Tuesday, June 12, 2007
Wireless funding cap can hurt rural areas
From the RoundTable blog
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John E. Rooney
Rooney is president and CEO of U.S. Cellular in Chicago.
Without question, wireless is the future of telecommunications in Virginia. Cellphones are no longer luxury items; they are a fundamental necessity. Today, the lack of high-quality wireless coverage in rural areas is a critical public safety issue.
First responders, law enforcement and rural citizens all depend on high-quality coverage to reliably deal with critical safety issues ranging from natural disasters to automotive emergencies to domestic violence. Moreover, E-911 technology will not work properly unless an area has high-quality wireless coverage.
U.S. Cellular has a deep commitment to rural America. The majority of our service areas are sparsely populated and we have built our business on providing service to all customers, not just those in urban centers.
In 1996, Congress created the federal universal service fund, or USF, to provide carriers with an incentive to build wireless networks in sparsely populated rural areas that would otherwise not support investment. In 2007, wireless providers will contribute roughly $2.5 billion -- more than one-third of total funding -- to the $7 billion fund. Since 1999, more than $22 billion in consumer contributions has been paid to rural landline phone companies across the country, while less than $2 billion has gone to rural wireless carriers over that same time.
U.S. Cellular has used USF support to construct tens of millions of dollars of new wireless infrastructure around the country, including in Virginia, to improve service to rural Americans.
Unfortunately, the Federal Communications Commission is considering reducing the already-limited funding for wireless service in rural communities.
Specifically, the FCC is considering a proposal to cap USF to wireless carriers. The FCC may enact this cap within weeks, without fully considering the effect of this decision on rural Americans.
A freeze in funding will only widen the technological gap between urban and rural areas. It will move us in the opposite direction of reform.
The USF has grown as a direct result of the explosive demand for wireless service. Some have criticized various aspects of the program, yet the FCC has taken no action since it first opened a proceeding in 2002 to reform the system.
We support reforms that will provide funding to the carrier that customers prefer. A cap on wireless carriers that are growing in rural America and need funds to build new networks will only impede our ability to offer customers a meaningful choice of service provider.
Those who favor a cap fail to acknowledge the real reason for fund growth: Over the past three years, more than 10 percent of wireline customers have "cut the cord"; yet federal support to landline companies remains steady at $3 billion per year. That excess is largely funded by wireless consumers, who see no benefit from their USF contributions.
To provide the best possible service to rural Americans, wireless carriers need a fair share of universal service funding. To this end, U.S. Cellular is supporting Connecting Rural America, a coalition of public safety officials, business leaders and concerned citizens, in an effort to take a stand for rural America. Visit www.connectingruralamerica.org to make your voice heard.
We need to expand -- not cap -- USF funding for wireless customers. We simply cannot afford to leave rural America behind.
