Incumbents back number-based USF funding

An unusual set of incumbent bedfellows, including the lobbying organizations for the telephone, wireless and cable industries, has come together to back a plan to adopt a numbers-based system for collecting Universal Service Fund money.

The USF By The Numbers Coalition includes AT&T, BellSouth, CTIA, IDT, GCI, NCTA, USTelecom and Verizon.

Universal Service Funds today are based on long-distance revenues, which are declining as flat-rate plans, bundled minutes of wireless use, Internet telephony and email reduce consumer dependence on per-minute calling plans. While there is general agreement that a new funding formula needs to be found, there is still much debate as to what that plan should look like. The new coalition backs the concept of collecting USF fees based on working telephone numbers.

The coalition’s purpose is not to back any one of the many plans now before the Federal Communications Commission, but to “raise the visibility of the need for a numbers-based plan,” said John Windhausen, coordinator of the USF By The Numbers Coalition.

Furthermore, he said, the group is “in synch with [FCC] Chairman [Kevin] Martin and would like to see him move forward with the numbers-based plan that he has talked about.”

Incumbents are pushing for a numbers-based plan largely because they believe it levels the playing field and keeps newcomers, such as Voice over IP providers, from avoiding financial support for USF as they launch service. The FCC has already announced its intention to impose USF fees on VoIP. The question remains how that will be done.

“There is more than one plan being proposed at the FCC,” Windhausen said. “Some of them includes further details on how to handle special access. The CTIA would like to see a discount on family share plans. We’re not endorsing any one plan over any other.”

Opponents of the per-number approach say it unfairly taxes those who have working phone numbers but rarely use long-distance services, including the elderly and the poor.

Windhausen said that thinking “seriously distorts the issue” since those individuals are already paying USF fees.”

“Under a numbers-based plan, most consumers would wind up paying less,” he said. “This just makes sure that everyone who provides voice service pays into the USF.”