FCC takes up USF phone line subsidies

The chairman of the Federal Communications Commission will announce a plan Thursday to shift subsidies away from phone lines to broadband Internet services. The proposal would reform portions of the much-criticized $8 billion Universal Service Fund program.

The four-member commission aims to vote on the proposal by Chairman Julius Genachowski on Oct. 27, an FCC official said during a briefing on Tuesday.

Details of Genachowski’s plan to reform the $4.5 billion high-cost portion of the USF weren’t revealed during the briefing. The chairman also plans to announce reforms to intercarrier compensation — the fees a telecom firm charges other communications companies to carry and terminate calls.

Those details are what people are waiting for. Telecom companies have lobbied for reforms that critics say would free them from obligations to provide phone service during emergencies. Cable competitors complain that the plan presented by telecom carriers would give phone giants such as Verizon and AT&T first dibs on projects.

Critics say Genachowski should not rely too much on any one group of companies to shape his plan. He has asked for feedback on how to reform USF and intercarrier compensation and will surely come under fierce attack from the cable industry and consumer groups if he adopts the telecom industry’s view, experts say.

In a letter sent Tuesday to Genachowski, consumer advocacy groups asked that the proposal not resemble the plan presented by telecom carriers.

The statement was signed by the Consumers Union, Consumer Federation of America, National Consumer Law Center, National Association of State Utility Consumer Advocates and AARP.

“While we recognize that USF reform is truly needed, we cannot accept the premise of the ABC Plan – that consumers, especially the most vulnerable, should bear the burden of increased costs while allowing the companies to maintain excessive profits with no oversight or accountability. Thus, rather than endorsing or pursuing the ABC Plan, the Commission should move forward on a plan that promotes the public interest and provides for affordable universal service.”

The reform of the of federal phone subsidy has been long in the making, with failed attempts by previous FCC chairs, including Kevin Martin.

Related:

Reforms called for USF fund

Pres Obama pitches $18 billion wireless Internet plan

Verizon sues FCC over net neutrality rules

Cecilia Kang is a senior technology correspondent for The Washington Post.

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