[Congressional Record Volume 151, Number 106 (Friday, July 29, 2005)]
[Senate]
[Pages S9499-S9507]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH (for himself, Mr. Dorgan, and Mr. Pryor):
  S. 1583. A bill to amend the Communications Act of 1934 to expand the 
contribution base for universal service, establish a separate account 
within the universal service fund to support the deployment of 
broadband service in unserved areas of the United States, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.
  Mr. SMITH. Mr. President, I rise today with Senators Dorgan and Pryor 
to introduce the ``Universal Service for the 21st Century Act.'' For 
more than 70 years, the preservation and advancement of universal 
service has been a fundamental goal of our telecommunications laws. In 
order to ensure the long term sustainability of the fund and to add 
support for broadband services that are increasingly important to our 
Nation's economic development, our bill reforms the system of payments 
into the universal service fund and creates a $500 million account to 
bring broadband to unserved areas of the country.
  The achievements of the universal service fund are undeniable. 
Affordable telephone services are available in many remote and high 
cost areas of the country, including Oregon, because of the fund. Large 
and small telecommunications carriers serve sparsely populated rural 
communities and schools and libraries receive affordable Internet 
services because of the fund. The need for a robust and sustainable 
universal service system certainly remains, but it has become 
increasingly clear that major reforms are needed if the fund is to meet 
the evolving communications needs of the American people.
  In Section 706 of the Telecommunications Act of 1996, Congress 
directed the Federal Communications Commission, FCC, and the States to 
encourage deployment of advanced telecommunications services, including 
broadband, on a reasonable and timely basis. Earlier this month, the 
FCC released data on broadband connections that shows significant 
gains, in deployment. According to the report, there were nearly 29 
million broadband connections throughout the country in 2004.

[[Page S9506]]

  But we can do more. Although there have been well documented 
successes in the deployment of broadband services in many parts of the 
country, others remain unserved, whether due to geography, low 
population density or other reasons. These largely rural areas deserve 
the benefits of an advanced communications infrastructure and 
increasingly need that infrastructure to build and maintain robust 
economies.
  Accordingly, to meet the needs of these communities, we have created 
a $500 million ``Broadband for Unserved Areas Account'' within the 
universal service fund that will be used solely for the deployment of 
broadband networks in unserved areas. This funding will be awarded 
competitively based on merit to a single broadband provider in each 
unserved area. The FCC will establish the guidelines for this new 
account. All technologies will be eligible for funding.
  The bill also directs the FCC to update its definition of broadband 
to ensure that our communications policies are forward-looking and 
competitive with the speeds and capabilities available in other 
industrialized countries. The FCC will revisit its definition annually 
and will prepare reports for Congress regarding gains in broadband 
penetration in unserved areas and the need for an increase or decrease 
in funding.
  In addition, the bill addresses a crisis in the structure of the 
universal service fund which has threatened its long term viability. 
Currently, the burden of universal service fund contributions is placed 
on a limited class of carriers, causing inequities in the system and 
incentives to avoid contribution. As demands on the fund increase, 
contributors are being forced to pay more. This tension threatens to 
cripple the fund. Our bill therefore authorizes and directs the FCC to 
establish a permanent mechanism to support universal service.
  By reforming the universal service system and spurring the deployment 
of broadband services, our legislation will ensure that our Nation's 
communications infrastructure will continue to grow, and to be the 
robust and connected network that Americans expect and deserve.
  I ask that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1583

