Statement of Amy Klobuchar Hearing: Universal Service

Statement

Statement of Amy Klobuchar Hearing: Universal Service

Thank you Mr. Chairman and Mr. Vice Chairman. I am pleased to be here to address the challenges facing the Universal Service Fund and to work on ways to reform it.

The USF is not new to me - in my years as a telecoms lawyer I dealt frequently with USF issues. And in the past two years, I've been all over my home state, Minnesota, talking about the need to serve all of our communities with affordable and up-to-date telecommunications services.

But I am a newcomer to the more recent debates about the best methods to sustain, reform, and fairly allocate the costs of the Fund.

So I look forward to engaging with all of the stakeholders, with the FCC and the Joint Board, and with my colleagues, and to asking a number of important questions. They include:

Should the contribution be assessed on a "per connection" basis or a "per working telephone number" basis?

How do ETCs fit into the purposes and operation of the Fund?

How do we best allocate high cost support for non-rural carriers?

How do we improve our method of distribution from the Fund?

Throughout this debate, I think it is vital that we remember the fundamental purpose of Universal Service, as stated in the Communications Act of 1934: It is to ensure that "all the people of the United States," have access to "a rapid, efficient, Nation-wide, and worldwide wire and radio communication service with adequate facilities at reasonable charges . . ."

And that brings me to my top priority in this area: bridging the digital divide and bringing high-speed broadband to every community in Minnesota and every corner of this country.

I have talked in previous hearings about the persistent urban-rural digital divide. In May 2006, the GAO reported that broadband takeup rates were 70% higher in suburban and urban homes than in rural homes. A 2006 Pew study found a similar divide.

Here is another troubling statistic: more than 1 in 10 of the most rural counties do not even have a single high-speed Internet connection - in the entire county.

A community that is left without affordable broadband access is a community that will be left behind. A 2006 MIT study found that towns which had mass-market broadband experienced markedly faster growth in employment and number of businesses.

I am convinced that the market alone will not solve this problem. Broadband deployment will lag behind in rural areas because the private sector gets a much higher return in areas of high population density and high income. I am convinced that the federal government must assist underserved areas - especially rural areas - in partnership with states, towns, and the private sector.

That much is clear to me. What is a little less clear is the precise form federal government that involvement should take.

The FCC and the Joint Board have resisted adding broadband to the list of covered services under the USF. They have consistently decided not to. I want to explore that decision, especially in light of the fact that broadband meets one of the key criteria of the Fund: like plain-old telephone service decades ago, it has become "essential to education, public health, and public safety."

I believe that an updated, reformed Universal Service Fund is very likely the best vehicle for bringing broadband to rural America. But I am willing to listen to those who say that some other vehicle will get us faster and more effectively to our destination.

Some have talked about the possibilities of auctions, others about targeted grants and loans, others about tax credits. And, of course, any federal approach must complement existing and emerging digital divide initiatives being undertaken at the state and local level.

I intend to look at every possible vehicle, with a strong inclination toward adding broadband to the USF, and I do not intend to rest until we have met this challenge.

Thank you.

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