I 

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108TH CONGRESS 

1ST SESSION H. R. 1582

To equitably distribute universal service support throughout rural America, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 3, 2003

Mr. TERRY (for himself, Mr. STUPAK, Mr. STRICKLAND, Mrs. WILSON of New 

Mexico, Mr. SHIMKUS, Mr. CANNON, Mr. INSLEE, Mr. OTTER, Mr. SIMPSON, Mr. TANCREDO, Mr. BISHOP of Utah, Mr. RENZI, Mr. DICKS, Mr. 

OSBORNE, Mr. BEREUTER, Mr. MCINNIS, Mrs. CUBIN, Mr. HASTINGS of 

Washington, Mr. POMEROY, Mr. KLINE, Ms. MCCARTHY of Missouri, Mr. 

RUSH, Mr. RADANOVICH, Mr. ROGERS of Michigan, Mr. BROWN of Ohio, 

Ms. DEGETTE, Mr. BARTON of Texas, Mr. BASS, and Mr. BEAUPREZ) 

introduced the following bill; which was referred to the Committee on Energy and Commerce 

A BILL

To equitably distribute universal service support throughout 

rural America, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Universal Service Fair5 ness Act of 2003’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—The Congress finds the following: 
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1 (1) Consumers living in rural, insular, and high 

2 cost areas should have access to universal services at 

3 affordable rates. 

4 (2) Under the Federal Communication Commis5 sion’s high cost support program for certain car6 riers, two states receive approximately 70 percent of 

7 the Federal support, while 42 states receive no sup8 port. 

9 (3) Calculating Federal universal service sup10 port exclusively on a statewide average basis improp11 erly places responsibility on most State governments 

12 to support high cost areas with minimal assistance 

13 from the Federal Government. 

14 (4) Federal universal service support should be 

15 calculated and targeted to small geographic regions 

16 within a State to provide greater assistance to the 

17 rural consumers most in need of support. 

18 (5) Federal and State support mechanisms for 

19 high cost areas must be reviewed to determine the 

20 extent to which high cost support reform is nec21 essary. 

22 (b) PURPOSES.—It is therefore the purpose of this 

23 Act to provide Federal universal service support to con24 sumers living in rural, insular, and high cost areas by—
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1 (1) spreading the benefits of the existing Fed2 eral support mechanism more equitably across the 

3 nation; 

4 (2) facilitating removal of implicit State sup5 port; and 

6 (3) ensuring that the Federal Communications 

7 Commission develops a Federal support mechanism 

8 that will promote rate comparability between rural 

9 and urban areas. 

10 SEC. 3. ELIGIBILITY FOR UNIVERSAL SERVICE SUPPORT 

11 FOR HIGH COST AREAS. 

12 Section 254 of the Communications Act of 1934 (47 

13 U.S.C. 254) is amended by adding at the end the following 

14 new subsection: 

15 ‘‘(m) UNIVERSAL SERVICE SUPPORT FOR HIGH COST

16 AREAS.—

17 ‘‘(1) CALCULATING SUPPORT.—In calculating 

18 Federal universal service support for eligible tele19 communications carriers that serve rural, insular, 

20 and high cost areas, the Commission shall, subject 

21 to the provisions of paragraphs (2) and (3), revise 

22 the Commission’s support mechanism for high cost 

23 areas to provide support to each wire center in 

24 which the incumbent local exchange carrier’s average 
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1 cost per line for such wire center exceeds 3.75 times 

2 the national average cost per line. 

3 ‘‘(2) HOLD HARMLESS SUPPORT.—In imple4 menting this subsection, the Commission shall pro5 vide support for each State equal to the greater of—

6 ‘‘(A) the amount calculated under the 

7 Commission’s support mechanism for high cost 

8 areas as in effect on the date of the enactment 

9 of this subsection; or 

10 ‘‘(B) the amount calculated pursuant to 

11 paragraph (1). 

12 ‘‘(3) LIMITATION ON SUPPORT TO BE PRO13 VIDED.—Notwithstanding paragraph (2)—

14 ‘‘(A) no State shall receive support that 

15 exceeds 5 percent of the total support cal16 culated under the Commission’s support mecha17 nism for high cost areas as in effect on such 

18 date of enactment; and 

19 ‘‘(B) the total amount of support for all 

20 States shall not exceed the total support cal21 culated under the Commission’s support mecha22 nism for high cost areas as in effect on such 

23 date of enactment. 

24 The limitations in subparagraphs (A) and (B) shall 

25 not be construed to preclude fluctuations in support 
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1 on the basis of changes in the data used to make 

2 such calculations. 

3 ‘‘(4) IMPLEMENTATION.—Not later than 180 

4 days after the date of the enactment of this sub5 section, the Commission shall complete the actions 

6 (including prescribing or amending regulations) nec7 essary to implement the requirements of this sub8 section. 

9 ‘‘(5) DEFINITION.—For purposes of this sub10 section, the term ‘Commission’s support mechanism 

11 for high cost areas’ means section 54.309 of the 

12 Commission’s regulations (47 CFR 54.309), and 

13 regulations referred to in such section.’’. 

14 SEC. 4. GAO REPORT ON NEED TO REFORM HIGH COST 

15 SUPPORT MECHANISM. 

16 Not later than one year after the date of enactment 

17 of this Act, the Comptroller General shall report to Con18 gress on the need to reform the high cost support mecha19 nism for rural, insular, and high cost areas. As part of 

20 this report, the General Accounting Office shall provide 

21 an overview and discuss whether—

22 (1) existing Federal and State high cost sup23 port mechanisms ensure rate comparability between 

24 urban and rural areas; 
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1 (2) the Federal Communications Commission 

2 and the States have taken the necessary steps to re3 move implicit support; 

4 (3) the existing high cost support mechanism 

5 has affected the development of local competition in 

6 urban and rural areas; and 

7 (4) amendments to section 254 of such Act are 

8 necessary to preserve and advance universal service. 

9 SEC. 5. NO EFFECT ON RURAL TELEPHONE COMPANIES. 

10 Nothing in this Act shall be construed to affect the 

11 support provided to an eligible telecommunications carrier 

12 under section 214(e) of the Communications Act of 1934 

13 (47 U.S.C. 214(e)) that is a rural telephone company (as 

14 defined in section 3 of such Act (47 U.S.C. 153)).

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