TPA Submits Comment to House Energy and Commerce Committee on the Universal Service Fund

House Energy and Commerce Committee 

The House Energy and Commerce Committee has been working on trying to update the Communications Act and the Taxpayers Protection Alliance (TPA) has been very vocal on recommendations for how best to proceed. Last month the committee released a white paper on the Universal Service Fund (USF), soliciting more input from the public. USF is a tool used to help pay for certain programs implemented under the direction of the Federal Communications Commission (FCC); which are the Connect America Fund, Lifeline (for low-income consumers), Schools and Libraries, and Rural Health Care. TPA submitted a comment this morning to the committee summarizing the view that it is time to fully re-evaluate the USF as a necessary tool of the Telecommunications Act.

Here’s the full comment TPA submitted:

September 19, 2014

Comment on the Communications Act update and the Universal Service Fund

Distinguished members of the House Energy & Commerce Committee:

Listed below is a comment for submission from the Taxpayers Protection Alliance regarding the Universal Service Fund:

We thank House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Communications and Technology Subcommittee Chairman Greg Walden (R-Ore.) for providing the opportunity for the Taxpayers Protection Alliance (TPA) to comment on how controlling the costs of the USF will be in the best interest of taxpayers, consumers and businesses. TPA believes that the Universal Service Fund (USF) is an outdated and costly feature of the Telecommunications Act that puts a significant and unnecessary burden on American consumers and taxpayers.

Fifteen years after its creation, it is time to fully re-evaluate the USF as a necessary tool of the Telecommunications Act. Studies over the past decade have seen large-scale waste and inefficiencies within the well-meaning program in excess of tens of billions of dollars.  Most American taxpayers are unaware of the scale of this waste.  If they did, they would demand these costs be brought under control and would be a required part of updating the Communications Act.  Reform of the Universal Service Fund is not only a welcome procedure, but a necessary step in reigning in the out of control costs of the fund. As such, TPA would like to see the fund eliminated altogether, as it has truly outgrown its usefulness. But, in the absence of elimination; the goal must be to reduce costs to the consumer and institute much-needed oversight.

While for many, it is a positive step that the House Energy and Commerce Committee is even considering changes to the USF that would have it evolve from telephony to broadband.  If that change merely expands the aging program, it could impose even higher costs on consumers. The cost of the USF has doubled from $4 billion to $8 billion over the last decade, and is set to double again in the coming years if nothing is done to cap or reform it. We welcome that this comment period gives many the opportunity to call to attention the grave injustice this is to consumers.

It follows that the way in which the House chooses to modernize the USF will have a profound effect on rural Americans. By only refocusing this program for the modern technology of broadband will not promote innovation or efficiency but rather, it will perpetuate an aging entitlement and increase costs to consumers and taxpayers. Any reform of the USF should effectively reduce the current high costs to consumers and, at a minimum, must cap the fund. Specifically, we must bring the USF’s “High Cost Fund,” under control in order to reduce unnecessary fees on monthly service bills that have no place in the modern communications marketplace. These universal service “fees” are mechanisms that place an enhanced burden on the average American family. Any reform of the USF that ultimately does not bring the “High Cost Fund” under control will be a complete failure.

As technology has become more and more advanced in recent years, it is necessary that the Universal Service Fund is modernized in a way that best suits American consumers and taxpayers, without placing additional burdens on the average citizen.

As lawmakers, when considering the overhaul of the Communications Act, you must take action in the best interest all constituents and see the need to rid the USF of wasteful funding mechanisms. The time for responsible and reasoned action is now.

Regards,

David Williams
President
Taxpayers Protection Alliance