Georgia Bill Would Eliminate Universal Access Fund

A Georgia bill would rapidly eliminate the state’s $16 million Universal Access Fund (UAF), which funds rural phone companies and is financed by larger telecom companies like AT&T. HB-855 (http://xrl.us/bmwmgc) is being considered in the House. It would ignore the 20-year phase out of the UAF passed in 2010 and instead eliminate it by 2015. If the bill were passed, the UAF would be reduced to $6 million in 2013, to $3 million in 2014 and be eliminated in 2015.

Legislation passed in 2010 was also supposed to eliminate the high-cost portion of the UAF to reduce the amount of money being put into it. But phone companies applied for $9 million in 2010, $12 million in 2011 and over $20 million this year, said bill sponsor Mark Hamilton (R-Cumming). The bill was passed by the House Committee on Energy, Utilities and Telecom with only one no vote, and is being considered in the rules committee. Co-sponsors are Reps. Don Parsons (R-Marietta), Chuck Martin (R-Alpharetta), Billy Horne (R-Newnan), Karla Drenner (D-Avondale Estates) and Edward Lindsey (R-Atlanta).

It’s likely that local phone rates for those getting funding will increase if the bill is passed, Bill Edge from the Georgia Public Services Commission said, but others’ rates will go down. Seventeen of the state’s 20 eligible rural telcos apply for assistance from the fund. They can’t offset their costs without the UAF. Despite the loss for rural phone companies, the financers of the UAF would no longer have to contribute to the fund and could pass those savings on to their customers.

"This subsidy fund has been misused,” said AT&T spokeswoman Stephanie Walker. “Without reform, the Georgia Universal Access Fund will be a target for more growth, which will inflate the amount consumers already pay for this hidden tax.” AT&T supports the bill because it would end “once and for all, the state subsidies that our customers pay to rural phone providers,” she said.

With federal USF reform, companies will ask for even more money from the UAF, which is why it’s important for the House to pass this bill, Hamilton said. “Legislators have made it clear they want the fund to eventually go away, and to force local companies to end their reliance on this fund,” Edge said.

The UAF hinders companies from reaching their full potential, Hamilton said. They use the UAF as a “safety net,” and it has become a crutch that halts innovation and competition in the market, he said. Passage will “encourage competition and bring about lower prices and better services for the consumer” as well as “make Georgia a more attractive place for telecommunications investment and encourage the deployment of advanced technologies,” the bill said.