FCC puts off decision to reform universal service

U.S. Federal Communications Commission Chairman Kevin Martin has postponed votes scheduled for Tuesday that would have overhauled intercarrier compensation and rural telephone subsidies under the Universal Service Fund (USF).

Martin's decision comes after dozens of U.S. lawmakers, as well as trade groups and state public service commissioners, called on the FCC to put proposals pushed by Martin out for public comment before commissioners voted on them.

Martin pushed for a vote to reform the Universal Service Fund, which subsidizes telephone service to rural and other underserved areas of the U.S., as well as restructure intercarrier compensation, the complicated way that telephone carriers pay for using each others' networks. However, the details of the Martin proposals have not been released to the public, and several groups have complained that Martin was trying to push through major changes without significant public debate.

The four other members of the FCC said in a joint statement Monday that they were disappointed that Martin withdrew the USF and intercarrier compensation proposals.

The four other commissioners provided "bipartisan, constructive and substantive suggestions" and asked that Martin seek public comment after Tuesday's meeting, the statement said. They pushed for the FCC to make a final decision on the changes on Dec. 18.

"We approached this proceeding with the common goal of modernizing our universal service and intercarrier compensation policies, and commend the desire to tackle some of the most important issues facing this commission," the statement added. "It is equally important to ensure that any reform proposal receive the full benefit of public notice and comment -- especially in light of the difficult economic circumstances currently facing our nation."

The four commissioners said they hoped the FCC would continue to pursue USF and intercarrier compensation reform.

The USF's 2009 budget is US$6.7 billion, not counting the $4.2 billion E-Rate program, which helps schools and libraries in poor areas connect to the Internet. The U.S. government raises the funds through a tax on telephone service, and some mobile carriers collect the tax as well.

A host of groups has called for USF reform in recent years, with some critics saying the program's focus on traditional telephone service doesn't address needs for broadband and mobile-phone service in rural areas. The Telecommunications Act of 1996 expanded the USF program, but there have been few changes since then.

Several people, including Democratic presidential candidate Barack Obama and FCC member Michael Copps, have called on the USF to shift its focus toward subsidizing broadband instead of traditional phone service.

The IDG News Service is a Network World affiliate.