AUGUSTA, Maine — For years, rural telephone service has been subsidized by the Universal Service Fund that Congress set up to make sure phone service is available in rural areas. Both Congress and the Federal Communications Commission, which administers the fund, are considering an expanded role for the fund, to help ensure broadband access.
“It is a question we are wrestling with in the Commerce Committee,” said Sen. Olympia Snowe, R-Maine, in an interview. “I have been a big advocate of making sure rural communities have access to broadband. What we are wrestling with is how best to do that.”
For example, she said, the USF is funded by a fee on telephone bills. But the Digital Subscriber Line, or DSL, broadband service offered by traditional land-line telephone companies has limits on its speed and gets expensive in rural areas that are at a great distance from phone company switching facilities.
“We have to be looking at all the alternatives like wireless and cable and how will they contribute to the fund and how the fund will subsidize service in rural areas,” Snowe said.
She added that many oppose creating a larger fund and want any fees levied on new subsidy recipients, such as wireless providers, be offset by decreases in the fees on land-line companies.
“I think we should keep the fund at about where it is — $8.7 billion [a year] — but we need to look at expanding the base of who pays into the fund,” she said. “Broadband access is crucial for economic development and is going to become even more so in the future.”
Harold Daniel, a marketing professor at the University of Maine, said broadband is as important to businesses large and small as the telephone and the roads to get in and out of the state. He said tourism is a major part of Maine’s economy but many tourists are finding they cannot find the sort of information online about Maine destinations as they can from other states.
“People are using their iPhones and other smart phones when they go on vacation because they have become used to finding the information they want or need on their phone,” he said. “There are places in Maine where those smart phones will not work. We are losing some business because of that.”
Daniel said tourists are not the only ones who expect to use their smart phones when they visit the state. He said business visitors too frequently are caught in areas where not only do smart phone data functions not work, but they also cannot get any cellular signal at all.
Rep. Mike Michaud, D-Maine, who represents the 2nd Congressional District, the geographically largest district east of the Mississippi River, said he has experienced dropped calls and no-service signals while traveling throughout the state.
“There is no doubt in my mind that we need to look at ways to expand broadband access to all parts of Maine and to the country,” he said. “It’s crucial to attracting new businesses to the state.”
Michaud said small telephone companies in the state now serving rural areas and getting subsidies from the USF are worried they will lose part of their subsidies if the fund stays the same size.
“I think we have to take a look at that concern,” he said. “They are providing phone service in some very rural parts of our state, and we need to make sure that continues.”
Snowe said there are discussions in the House, Senate and the FCC over the issue. She has no doubt there need to be changes to the USF to reflect new technologies and the fundamental need of business to have broadband access to compete in a global marketplace.
“I am not sure about the proposal by the FCC to do this by declaring broadband to be telecommunications and subject to their rules,” she said. “I think Congress needs to act on this and define the policy in law.”
Snowe said the FCC acting on its own could lead to lengthy litigation from some companies opposed to oversight by the FCC. She said the policy of making sure everyone has broadband access is as fundamental as the 1934 law that created the FCC.