House & Senate Leaders Urge FCC to Use Joint Board on Universal Service to Evaluate E-Rate Expansion Proposals

January 30, 2014

WASHINGTON, DC – Republican leaders of the House Energy and Commerce Committee and the Senate Commerce, Science and Transportation Committee today wrote to Federal Communications Commission Chairman Tom Wheeler regarding proposals to change and expand the current Universal Service Fund’s Schools and Libraries program. Expressing concern at the recently ballooning cost of the program, which is funded by consumers, the leaders urged the chairman to refer any proposed expansion of the program to the Federal-State Joint Board on Universal Service.

In the letter to Chairman Wheeler, the bicameral leaders wrote:

“The Universal Service Fund, administered by the Universal Service Administrative Company with Federal Communications Commission (FCC) oversight, provides support through four mechanisms: High Cost, Low Income, Rural Health Care, and Schools and Libraries.  In the past several months, there have been multiple proposals for reforms to the Schools and Libraries program, also known as E-rate, from members of Congress, the Administration, and the FCC itself.  Many of these proposals could increase the size and cost of the E-rate program, and even the overall Universal Service Fund, which is ultimately paid for by Americans via their telephone bills.  The contribution factor for the overall fund has already jumped from 9.5 percent in the first quarter of 2009 to 16.4 percent in the first quarter of 2014, an increase that is passed along to consumers.  This growth is indicative of the need for a thorough and critical examination of any proposals that have the potential to further increase the bill for American families.

“In these fiscal times, it is more important than ever to ensure that money is spent wisely and that these funds are allocated appropriately and effectively.  This is why we urge you to refer evaluation of any E-rate expansion proposals to the Federal-State Joint Board on Universal Service.  The Joint Board was established in 1996 to make recommendations to implement the universal service provisions of the Telecommunications Act of 1996.  The Board, composed of FCC Commissioners, State Utility Commissioners, and a consumer advocate, is a mechanism to coordinate federal and state policies, and should be used as a tool for the Commission to ensure any changes to the fund achieve the statutory goals in an effective and appropriately tailored way.  The recent Lifeline reform order reflecting the recommendations of the Joint Board demonstrates the contemplated use of the board.”

The letter was signed by House Energy and Commerce Committee Chairman Fred Upton (R-MI), Senate Commerce, Science, and Transportation Committee Ranking Member John Thune (R-SD), House Communications and Technology Subcommittee Chairman Greg Walden (R-OR), and Senate Communications, Technology, and the Internet Subcommittee Ranking Member Roger Wicker (R-MS).

To read a copy of the letter, click here.

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