Walden Proposes Cap on Universal Service Fund; Consultation with State USF Experts on Expansion Proposals

July 15, 2013

WASHINGTON, DC – Communications and Technology Subcommittee Chairman Greg Walden (R-OR) on Friday sent the following letter to Federal Communications Commission (FCC) Acting Chairwoman Mignon Clyburn regarding the Universal Service Fund (USF) and proposals to expand the program. The USF, funded by a charge on consumers’ phone bills, is currently uncapped, leaving it vulnerable to endless expansion at the expense of ratepayers. In light of the current economic environment, Walden suggested that instead of expanding the program with a blank check, Acting Chairwoman Clyburn should cap the fund and if expansion is deemed necessary, work with the Federal-State Joint Board on Universal Service to find ways to do so under the funding cap.

The full text of Walden’s letter is below:

July 12, 2013

Dear Acting Chairwoman Clyburn:

Even in boom times—let alone periods of fiscal constraint—American families must live within their means. They must prioritize their needs and wants and allocate their resources accordingly. I see no reason why the government should operate its affairs any differently.

I therefore ask that you tread carefully before you consider expanding initiatives within the Universal Service program. The FCC should continue its efforts to curb waste and abuse and cap the overall fund at current levels. It should then issue a referral to the Federal-State Joint Board on whether to adopt expansion proposals and, if so, how to implement them within the cap.

In recent weeks, members of Congress, the Administration, and the FCC itself have floated various suggestions that could increase the scope and cost of the Universal Service Fund. Those costs are ultimately born by American families in the phone rates they pay. Between first quarter 2009 and third quarter 2013, the Universal Service fee that subscribers pay has already jumped from 9.5 percent of the federal portion of the bill to 15.1 percent. Capping the fund will provide families some certainty and minimize fluctuation in their monthly bills.

I have been somewhat relieved that advocates of the proposals suggest they will pay for them with “savings” from elsewhere in the fund. But savings are in the eye of the beholder and depend upon the baseline against which they are measured. Are we talking about reducing spending from current levels or just rechanneling today’s runaway growth in another direction?

The best way to ensure saving are in fact savings and that the burden on citizens’ pocketbooks does not grow is to consider whether to fund new initiatives only after setting a firm cap. This may be challenging but responsible government spending always is. That is why I also urge you to refer evaluation of the expansion proposals to the Joint Board after you set the cap. As a former state regulator yourself and a past federal chair of the Joint Board, you of course understand the reasons for creation of the Board and the value it brings.

With Kind Regards,
Greg Walden

To view a copy of the signed letter, click here.

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