FCC vote may cut funds to wireless carriers

WASHINGTON – While Americans will be electing their next president on Tuesday, the Federal Communications Commission is set to vote on a proposal that critics worry would cut funds to wireless companies providing cell phone towers in rural and underserved areas of Maine and other states.

If approved, Maine wireless carriers would lose $13 million in federal money from the Universal Service Fund’s high-cost program, according to Connecting Rural America, a coalition of advocacy groups, community leaders and elected officials opposing the cuts.

The federal funds would be used by wireless carriers to construct cell phone towers in rural communities in Maine, the coalition says.

Robert Kenny, spokesman for the FCC, said discussions on reform to reduce and redirect costs have been around for years and the time has come for implementing the changes.

“There is more and more demand for high-speed and broadband services,” he said. “We need to reform to address those demands. Without any reform, these programs couldn’t be sustained and could be eliminated.”

Kenny said specifics about the proposals wouldn’t be made public until the vote next week. But he said the FCC, besides redirecting funds, wants to change the formula allocating funds to wireless carriers.

To receive subsidies, the companies would have to reveal their costs – they are not required to now – and make a five-year commitment to build broadband infrastructures.

Earlier this year, the commission started the reform by capping payments to wireless carriers to 2008 amounts until the program is evaluated.

Besides restricting phone coverage for consumers in underserved areas, critics say, cuts would damage Maine businesses and first responders such as firefighters and police officers.

“In rural areas, if there is no signal, people are unable to get help,” Penobscot County Sheriff Glenn Ross said. He is a member of the Maine Sheriffs’ Association, which is part of the coalition opposing the FCC proposal.

Ross said that local law enforcement officials are confronted all the time with weak phone coverage, phone conversations breaking up and areas without signals.

Deputies, who all have cell phones, need to be able to have access wherever they are. And coverage problems may result in not being able to locate people in need of help or protection as the officers use triangulation, he said.

“People are moving towards cell phones, and we need to put the money there,” Ross said. “Great advances have been made thanks to the money from the [Universal Service Fund] invested in Maine, but it is not the time to stop.”

In 2007, Maine received more than $36.5 million through the fund’s high-cost program. More than $13.3 million went to wireless carriers, according to data from the FCC Web site.

US Cellular is supposed to build 18 towers in several Maine rural areas this year and 16 next year with a projected $9.7 million from the fund. Without the federal money, it won’t be possible, Jack Rooney, president and CEO of US Cellular, said in an interview.

“The intent of the FCC is to eliminate payments to wireless carriers,” he said. “It will have a negative impact in Maine. Some of the rural areas where we build towers can’t afford them, so we use [the federal] funds to build them.”

Earlier this year, the federal payments to wireless carriers were capped to allow the FCC to evaluate the program and launch a “path for comprehensive reform,” according to a May FCC press release.

The FCC said the cap on payments to wireless carriers was necessary to “stem the explosive growth” of the Universal Service Fund, financed by consumers who pay more than 11 percent on their phone bills.

The payments to wireless carriers have grown from about $1.5 million in 2000 to more than $1 billion last year, according to the press release. “Left unchecked, this staggering growth forces consumers to pay excessive and ever-increasing contributions to the fund,” the FCC said.

Even if the FCC eliminated payments to wireless carriers, consumers would save only 30 cents a month on their phone bills, Rooney said.

Republican Sens. Olympia Snowe and Susan Collins of Maine sent a joint letter earlier this month to FCC Chairman Kevin Martin asking the commission to reconsider the proposal.

“By limiting the program that supports carriers in rural areas, we risk causing a major setback in the endeavor for universal service for the people that need it most,” they said in a joint press release. “First responders depend on efficient and reliable cell phone service to do their jobs and save lives.”

The FCC created the Universal Service Fund in 1997 to provide telecommunications services to rural and underserved areas.

Through four different programs, the USF subsidizes high-cost rural phone companies -both wireless and landline carriers – Internet and telecom connections for schools and libraries, phone service for low-income customers and telecom costs of health care providers that use telemedicine.