Universal Service - Full Brief
Most cable companies have launched Voice over Internet Protocol (VoIP) phone service, or digital phone service, providing consumers a true alternative to facilities-based, standard telephone service. More than 20 million homes are now subscribing to cable’s digital phone service – a number that continues to grow steadily.
As a contributor to the federal universal service fund (USF), the cable industry shares the goal of many policymakers in transitioning the fund to a more modern, neutral, and forward-looking mechanism when it comes to voice services and, in a tailored fashion, to broadband. A fund like this would promote efficiency and competitive markets by targeting areas of the country where support is required to make telecommunications services more readily available.
USF reform should be a critical component of our national broadband strategy. Bringing broadband to unserved areas and promoting adoption of services by underserved segments of the population will require additional financial support from the government. Federal USF programs can be a critical component of the strategy for achieving universal access to broadband.
To achieve this goal, the USF should be capped and reallocated to better support areas without broadband. The USF program should adopt a cap on the size of the high-cost fund in order to constrain this rampant growth. In addition, support to areas where it no longer is needed should be reduced.
In addition, the universal service contribution mechanism is out of date. The current mechanism is based on interstate telecommunications revenues. In today’s marketplace, where local and long distance services are often bundled or combined with other services like broadband and video, that’s just not sustainable. The cable industry has long advocated a mechanism that would equitably collect universal service contributions for voice services by basing costs on assigned telephone numbers. A numbers-based contribution scheme could provide a more stable, predictable and nondiscriminatory funding mechanism that would affect everyone equitably, regardless of the service.