13 things you should know about the Universal Service Reform Act

New Universal Service legislation introduced this week has the backing of telcos large and small, at least on the landline side. Those endorsing the bill range from AT&T, Verizon, the National Cable and Telecommunications Association and US Telecom on the large carrier side to CenturyLink, Frontier Communications, the National Telecommunications Cooperative Association, OPASTCO and the Independent Telephone and Telecommunications Alliance on the smaller carrier side.

If passed, the legislation would give the Federal Communications Commission the authority required to convert today’s voice-centric Universal Service plan to one focused on broadband. The FCC’s authority to regulate broadband was called into question by the Comcast court decision earlier this year.

The legislation is not, however, a rubber stamp on the reforms the FCC would like to see to the Universal Service high-cost plan, which were outlined in the National Broadband Plan released in March. A draft of the new legislation actually was circulated back in November—several months prior to the National Broadband Plan’s release.

The new legislation was introduced by Jay Rockefeller, who is a Democratic U.S. representative from Virginia and chairman of the Subcommittee on Communications Technology and the Internet and by Lee Terry, a Republican representative from Nebraska.

Here are the 13 most important things to know about the proposed legislation, known as the Universal Service Reform Act of 2010:

1. Transition to broadband
The bill aims to transition today’s voice-centric Universal Service Fund to one focused on broadband and voice. It would require funding recipients to offer broadband throughout areas where they receive USF support within five years.

2. Reselling satellite service would be covered
Providers could meet the requirement to deliver broadband service by reselling satellite service.

3. No specifics on broadband speed
The bill does not define the word “broadband,” instead delegating that responsibility to the FCC, which has favored a definition of 4 Mb/s downstream and 1 Mb/s upstream.

4. Fund growth constrained
The act directs the FCC to ensure that the “contribution burden” on consumers does not “unreasonably” increase.

5. Broadband providers must contribute
Any provider that “offers a network connection to the public (e.g., DSL, cable modem, WiMax and broadband over powerline providers)” would be required to contribute to the fund.

6. FCC charged with developing cost model
The new bill does not detail how USF support would be calculated. Instead it assigns that responsibility to the FCC.

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