Stimulus Grants, Subsidy Reform Key to Making Broadband Internet Available to All

WASHINGTON - A senior telecommunications executive today made specific recommendations to Congress on how broadband Internet grant money contained in the economic stimulus package and reform of the nation's universal service subsidy system can be used to deploy broadband networks to U.S. households throughout the country. 

In testimony before the House Subcommittee on Communications, Technology and the Internet, Tom Tauke, Verizon executive vice president of public affairs, policy and communications, said, "The stimulus funds provide an opportunity to make substantial progress in the universal deployment of broadband services by providing the capital needed to invest in broadband networks in those areas where deployment is not economically viable." 

Tauke said the National Telecommunications and Information Administration and the Rural Utilities Services, the federal entities charged with disbursing the more than $7 billion in grants, should rely on state broadband maps and state technology plans, where they exist, for the initial round of grants. He suggested the initial grants be made for projects: (1) that a state believes will extend broadband service to unserved areas; (2) whose applicants have a successful track record of deploying and providing broadband service; and (3) that use technology appropriate for the area served.  Subsequent rounds of grants can be pinpointed with new data obtained through national broadband "mapping" activities funded by the stimulus, he said.  

Praising efforts by the subcommittee's chairman, Rep. Rick Boucher, D-Va., and other members discussing reform of the universal service system, the Verizon executive said: "The problem is not that we are spending too little money on universal service.  The problem is that we are not spending it on the right things.  It should be spent to deploy mobile wireless and broadband services to unserved areas."

Signaling his interest in working with the committee to "reform and update the Universal Service Fund to better serve rural America," Tauke suggested six reforms to be included in legislation: (1) cap the size of the high-cost fund; (2) use competitive bidding to award funding to mobile wireless carriers (and require that the winning bidder provide service to an entire area); (3) provide support for "middle mile" transport to help with the cost to deploy broadband to underserved areas; (4) eliminate statewide cost averaging and consider an appropriately designed wire-center approach, as in the chairman's legislation; (5) base USF contributions on phone numbers; and (6) give the Federal Communications Commission a deadline to complete inter-carrier compensation reform.

Tauke said these reforms will "help create a Universal Service Fund that is sustainable, meets the needs of consumers in high-cost areas, and provides carriers with the proper incentives to invest and innovate so that all of our citizens can participate in the broadband world we are building."

Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers.  Verizon Wireless operates America's most reliable wireless network, serving more than 80 million customers nationwide.  Verizon's Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the nation's most advanced fiber-optic network.  A Dow 30 company, Verizon employs a diverse workforce of more than 228,000 and in 2007 generated consolidated operating revenues of $93.5 billion.  For more information, visit www.verizon.com.

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