A New Role for an Aging Star: Universal Service in the Age of Competition and Technological Change

The United States spends $7 billion a year to subsidize telephone companies.  This program, known as Universal Service, is designed to guarantee affordable telephone service to rural and low-income Americans, to reduce Internet connection costs for schools and libraries, and to enhance connectivity for rural health care providers.  Consumers each month pay a roughly 10% fee on their phone bills to support this program.  What is the future of Universal Service, given the end of monopoly telephone service, the spread of low-cost high-speed Internet connections, and the explosion in alternatives for voice service including wireless and VoIP?  Is this program simply an antiquated relic from a monopoly era?  In this era of innovation and competition, should the system be reformed to empower consumers, rather than subsidize companies?  Can the size of the fund be reduced?  Can these funds be more productively deployed?  Should the fund continue to subsidize multiple carriers within the same area?  Should wireless companies be subsidized at the same level as wireline companies?  And, should the fund be used to subsidize broadband services?

The Federalist Society presented this program on the future of Universal Service.  FCC Commissioner Deborah Taylor Tate delivered a keynote address.  As the Chairman of the FCC’s Joint Board on Universal Service, Commissioner Tate is at the epicenter of these policy debates.  After her address, a roundtable discussion convened that brought together leaders from Capitol Hill and various industry sectors to explore solutions to the vexing problem of reshaping Universal Service for the Digital Age.

Opening Address by:

• Commissioner Deborah Taylor Tate, Federal Communications Commission

Panelists:

• Mr. Jon Banks, Senior Vice President for Law and Public Policy, United States Telecom Association
• Hon. Kyle E. McSlarrow, President & CEO, National Cable & Telecommunications Association
• Mr. Paul J. Nagle, Repulican Chief Counsel, U.S. Senate Committe on Commerce, Science and Transportation
• Ms. Courtney Reinhard, Minority Counsel, U.S. House of Representatives Committee on Energy and Commerce
• Mr. Lawrence Sarjeant, Vice President Legislative and Regulatory Affairs, Qwest Communications International
• Moderator: Mr. Scott Wallsten, Vice President for Research and Senior Fellow, iGrowthGlobal