Capping USF Fund will severely impact Illinois

By John Rooney | Aug 12, 2007

John Rooney

I was recently asked to testify before the U.S. Senate Committee on Commerce, Science and Technology concerning proposed changes to the Universal Service Fund (USF). Congress created the USF to provide wireless carriers with an incentive to build communications networks in sparsely populated rural areas that would otherwise not support investment.

This was a unique and important opportunity for U.S. Cellular. In 2007 alone, wireless providers will contribute over $2.6 billion – or 37 percent of total funding - to the $7 billion fund.

Since 1999, more than $22 billion in consumer contributions has been provided to rural landline phone companies across the country that have mature networks, while less than $2 billion has gone to rural wireless carriers over that same time, despite the fact that we have much work to do in building new infrastructure.

Despite this, the Federal Communications Commission (FCC) is considering reducing the already-limited funding for wireless service in rural communities in Illinois and across America.

Specifically, the FCC is considering a proposal to cap the USF support to wireless carriers. In their haste to enact USF "reform" the FCC may enact this cap within the next few weeks – without fully considering the effect of this decision on rural Americans.

The effect of such a cap could be disastrous, as Chief Deputy Sheriff Everett Flannery of rural Kennebec County, Maine also made clear during the Senate hearing.

The Sheriff testified that the lack of reliable wireless service in rural areas presents a serious public safety problem. Public safety officials use wireless service to do their jobs – whether to call ahead when responding to a domestic violence situation or to assess a hostage situation. Also, poor wireless service prevents citizens from immediately contacting authorities in the event of an emergency.

Without question, wireless is the future of telecommunications in Illinois, and we know that residents of our rural communities experience similar challenges. Cell phones are no longer luxury items; they are a fundamental necessity.

Today, the lack of high-quality wireless coverage in rural areas is a critical public safety issue. First responders, law enforcement, and rural citizens all depend on high-quality coverage to reliably deal with critical safety issues ranging from natural disasters to automotive emergencies to domestic violence. Moreover, E-911 technology will not work properly unless an area has high-quality wireless coverage.

A proposed cap would hit Illinoisans especially hard, because while Illinois consumers contribute an estimated $267 million into the federal USF, the state currently draws out only $1,971 per year to use on wireless infrastructure development.

This means that all carriers in Illinois will be forced to share less than $2,000 each year, while neighboring states such as Iowa, Wisconsin, Indiana and Kentucky will continue to draw millions of dollars annually to upgrade their wireless networks. Comparatively, Iowa would be capped at $40 million, Wisconsin at $50 million and Kentucky at $21 million.

A freeze in funding will also widen the technological gap between urban and rural areas in the state. In addition, a freeze will slow economic development in our rural communities by hampering the state's ability to attract new businesses and tourists. It also will prevent people already working and living in rural areas from enjoying the same advanced technology and convenience as those in urban areas.

Those who favor a cap fail to acknowledge the real reason for fund growth: Over the past three years, more than 10 percent of wireline customers have "cut the cord"; yet federal support to landline companies remains steady at $3 billion per year.

That excess, which will only accelerate as consumers continue to choose wireless for their voice communication service, is largely funded by wireless consumers, who see no benefit from USF contributions that flow to wireline networks.

U.S. Cellular has a deep commitment to rural America. The majority of our service areas are sparsely populated and we have built our business on providing high-quality service to all customers, not just those in urban centers.

We are fast becoming a wireless nation, and to provide the best possible service to rural Americans, wireless carriers need a fair share of universal service funding.

To this end, U.S. Cellular is supporting Connecting Rural America, a diverse coalition of public safety officials, business leaders and concerned citizens across the country, in an effort to take a stand for rural America. Visit to make your voice heard.

We cannot afford to cap USF funding for wireless customers, because we cannot afford to leave rural America behind.

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