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State Laws/Franchising

Stevens: Rural Subsidies Key to New Law

3/07/2006 11:13 AM Eastern

Washington -- Providing subsidies for rural telecommunications services -- possibly even broadband access for the first time -- is crucial to passing a new telecommunications law, Senate Commerce Committee chairman Ted Stevens (R-Alaska) said Tuesday at a hearing designed to highlight the importance of high-speed Internet access to thinly populated regions of the country.

“I think this is a key issue for this telecom bill. If we can get an agreement on universal service, we can get a bill,” Stevens said. “But there is still a lot of opposition to universal service per se in the Congress.”

Perhaps Stevens was referring to House Energy and Commerce Committee chairman Joe Barton (R-Texas), who has called for eliminating rural telecommunications subsidies. Stevens and Barton would likely need to reach a compromise for a new telecommunications law to reach the White House this year.

Stevens said he hoped his committee would pass a bill in early April and the full Senate would debate the measure soon after Congress returned from its Easter recess the last week of that month.

Stevens and many other rural lawmakers are concerned that the $7 billion subsidy program called universal service is inadequately funded. Some lawmakers not only want to plug the funding gap, but also to expand the program’s mission to include funding rural broadband access.

“If a community does not have broadband … then they are [at] a huge competitive disadvantage. It is just that simple,” said Sen. Conrad Burns (R-Mont.), whose bill (S. 2256) would requiring universal-service funding of rural broadband access.

The effort to bolster universal service could force cable operators to contribute broadband-access revenue for the first time. Currently, cable kicks in voice-communications revenue.

At the hearing, another cable concern arose: whether the U.S. Department of Agriculture's Rural Utilities Service is providing loans and grants to broadband providers operating in competitive markets.

Claiming that the RUS is funding their competitors, cable companies have said that the federal money was intended to help deliver high-speed access to communities that never had it.

“We have got to find a way to ensure that this program works as intended,” Sen. Trent Lott (R-Miss.) said.