U.S. Telecom opposes cuts to the Universal Service Fund

The U.S. Telecom Association, a trade group that represents broadband service providers, sent a letter to the White House and congressional leaders on Thursday opposing a potential plan to use $1 billion of the Universal Service Fund (USF) for deficit reduction.

“Diverting these funds to deficit reduction would constitute, in practical and legal effect, not only the imposition of a new tax on consumers’ monthly communications bills, but also a dramatic departure from one of the Nation’s highest priorities – the deployment and adoption of broadband service throughout the United States,” wrote U.S. Telecom President Walter B. McCormick, Jr.

{mosads}The USF, which is administered by the Federal Communications Commission, aims to expand access to telephone and Internet service, especially in rural areas. It is funded through mandatory contributions from telecommunication carriers who pass the fee on to consumers through a monthly charge.

Majority Leader Eric Cantor (R-Va.) sent a slide show to Republicans on Tuesday that explained possible cuts that he said had been discussed in debt negotiation talks with Vice President Joe Biden. 

Among potential savings, the slide show listed between $20 billion and $25 billion in “spectrum/USF” savings. Only $1 billion of that amount would come from diverting funds from the USF, sources told Communications Daily.

Cantor’s office declined to comment on ongoing negotiations.