[Congressional Record Volume 151, Number 10 (Thursday, February 3, 2005)]
[Senate]
[Pages S985-S986]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  By Mr. SMITH (for himself, Mr. Bayh, Mr. Allen, Mr. Wyden, Mr. 
McCain, Mr. Levin, Mr. Crapo, Mr. Dayton, Mr. Hagel, Mr. Baucus, Mr. 
Coleman, Mr. Hatch, Mr. Bennett, Mr. Thomas, Mr. Enzi, Mr. Kyl, Mr. 
Grassley, Mr. Craig, Mr. Lugar, and Mr. Domenici):
  S. 284. A bill to distribute universal service support equitability 
throughout rural America, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.
  Mr. SMITH. President, I rise today to shine a spotlight on one of the 
most

[[Page S986]]

lopsided and unfair programs in the Federal Government, and to 
reintroduce legislation to correct it.
  Every year, the Federal Government collects millions of dollars in 
``universal service'' surcharges on telephone bills. In part, this 
money is intended to be used to provide, affordable telephone service 
in isolated, rural areas--a goal we all support.
  Unfortunately, instead of sending these funds equitably to rural 
areas throughout the United States, many residents in 40 States--
including some of the most rural States in the country--receive no 
support from this program, while a few States receive enormous 
windfalls. In 2005, about 75 percent of a key universal service fund 
account is projected to go to just three States and a single State will 
receive more than half of the funding provided by this program. All of 
this continues the pattern of lopsided funding distribution seen in 
recent years.
  I am referring to the Federal Universal Service Fund program for so-
called ``non-rural carriers.'' This is a ridiculous misnomer because 
more than 70 percent of all rural Americans are served by one of 30 so-
called ``non-rural'' carriers. If you live in a small, isolated town or 
rural area, you are likely served by one these carriers, and chances 
are your community is receiving none of the benefits of this program.
  The calls to fix this program have been growing louder and louder. In 
the 108th Congress, more than 80 independent organizations and state 
and local officials called on us to fix this unfair, broken program, 
including 21 governors, 38 State utility commissioners, the American 
Farm Bureau Federation, the National Grange, and groups representing 
business, labor, consumers, minorities, and the rural poor.
  Responding to that broad support, more than 30 Senators and 80 
Representatives cosponsored my bill or the House companion measure 
offered by Mr. Terry of Nebraska and Mr. Stupak of Michigan last 
Congress. And the Senate Commerce Committee approved my bill on a 
strong bipartisan vote.
  Today, I am reintroducing the Rural Universal Service Equity Act, 
along with 19 of my colleagues. This legislation would guarantee a 
fairer, more targeted distribution of the non-rural-carrier account by 
requiring allocations to be based on actual community needs, not an 
arbitrary mathematical formula.
  Beyond basic fairness for the majority of rural America, there are at 
least two additional reasons to enact this legislation.
  First, it will help overcome the ``digital divide'' between urban and 
rural America, and prevent it from growing worse. As long as the 
current rules remain in place, the majority of rural communities and 
the telephone companies that serve them will suffer a significant 
competitive disadvantage in today's digital economy.
  Second, the bill will fix this program while keeping a tight rein on 
USF expenditures. My legislation would redistribute existing funds more 
fairly, without imposing any additional burdens on the USF or requiring 
increased federal spending or revenues.
  Finally, my bill would not interfere with important efforts to fix 
other serious problems in the Universal Service Fund. We all know the 
USF must be modernized and reformed to reflect the challenges and 
technologies of the 21st Century.
  But the broader USF reform debate is likely to be contentious and 
protracted. In the meantime, we should be able to correct a shameful 
inequity in a program that is intended to benefit the majority of rural 
Americans. And we should do it as soon as possible.
  Once again I thank my colleagues and friends across America who have 
helped in this effort to date, and I call upon all members of the 
Senate to become cosponsors of the Rural Universal Service Equity Act. 
I ask unanimous consent that the text of legislation be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 284

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rural Universal Service 
     Equity Act of 2005''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) The Federal Communications Commission's high-cost model 
     support program for certain carriers provides no Federal 
     support to 40 States.
       (2) Federal universal service support should be calculated 
     and targeted to small geographic regions within a State to 
     provide greater assistance to the rural consumers most in 
     need of support.
       (3) Local telephone competition and emerging technologies 
     are threatening the viability of Federal universal service 
     support.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To begin consideration of universal service reform.
       (2) To spread the benefits of the existing Federal high-
     cost model support mechanism more equitably across the 
     nation.