       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 ``Universal Service for the 
     21st Century Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) The preservation and advancement of universal service 
     is a fundamental goal of the Communications Act of 1934 and 
     the Telecommunications Act of 1996.
       (2) Access throughout the nation to high-quality and 
     advanced telecommunications and information services is 
     essential to secure the many benefits of our modern society.
       (3) As the Internet becomes a critical element of any 
     economic and social growth, universal service should shift 
     from sustaining voice grade infrastructure promoting the 
     development of efficient and advanced networks that can 
     sustain advanced communications services.
       (4) The current structure established by the Federal 
     Communications Commission has placed the burden of universal 
     service support on only a limited class of carriers, causing 
     inequities in the system, incentives to avoid contribution, 
     and a threat to the long term sustainability of the universal 
     service fund.
       (5) Current fund contributors are paying an increasing 
     portion of their interstate and international service revenue 
     into the universal service fund.
       (6) Any fund contribution system should be equitable, 
     nondiscriminatory and competitively neutral, and the funding 
     mechanism must be sufficient to ensure affordable 
     communications services for all.

     SEC. 3. UNIVERSAL SERVICE FUND CONTRIBUTION REQUIREMENTS.

       (a) Inclusion of Intrastate Revenues.--Section 254(d) of 
     the Communications Act of 1934 (47 U.S.C. 254(d)) is 
     amended--
       (1) by striking ``Every'' and inserting ``Notwithstanding 
     section 2(b) of this Act, a'';
       (2) by striking ``interstate'' each place it appears; and
       (3) by adding at the end ``Nothing in this subsection 
     precludes a State from adopting rules or regulations to 
     preserve and advance universal service within that State as 
     permitted by section 2(b) and subsections (b) and (f) of this 
     section.''.
       (b) Universal Service Proceeding.--
       (1) Proceeding.--The Federal Communications Commission 
     shall initiate a proceeding, or take action pursuant to any 
     proceeding on universal service existing on the date of 
     enactment of this Act, to establish a permanent mechanism to 
     support universal service, that will preserve and enhance the 
     long term financial stability of universal service, and will 
     promote the public interest.
       (2) Criteria.--In establishing such a permanent mechanism, 
     the Commission may include collection methodologies such as 
     total telecommunications revenues, the assignment of 
     telephone numbers and any successor identifier, connections 
     (which could include carriers with a retail connection to a 
     customer), and any combination thereof if the methodology--
       (A) promotes competitive neutrality among providers and 
     technologies;
       (B) to the greatest extent possible ensures that all 
     communications services that are capable of supporting 2-way 
     voice communications be included in the assessable base for 
     universal service support;
       (C) takes into account the impact on low volume users, and 
     proportionately assesses high volume users, through a 
     capacity analysis or some other means; and
       (D) ensures that a carrier is not required to contribute 
     more than once for the same transaction, activity, or 
     service.
       (3) Excluded providers.--If a provider of communications 
     services that are capable of supporting 2-way voice 
     communications would not contribute under the methodology 
     established by the Commission, the Commission shall require 
     such a provider to contribute to universal service under an 
     equitable alternative methodology if exclusion of the 
     provider from the contribution base would jeopardize the 
     preservation, enhancement, and long term sustainability of 
     universal service.
       (4) Deadline.--The Commission shall complete the proceeding 
     and issue a final rule not more than 6 months after the date 
     of enactment of this Act.

     SEC. 4. INTERCARRIER COMPENSATION.

       (a) Jurisdiction.--Notwithstanding section 2(b) of the 
     Communications Act of 1934 (47 U.S.C. 152(b)), the Federal 
     Communications Commission shall have exclusive jurisdiction 
     to establish rates for inter-carrier compensation payments 
     and shall establish rules providing a comprehensive, unified 
     system of inter-carrier compensation, including compensation 
     for the origination and termination of intrastate 
     telecommunications traffic.
       (b) Criteria.--In establishing these rules, and in 
     conjunction with its action in its universal service 
     proceeding under section 3, the Commission, in consultation 
     with the Federal-State Joint Board on Universal Service, 
     shall--
       (1) ensure that the costs associated with the provision of 
     interstate and intrastate telecommunications services are 
     fully recoverable;
       (2) examine whether sufficient requirements exist to ensure 
     traffic contains necessary identifiers for the purposes of 
     inter-carrier compensation; and
       (3) to the greatest extent possible, minimize opportunities 
     for arbitrage.
       (c) Sufficient Support.--The Commission should, to the 
     greatest extent possible, ensure that as a result of its 
     universal service and inter-carrier compensation proceedings, 
     the aggregate amount of universal service support and inter-
     carrier compensation provided to local exchange carriers with 
     fewer than 2 percent of the Nation's subscriber lines will be 
     sufficient to meet the just and reasonable costs of such 
     local exchange carriers.
       (d) Negotiated Agreements.--Nothing in this section 
     precludes carriers from negotiating their own inter-carrier 
     compensation agreements.
       (e) Deadline.--The Commission shall complete the pending 
     Intercarrier Compensation proceeding in Docket No. 01-92 and 
     issue a final rule not more than 6 months after the date of 
     enactment of this Act.

