WASHINGTON – Everyone wants better phone and Internet service for rural Americans,but who will pay for it remains unresolved after a House committee hearing Thursday.
The Committee on Energy and Commerce held a hearing on the Universal Service Reform Act,a bill that would expand the 1996 Telecommunications Act to help bring broadband Internet access to rural areas.
The bill would affect approximately 5 percent of Americans,said Walter McCormick,president and CEO of the United States Telecom Association. It will encompass phone service as well as broadband.
Several organizations and private companies expressed support for the bill,including the National Cable and Telecommunications Association,the National Telecommunications Cooperative Association,Qwest Corp.,Verizon and U.S. Telecom. The Federal Communications Commission has not yet taken a position on the bill.
New price structures and what they will mean for consumers were specifically discussed in the hearing.
Rep. Lee Terry,R-Neb.,a cosponsor of the bill,said he was frustrated by criticism from companies about how to structure pricing.
“We started with a price cap,and that was criticized,” Terry said. “We've moved to a cost-containment model and that is also being criticized.”
Broadband companies that expand to new geographic areas face the expense of installing hardware to make service available. Witnesses said that if the government sets a price cap for service rural broadband investment would stop.
Two members of the committee,Rep. Cliff Stearns,R-Fla.,and Rep. Edward J. Markey,D-Mass.,asked Carol Mattey,deputy chief of the FCC's Wireline Competition Bureau,what the cost implications would be for consumers. Mattey declined to answer the question each time,saying the FCC would follow Congress's guidelines for setting prices.
Under the bill,the FCC would be responsible for governing prices,and there could not be more than a “reasonable burden” on consumers,but it does not define how much that should be.
Asked a second time by Stearns what increased costs,if any,there would be to consumers,Mattey again deferred to Congress.
One aspect of increased cost is how phone service would be billed. One of the proposals outlined a per-phone number charge,meaning there would be a fee for every phone number issued to each person or business.
Rep. Mike Doyle,D-Pa.,said this per-phone number charge will affect both large organizations and small businesses with many telephone lines. Service providers such as Amazon would be affected because it uses a phone number system to allow consumers to load content onto their Kindles,an electronic book reading device.
The bill gives the FCC discretion to allow exemptions to businesses for the per-phone number charge,but Mattey declined to say how the FCC would handle these requests.