III 

109TH CONGRESS 

1ST SESSION S. 284 

To distribute universal service support equitably throughout rural America, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 3, 2005 

Mr. SMITH (for himself, Mr. BAYH, Mr. ALLEN, Mr. WYDEN, Mr. MCCAIN, 

Mr. LEVIN, Mr. CRAPO, Mr. DAYTON, Mr. HAGEL, Mr. BAUCUS, Mr. 

COLEMAN, Mr. HATCH, Mr. BENNETT, Mr. THOMAS, Mr. ENZI, Mr. 

KYL, Mr. GRASSLEY, Mr. CRAIG, Mr. LUGAR, and Mr. DOMENICI) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To distribute universal service support equitably 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 ‘‘Rural Universal Serv5 ice Equity Act of 2005’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 
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1 (1) The Federal Communications Commission’s 

2 high-cost model support program for certain carriers 

3 provides no Federal support to 40 States. 

4 (2) Federal universal service support should be 

5 calculated and targeted to small geographic regions 

6 within a State to provide greater assistance to the 

7 rural consumers most in need of support. 

8 (3) Local telephone competition and emerging 

9 technologies are threatening the viability of Federal 

10 universal service support. 

11 (b) PURPOSES.—The purposes of this Act are as fol12 lows: 

13 (1) To begin consideration of universal service 

14 reform. 

15 (2) To spread the benefits of the existing Fed16 eral high-cost model support mechanism more equi17 tably across the nation. 

18 SEC. 3. COMPTROLLER GENERAL REPORT ON NEED TO RE19 FORM HIGH-COST SUPPORT MECHANISM. 

20 Not later than one year after the date of the enact21 ment of this Act, the Comptroller General shall submit 

22 to Congress a report on the need to reform the high-cost 

23 support mechanism for rural, insular, and high-cost areas. 

24 As part of the report, the Comptroller General shall pro25 vide an overview and discuss whether— 
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1 (1) existing Federal and State high-cost sup2 port mechanisms ensure rate comparability between 

3 urban and rural areas; 

4 (2) the Federal Communications Commission 

5 and the States have taken the necessary steps to re6 move implicit support; 

7 (3) the existing high-cost support mechanism 

8 has affected the development of local competition in 

9 urban and rural areas; and 

10 (4) amendments to section 254 of the Commu11 nications Act of 1934 (47 U.S.C. 254) are necessary 

12 to preserve and advance universal service. 

13 SEC. 4. ELIGIBILITY FOR UNIVERSAL SERVICE SUPPORT 

14 FOR HIGH-COST AREAS. 

15 Section 254 of the Communications Act of 1934 (47 

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

17 new subsection: 

18 ‘‘(m) UNIVERSAL SERVICE SUPPORT FOR HIGH-COST

19 AREAS.— 

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

21 Federal universal service support for eligible tele22 communications carriers that serve rural, insular, 

23 and high-cost areas, the Commission shall, subject 

24 to paragraphs (2) and (3), revise the Commission’s 

25 support mechanism for high-cost areas to provide 
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1 support to each wire center in which the incumbent 

2 local exchange carrier’s average cost per line for 

3 such wire center exceeds the national average cost 

4 per line by such amount as the Commission deter5 mines appropriate for the purpose of ensuring the 

6 equitable distribution of universal service support 

7 throughout the United States. 

8 ‘‘(2) HOLD HARMLESS SUPPORT.—In imple9 menting this subsection, the Commission shall en10 sure that no State receives less Federal support cal11 culated under paragraph (1) than the State would 

12 have received, up to 10 percent of the total support 

13 distributed, under the Commission’s support mecha14 nism for high-cost areas as in effect on the date of 

15 the enactment of this subsection. 

16 ‘‘(3) LIMITATION ON TOTAL SUPPORT TO BE

17 PROVIDED.—The total amount of support for all 

18 States, as calculated under paragraphs (1) and (2), 

19 shall be equivalent to the total support calculated 

20 under the Commission’s support mechanism for 

21 high-cost areas as in effect on the date of the enact22 ment of this subsection. 

23 ‘‘(4) CONSTRUCTION OF LIMITATION.—The lim24 itation in paragraph (3) shall not be construed to 
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1 preclude fluctuations in support on the basis of 

2 changes in the data used to make such calculations. 

3 ‘‘(5) 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 ‘‘(6) DEFINITION.—In this subsection, the term 

10 ‘Commission’s support mechanism for high-cost 

11 areas’ means section 54.309 of title 47, Code of 

12 Federal Regulations and the regulations referred to 

13 in such section.’’. 

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

15 Nothing in this Act shall be construed to affect the 

16 support provided to an eligible telecommunications carrier 

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

18 (47 U.S.C. 214(e)) that is a rural telephone company (as 

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

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