     SEC. 5. ESTABLISHMENT OF BROADBAND ACCOUNT WITHIN UNIVERSAL 
                   SERVICE FUND.

       Part I of title II of the Communications Act of 1934 (47 
     U.S.C. 201 et seq.) is amended by inserting after section 254 
     the following:

     ``SEC. 254A. BROADBAND FOR UNSERVED AREAS ACCOUNT.

       ``(a) Account Established.--
       ``(1) In general.--There shall be, within the universal 
     service fund established pursuant to section 254, a separate 
     account to be known as the `Broadband for Unserved Areas 
     Account'.
       ``(2) Purpose.--The purpose of the account is to provide 
     financial assistance for the deployment of broadband 
     communications services to unserved areas throughout the 
     United States.
       ``(b) Implementation.--
       ``(1) In general.--The Commission shall by rule establish--
       ``(A) guidelines for determining which areas may be 
     considered to be unserved areas for purposes of this section;
       ``(B) criteria for determining which facilities-based 
     providers of broadband communications service, and which 
     projects, are eligible for support from the account;
       ``(C) procedural guidelines for awarding assistance from 
     the account on a merit-based and competitive basis;
       ``(D) guidelines for application procedures, accounting and 
     reporting requirements, and other appropriate fiscal controls 
     for assistance made available from the account; and

