Verizon: Stimulus Grants, Subsidy Reform Key to Making Broadband Internet Available to All

Verizon, in Congressional Testimony, Suggests\Guidelines and Practical Reforms

March 12, 2009 -- WASHINGTON - A senior telecommunications executive today made specific recommendations to Congress on how broadband Internet grant money contained in the economic stimulus package and reform of the nation's universal service subsidy system can be used to deploy broadband networks to U.S. households throughout the country.

In testimony before the House Subcommittee on Communications, Technology and the Internet, Tom Tauke, Verizon executive vice president of public affairs, policy and communications, said, "The stimulus funds provide an opportunity to make substantial progress in the universal deployment of broadband services by providing the capital needed to invest in broadband networks in those areas where deployment is not economically viable."

Tauke said the National Telecommunications and Information Administration and the Rural Utilities Services, the federal entities charged with disbursing the more than $7 billion in grants, should rely on state broadband maps and state technology plans, where they exist, for the initial round of grants. He suggested the initial grants be made for projects: (1) that a state believes will extend broadband service to unserved areas; (2) whose applicants have a successful track record of deploying and providing broadband service; and (3) that use technology appropriate for the area served. Subsequent rounds of grants can be pinpointed with new data obtained through national broadband "mapping" activities funded by the stimulus, he said.

Praising efforts by the subcommittee's chairman, Rep. Rick Boucher, D-Va., and other members discussing reform of the universal service system, the Verizon executive said: "The problem is not that we are spending too little money on universal service. The problem is that we are not spending it on the right things. It should be spent to deploy mobile wireless and broadband services to unserved areas."

Signaling his interest in working with the committee to "reform and update the Universal Service Fund to better serve rural America," Tauke suggested six reforms to be included in legislation: (1) cap the size of the high-cost fund; (2) use competitive bidding to award funding to mobile wireless carriers (and require that the winning bidder provide service to an entire area); (3) provide support for "middle mile" transport to help with the cost to deploy broadband to underserved areas; (4) eliminate statewide cost averaging and consider an appropriately designed wire-center approach, as in the chairman's legislation; (5) base USF contributions on phone numbers; and (6) give the Federal Communications Commission a deadline to complete inter-carrier compensation reform.

Tauke said these reforms will "help create a Universal Service Fund that is sustainable, meets the needs of consumers in high-cost areas, and provides carriers with the proper incentives to invest and innovate so that all of our citizens can participate in the broadband world we are building."

Source: Verizon