecom associations, whose memberships include 700 small and midsize communications companies. Together these companies serve millions of consumers and 40% of the landmass across America. Visit us at www.keepamericaconnected.org.