Lawmakers want broadband requirements on phone fund

The U.S. Congress should require telecommunications carriers receiving subsidies from a huge government fund intended to deliver telephone service to rural areas to also provide broadband service, two U.S. lawmakers said Thursday.

The $4.9 billion high-cost program in the Universal Service Fund (USF), intended to subsidize telephone service to rural and other hard-to-reach areas, should cover broadband service and needs to expand the services taxed to pay for the fund, said Representative Rick Boucher, a Virginia Democrat and chairman of the House Energy and Commerce Committee's Subcommittee on Communications, Technology, and the Internet.

[ Related: "Obama includes broadband, smart grid in stimulus package" and "Does the U.S. need a new broadband policy?" | Your source for the latest in government IT news and issues: Subscribe to InfoWorld's Government IT newsletter. ]

Boucher and Representative Lee Terry, a Nebraska Republican, pushed unsuccessfully for USF reform legislation in the last Congress, and the two said they again will work for it this year. A proposal they've authored would require USF recipients to offer broadband service to all customers and would also cap the high-cost fund.

"Broadband is to communities today what electricity and basic telephone service were 100 years ago," Boucher said at a subcommittee hearing. "It is the new essential infrastructure for the commercial success of all communities."

Witnesses at the hearing from the telecom industry said broadband should be eligible for USF money, even though a huge economic stimulus packaged, passed by Congress in mid-February, includes $7.2 billion for broadband deployment grants and loans. It would cost Qwest Communications International, which provides voice and broadband services in 14 western states, about $3 billion to expand broadband from the current 86 percent of customers to 95 percent of customers, said Steve Davis, Qwest's senior vice president for public policy and government relations.

"In the absence of additional government assistance, the necessary upgrades to expand our footprint are not economically feasible in many rural areas," Davis said. "The grants for broadband deployment established in the stimulus [bill] are a start. They're not sufficient to result in ubiquitous deployment of high-speed broadband."

While many witnesses supported adding broadband as an optional service funded by USF, some questioned whether Congress should require carriers receiving USF money to provide broadband, saying in some rural areas, the cost of providing broadband may exceed any USF benefits.

It would take Embarq, a carrier based in Overland Park, Kan., about $2 billion to provide broadband to all its customers, said Tom Gerke, the company's CEO. "What we're going to get from stimulus, depending on how that works ... and what we can continue under USF would not come close to fulfilling that," he said.