FCC Discloses Data on High Cost Universal Service Subsidies

July 8, 2010. The Federal Communications Commission (FCC) responded to questions from the House Commerce Committee (HCC) regarding its high cost universal service subsidy program.

Rep. Joe Barton (R-TX), the ranking Republican on the HCC, stated in a release that "The FCC is not only wasting time chasing a network neutrality `problem´ that doesn't exist, it is wasting Americans' money by failing to reform the Universal Service Fund".

Rep. Barton (at left) continued that "Subscribers now pay close to 14 percent of their long-distance phone bills to subsidize scores of telephone providers in each geographic market while other providers are serving the same markets without a penny of support. It is inexcusable that the FCC chairman is trying to reclassify broadband service under the pretext that the commission lacks authority to implement aspects of the national broadband plan when he should instead be focusing on bipartisan aspects of the plan that he clearly has authority to move on, such as reducing antiquated voice service subsidies."

HCC leaders sent a letter [PDF] to the FCC on June 15, 2010, in which it propounded questions.

In response, the FCC provided a list of the top ten recipients [37 pages in PDF], along with the total of subsidies which they received in 2007, 2008, and 2009.

The FCC also provided a state by state list [7 pages in PDF] of total subsidies for each of the four universal service programs.

The FCC also provided a list of the ten largest per line subsidies [11 pages in PDF]. The highest per line subsidy in 2009 was $17,763. This list also disclosed that one company in Hawaii received $23,945,376 for 2,192 customers, or a subsidy of $10,926 per customer. Also, the top five per line subsidies are all in states with representation on the Senate Commerce Committee (SCC).

The FCC also provided a list [58 pages in PDF] of the ten study areas with the most eligible telecommunications carriers (ETCs). The top ten all had at least ten ETCs.

This part of the FCC's response also contains data on carriers in the same study areas that did not receive subsidies. Rep. Cliff Stearns (R-FL) stated that "the data further reveals that some subsidized areas are highly competitive, being served in whole or in part by more than 60 providers that do not receive any support, calling into question the size, structure and purpose of the subsidies."

The FCC also provided data [22 pages in PDF] on the geographic scope of each study area in the list of top ten study areas by support and by number of ETCs. The FCC also provided data [3 pages in PDF] on local basic residential and single line business rate information for the incumbent ETCs serving the top ten study areas. The FCC also provided a state by state list [133 pages in PDF] of competitive ETCs and the names of such entities grouped by holding company. Finally, the FCC provided information on state universal service programs.