U.S. must reform telecom services fund Congress told

June 24, 2008
By Georgina Coolidge

WASHINGTON (Reuters) – Obi-Wan Kenobi, Darth Vader and Luke Skywalker are not typically names you hear being thrown around in a Congressional hearing.

But when world-famous filmmaker George Lucas testified on Capitol Hill on Tuesday, lawmakers could not resist the occasional Star Wars reference.

“The universal service fund needs to be blown up like the Death Star,” said Rep. Mike Doyle, a Pennsylvania Democrat.

The fund was first established in the mid-1990s to help expand telecommunication services to citizens living in rural areas.

Today, the fund provides subsidies for telephone and Internet service in rural, low-income and high-cost areas of the country, as well as schools, hospitals and libraries.

Over the past decade, $51 billion has been spent on the program, according to lawmakers.

The House subcommittee on telecommunications and the Internet heard testimony from several witnesses, including Lucas, about potential reforms to the universal service fund.

Lucas testified as chairman of the George Lucas Educational Foundation, a non-profit group focused on school and education reform in the United States. Lucas told subcommittee members that broadband access is vital in today’s online world, particularly for students and teachers.

“Telecommunications provides the new learning platform of this century and is replacing the textbook as the medium through which a modern education is provided,” he said. “The world’s knowledge is now available online, far beyond what books and materials can provide in schools and libraries themselves.”

During two breaks during the hearing, Congressional staffers and other Star Wars fans posed for pictures with Lucas and got autographs from the filmmaker.

Lucas pushed members to consider a plan in which free broadband would be available for all schools and libraries.

“Just as access to a high-quality education is a civil right, access to modern telecommunications tools for education should be viewed as a digital civil right,” he said.

Both Republican and Democratic lawmakers agreed the program needs to be reformed. But what shape that reform takes is up for debate.

Rep. John Dingell, chairman of the energy and commerce committee, said he believed USF reform was a job for Congress, not the Federal Communications Commission.

One thing most members did agree on was the definition of universal service should be expanded to include broadband service.

Randolph May, president of the Free State Foundation, a Potomac, Maryland-based think tank, told the subcommittee reliance on free-markets should be the base of any reform, not subsidies.

“Any broadband subsidies deemed necessary should not be disbursed or financed through an unreformed universal service regime that resembles the existing one,” he said. “This would perpetuate a system that is economically inefficient, wasteful and competition-suppressing.”

Several House members, including Congressmen Rick Boucher, a Virginia Democrat, and Lee Terry, a Nebraska Republican, are working on bills to reform USF.