     SEC. 3. COMPTROLLER GENERAL REPORT ON NEED TO REFORM HIGH-
                   COST SUPPORT MECHANISM.

       Not later than one year after the date of the enactment of 
     this Act, the Comptroller General shall submit to Congress a 
     report on the need to reform the high-cost support mechanism 
     for rural, insular, and high-cost areas. As part of the 
     report, the Comptroller General shall provide an overview and 
     discuss whether--
       (1) existing Federal and State high-cost support mechanisms 
     ensure rate comparability between urban and rural areas;
       (2) the Federal Communications Commission and the States 
     have taken the necessary steps to remove implicit support;
       (3) the existing high-cost support mechanism has affected 
     the development of local competition in urban and rural 
     areas; and
       (4) amendments to section 254 of the Communications Act of 
     1934 (47 U.S.C. 254) are necessary to preserve and advance 
     universal service.

     SEC. 4. ELIGIBILITY FOR UNIVERSAL SERVICE SUPPORT FOR HIGH-
                   COST AREAS.

       Section 254 of the Communications Act of 1934 (47 U.S.C. 
     254) is amended by adding at the end the following new 
     subsection:
       ``(m) Universal Service Support for High-cost Areas.--
       ``(1) Calculating support.--In calculating Federal 
     universal service support for eligible telecommunications 
     carriers that serve rural, insular, and high-cost areas, the 
     Commission shall, subject to paragraphs (2) and (3), revise 
     the Commission's support mechanism for high-cost areas to 
     provide support to each wire center in which the incumbent 
     local exchange carrier's average cost per line for such wire 
     center exceeds the national average cost per line by such 
     amount as the Commission determines appropriate for the 
     purpose of ensuring the equitable distribution of universal 
     service support throughout the United States.
       ``(2) Hold harmless support.--In implementing this 
     subsection, the Commission shall ensure that no State 
     receives less Federal support calculated under paragraph (1) 
     than the State would have received, up to 10 percent of the 
     total support distributed, under the Commission's support 
     mechanism for high-cost areas as in effect on the date of the 
     enactment of this subsection.
       ``(3) Limitation on total support to be provided.--The 
     total amount of support for all States, as calculated under 
     paragraphs (1) and (2), shall be equivalent to the total 
     support calculated under the Commission's support mechanism 
     for high-cost areas as in effect on the date of the enactment 
     of this subsection.
       ``(4) Construction of limitation.--The limitation in 
     paragraph (3) shall not be construed to preclude fluctuations 
     in support on the basis of changes in the data used to make 
     such calculations.
       ``(5) Implementation.--Not later than 180 days after the 
     date of the enactment of this subsection, the Commission 
     shall complete the actions (including prescribing or amending 
     regulations) necessary to implement the requirements of this 
     subsection.
       ``(6) Definition.--In this subsection, the term 
     `Commission's support mechanism for high-cost areas' means 
     section 54.309 of title 47, Code of Federal Regulations and 
     the regulations referred to in such section.''.

     SEC. 5. NO EFFECT ON RURAL TELEPHONE COMPANIES.

       Nothing in this Act shall be construed to affect the 
     support provided to an eligible telecommunications carrier 
     under section 214(e) of the Communications Act of 1934 (47 
     U.S.C. 214(e)) that is a rural telephone company (as defined 
     in section 3 of such Act (47 U.S.C. 153)).
                                 ______