WASHINGTON – U.S. Rep. Joe Barton, R-Texas, ranking member of the House Energy and Commerce Committee, and U.S. Rep. Cliff Stearns, R-Fla., ranking member of the Telecommunications and the Internet Subcommittee, today introduced a bill designed to reform the Universal Service Fund to focus on those areas and households that most need the help. The bill does so by relying on competitive mechanisms in today’s changed communications marketplace to target universal service support only to those carriers that are most efficient in providing quality service.

The Universal Service Fund was originally designed to make sure everyone in the country has access to phone service, and it succeeded. Everyone has telephone service, and we have more competition and better technology than ever before. Yet the fund keeps growing, costing Americans $51 billion over the past 10 years.

“The Barton-Stearns bill will clarify the program’s goals, refocus its priority on consumers, incorporate market-based mechanisms, and require greater accountability,” Barton said. “There is a real and pressing need to reform the universal service program, particularly the subsidies that support service to high-cost areas. As the price-tag on universal service continues to rise, we need to ensure that the goals of the program are clear, appropriate, and actually achieved. And they should be designed in a way that is consistent with the current competitive marketplace.”

“The Universal Service program needs to be reformed.  The entire country has access to phone service and we have more competition and better technology than ever before. Yet the Universal Service Fund continues to grow out of control,” Stearns said. “Universal Service fees now represent 11 percent of the consumer’s monthly bill, double from 10 years ago. Consumers are paying more and getting less. The system is fraught with waste, fraud and abuse – a major overhaul is necessary.”

Under the bill, subsidies will focus on making voice service affordable for low-income households and households in high-cost areas, rather than creating similar prices everywhere regardless of cost and even in wealthy parts of the country. The goal will be the availability of voice communications service to consumers in high-cost areas, rather than the financial well-being of voice communications companies.

The bill also:

• Places a permanent cap on the entire fund upon enactment.
• Does not tax broadband services to support this program.
• Requires the FCC to identify high-cost areas and create rules for reverse auctions to subsidize one provider in each such area, which will be obligated to provide quality voice service to anyone who requests it.
• Requires the FCC to end USF subsidies to areas where, even in absence of a subsidized carrier, consumers would still have access to affordable voice communications service by one or more carriers.
• Does not allow the USF fund to subsidize high-income areas.
  Requires the FCC to reconstitute the Universal Service Administration Company Board of Directors with professional public administrators and ensure that these administrators have no personal interest in or current association with any organizations or companies that might have an interest in USF subsidies. 
• Requires all recipients of USF monies to file an annual report on how the funds were spent during the year. 
• Requires the FCC to permanently bar those who commit fraud from participating in the USF program in the future. It must also develop increased penalties for wrongdoing associated with the USF fund.  

A copy of the bill can be found here.