O'Rielly, Clyburn Back Means-Testing High-Cost USF Support Programs

FCC Commissioners Michael O'Rielly and Mignon Clyburn backed means-testing USF support for broadband/telecom service in high-cost areas. It's "time to fix a fundamental structural defect" in the program, which is the subsidization of communications access for people "who don't need or deserve governmental assistance," they said in a rare joint blog post Wednesday. They sought comment on various questions and hope to bring the issue before the commission "in the very near future." O'Rielly recently said he and Clyburn were working on a draft item (see 1705180061). Representatives of Chairman Ajit Pai, USTelecom and NTCA declined comment.

"We should end the practice of spending scarce USF high-cost support to illogically subsidize the cost of communications services for very rich people who happen to live in the more rural portions of our nation," wrote O'Rielly and Clyburn. "For example, if someone is earning one million dollars per year, why should the American ratepayer be subsidizing their telephone and broadband service? And why are poor and middle-class Americans across the country asked to foot the phone and broadband bills of those in some of the wealthiest communities in America?"

The call is not about "stoking a debate about societal inequities," they said. "Instead, it's about instilling some common sense in a government subsidy system where it's desperately needed. Because of our budgetary constraints, each dollar spent subsidizing service unnecessarily is a dollar that is not being used to help bring broadband to unserved Americans, particularly those who cannot afford the full cost of service."

Democrat Clyburn and Republican O'Rielly want comment on whether and how to means-test the high-cost USF program. They noted means-testing is used in the USF Lifeline program subsidizing service to low-income people and in many other federal government assistance programs. They said the most recent FCC solicitation of high-cost program means-testing came in a 2011 Further NPRM attached to a USF/intercarrier-compensation overhaul order. "It sought comment on limiting Remote Areas Fund support -- which, at the time, was expected to take the form of consumer vouchers -- to income-eligible consumers," they wrote. "We now invite comment on using means-testing more broadly within each of the high-cost programs." Only the FCC can formally request comments, not individual members.

The two asked numerous specific questions about the impact of means-testing and how it could be implemented for high-cost support. Another possibility would be to use means-testing "as a weighting factor in future reverse auctions" or other USF distribution mechanisms. "Alternatively, an idea that was incorporated into prior legislative efforts to reform universal service would have excluded support to service for 'consumers in households in high cost areas where the Commission determines, based on publicly available information, that a service area has a substantially high percentage of households with income at or above the 95th percentile of national household income levels or develops an equivalent measurement,'" they wrote. "What information could the Commission use to make such a determination? How should the Commission define 'substantially high percentage'? Instead of service area, should the geographic area be a census block and, if so, how would that change the definition of 'substantially high percentage'?"