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       ``(E) a procedure for making funds in the account available 
     among the several States on an equitable basis.
       ``(2) Study and annual reports on unserved areas.--
       ``(A) In general.--Within 6 months after the date of 
     enactment of the Universal Service for the 21st Century Act, 
     the Commission shall conduct a study to determine which areas 
     of the United States may be considered to be `unserved areas' 
     for purposes of this section. For purposes of the study and 
     for purposes of the guidelines to be established under 
     subsection (a)(1), the availability of broadband 
     communications services by satellite in an area shall not 
     preclude designation of that area as unserved if the 
     Commission determines that subscribership to the service in 
     that area is de minimis.
       ``(B) Annual updates.--The Commission shall update the 
     study annually.
       ``(C) Report.--The Commission shall transmit a report to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Energy and 
     Commerce setting forth the findings and conclusions of the 
     Commission for the study and each update under this paragraph 
     and making recommendations for an increase or decrease, if 
     necessary, in the amounts credited to the account under this 
     section.
       ``(3) State involvement.--The Commission may delegate the 
     distribution of funding under this section to States subject 
     to Commission guidelines and approval by the Commission.
       ``(c) Limitations.--
       ``(1) Annual amount.--Amounts obligated or expended under 
     subsection (c) for any fiscal year may not exceed 
     $500,000,000.
       ``(2) Use of funds.--To the extent that amounts in the 
     account are not obligated or expended for financial 
     assistance under this section, they shall be used to support 
     universal service under section 254.
       ``(3) Support limited to facilities-based single provider 
     per unserved area.--Assistance under this section may be 
     provided only to--
       ``(A) facilities-based providers of broadband 
     communications service; and
       ``(B) 1 facility-based provider of broadband communications 
     service in any unserved area.
       ``(d) Application With Sections 214, 254, and 410.--
       ``(1) Section 214(e).--Section 214(e) shall not apply to 
     the Broadband for Unserved Areas Account.
       ``(2) Section 254.--Section 254 shall be applied to the 
     Broadband for Unserved Areas Account--
       ``(A) by disregarding--
       ``(i) subsections (a) and (e) thereof; and
       ``(ii) any other provision thereof determined by the 
     Commission to be inappropriate or inapplicable to 
     implementation of this section; and
       ``(B) by reconciling, to the maximum extent feasible and in 
     accordance with guidelines prescribed by the Commission, the 
     implementation of this section with the provisions of 
     subsections (h) and (l) thereof.
       ``(3) Section 410.--Section 410 shall not apply to the 
     Broadband for Unserved Areas Account.
       ``(e) Definitions.--In this section:
       ``(1) Broadband.--
       ``(A) In general.--The term `broadband' shall be defined by 
     the Commission in accordance with the requirements of this 
     paragraph.
       ``(B) Revision of initial definition.--Within 30 days after 
     the date of enactment of the Universal Service for the 21st 
     Century Act, the Commission shall revise its definition of 
     broadband to require a data rate--
       ``(i) greater than the 200 kilobits per second standard 
     established in its Section 706 Report (14 FCC Rec. 2406); and
       ``(ii) consistent with data rates for broadband 
     communications services generally available to the public on 
     the date of enactment of that Act.
       ``(C) Annual review of definition.--The Commission shall 
     review its definition of broadband no less frequently than 
     once each year and revise that definition as appropriate.
       ``(2) Broadband communications service defined.--The term 
     `broadband communications service' means a high-speed 
     communications capability that enables users to originate and 
     receive high-quality voice, data, graphics, and video 
     communications using any technology.''.

     SEC. 6. IMPLEMENTATION OF SECTION 254A.

       The Federal Communications Commission shall complete a 
     proceeding and issue a final rule to implement section 254A 
     of the Communications Act of 1934 not more than 6 months 
     after the date of enactment of this Act.

  Mr. DORGAN. Mr. President, today my colleagues Senators Smith, Pryor 
and I are introducing legislation to ensure the sustainability and 
longevity of the Universal Service Fund and to support the deployment 
of broadband to unserved areas.
  Section 254 of the 1996 Telecommunications Act sets forth the 
principles of universal service. Section 254 states that all citizens, 
including rural consumers, deserve access to telecommunications 
services that are reasonably comparable to those services provided in 
urban areas, at reasonably comparable rates.
  This goal to ensure that rural consumers are not left behind 
continues to be critical, particularly as technology advances in leaps 
and bounds in this 21st century. Access to a robust communications 
infrastructure is a necessity for all Americans.
  Our bill will further that goal in two ways. First, it will ensure 
that the Federal Communications Commission, FCC, will address reform of 
universal service and intercarrier compensation to support the cost of 
a national, quality communications network.
  Over time, the Universal Service Fund has become increasingly 
strained, with the burden of support placed on only a limited class of 
carriers, creating inequities in the system and incentives to avoid 
contribution.
  Reform is needed, and our bill directs the FCC to embark upon this 
reform, with specific guidelines to ensure equity and fairness and 
continuing sufficient support for networks.
  In addition, our legislation will set up an account within the 
Universal Service Fund for broadband deployment to unserved areas. This 
will enable deployment of broadband to areas of the country that remain 
prohibitively expensive to serve, leaving consumers in those areas 
behind the technological curve.
  This legislation is only a starting point. I believe more dialogue is 
necessary among my colleagues and industry, in order to achieve 
comprehensive universal service reform. I invite my colleagues to join 
me in this dialogue and in cosponsoring this bill.
  Mr. President, I ask unanimous consent that a summary of this bill be 
printed in the Record following my statement.
                                 ______