I 
110TH CONGRESS 
1ST SESSION H. R. 2054 
To reform the universal service provisions of the Communications Act of 
1934, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 26, 2007 
Mr. BOUCHER (for himself, Mr. TERRY, Mr. FILNER, Mrs. CAPITO, Mr. 
GRAVES, Mrs. CUBIN, Mr. FORTENBERRY, Mr. MANZULLO, Mr. KING of 
Iowa, and Mr. RADANOVICH) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce 
A BILL 
To reform the universal service provisions of the 
Communications Act of 1934, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Universal Service Re-
form Act of 2007’’. 
SEC. 2. DEFINITIONS. 
Section 3(a) of the Communications Act of 1934 (47 
U.S.C. 153(a)) is amended— 
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(1) by redesignating paragraphs (20) through 
(52) as paragraphs (22) through (54); 
(2) by redesignating paragraphs (11) through 
(19) as paragraphs (12) through (20), respectively; 
(3) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(11) COMMUNICATIONS SERVICE PROVIDER.— 
The term ‘communications service provider’ means 
any entity that— 
‘‘(A) contributes to or receives universal 
service support for the most recent calendar 
quarter ending before the date of enactment of 
the Universal Service Reform Act of 2007; 
‘‘(B) uses telephone numbers or Internet 
protocol addresses, or their functional equiva-
lents or successors, to offer a service or a capa-
bility— 
‘‘(i) that provides or enables real-time 
2-way voice communications; and 
‘‘(ii) in which the voice component is 
the primary function; or 
‘‘(C) offers, directly to the public, or to 
such classes of users as to be effectively avail-
able directly to the public, a physical trans-
mission facility, whether circuit-switched, pack-
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et-switched, a leased line, or using radio fre-
quency transmissions, regardless of the form, 
protocol, or statutory classification of the serv-
ice, that allows an end user to obtain access, 
from a particular end user location, to a net-
work that permits the end user to engage in 
electronic 
communications 
(including 
tele-
communications) with the public.’’; and 
(4) by inserting after paragraph (20) (as redes-
ignated by paragraph (2) of this section) the fol-
lowing new paragraph: 
‘‘(21) HIGH-SPEED BROADBAND SERVICE.— 
‘‘(A) DEFINITION.—The term ‘high-speed 
broadband service’ means a two way network 
that uses the Internet protocol or a successor 
protocol, and the associated capabilities and 
functionalities, services, and applications pro-
vided over an Internet protocol platform or for 
which an Internet protocol capability is an inte-
gral component, and services, facilities, equip-
ment, and applications that enable an end-user 
to receive communications in Internet protocol 
format, regardless of whether the communica-
tions are voice, data, video, or any other form, 
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at a download receiving rate of 1 megabit per 
second or greater. 
‘‘(B) COMMISSION
SPEED
ADJUSTMENT 
REQUIREMENTS.—The Commission shall review 
the speed requirement in subparagraph (A) 
every other year beginning the sixth year after 
implementation of the Universal Service Reform 
Act of 2007 and shall make the necessary ad-
justments to move to higher speeds as deploy-
ment and advancement of new technology al-
lows communications service providers to pro-
vide higher speed broadband to end users in an 
economically efficient manner. 
‘‘(C) INTERNET
PROTOCOL.—The term 
‘Internet protocol’ means the Transmission 
Control Protocol/Internet Protocol, or any pred-
ecessor or successor protocols to such pro-
tocol.’’. 
SEC. 3. UNIVERSAL SERVICE REFORM. 
(a) IN GENERAL.— 
Section 254 of the Communications Act of 
1934 (47 U.S.C. 254) is amended by amending sub-
sections (a) through (e) to read as follows: 
‘‘(a) PROCEDURES TO REFORM UNIVERSAL SERV-
ICE.— 
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‘‘(1) FEDERAL-STATE
JOINT
BOARD
ON
UNI-
VERSAL SERVICE.—Within one month after the date 
of enactment of the Universal Service Reform Act of 
2007, the Commission shall institute and refer to 
the Federal-State Joint Board under section 410(c) 
of this title a proceeding to recommend changes to 
any of its regulations in order to implement section 
214(e) of this title and this section (as amended by 
the Universal Service Reform Act of 2007), includ-
ing the definition of the services that are supported 
by Federal universal service support mechanisms 
and a specific timetable for completion of such rec-
ommendations. In addition to the members of the 
Joint Board required under section 410(c) of this 
title, one member of such Joint Board shall be a 
State-appointed utility consumer advocate nominated 
by a national organization of State utility consumer 
advocates. The Joint Board shall, after notice and 
opportunity for public comment, make its rec-
ommendations to the Commission within 9 months 
after the date of enactment of the Universal Service 
Reform Act of 2007. 
‘‘(2) COMMISSION
ACTION.—The Commission 
shall initiate a single proceeding to consider the rec-
ommendations from the Joint Board required by 
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paragraph (1) and shall complete such proceeding 
within 18 months after the date of enactment of the 
Universal Service Reform Act of 2007. The rules es-
tablished by such proceeding shall include a defini-
tion of the services that are supported by Federal 
universal service support mechanisms and a specific 
timetable for implementation. 
‘‘(b) UNIVERSAL SERVICE PRINCIPLES.—The Joint 
Board and the Commission shall base policies for the pres-
ervation and advancement of universal service on the fol-
lowing principles: 
‘‘(1) QUALITY
AND
RATES.—Quality services 
should be available at just, reasonable, and afford-
able rates. 
‘‘(2) ACCESS TO ADVANCED SERVICES.—Access 
to advanced telecommunications and information 
services should be provided in all regions of the Na-
tion. 
‘‘(3) ACCESS
IN
RURAL
AND
HIGH
COST 
AREAS.—Consumers in all regions of the Nation, in-
cluding low-income consumers and those in rural, in-
sular, and high cost areas, should have access to the 
services the Commission determines to be universal 
services in accordance with subsection (c), including 
interexchange services and advanced telecommuni-
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cations and information services, that are reasonably 
comparable to those services provided in urban areas 
and that are available at rates that are reasonably 
comparable to rates charged for similar services in 
urban areas. 
‘‘(4) EQUITABLE
AND
NONDISCRIMINATORY 
CONTRIBUTIONS.—All communications service pro-
viders should make equitable and nondiscriminatory 
contributions to the preservation and advancement 
of universal service. 
‘‘(5) EXPLICIT, SPECIFIC, AND
PREDICTABLE 
SUPPORT MECHANISMS.—There should be explicit, 
specific, predictable, and sufficient Federal and 
State mechanisms to preserve and advance universal 
service. 
‘‘(6) COMPETITIVE NEUTRALITY.—Federal and 
State mechanisms to preserve and advance universal 
service should be competitively neutral, so that those 
mechanisms neither unfairly advantage nor dis-
advantage one communications service provider over 
another, and neither unfairly favor nor disfavor one 
technology over another. 
‘‘(7) ACCESS
TO
ADVANCED
TELECOMMUNI-
CATIONS
SERVICES
FOR
SCHOOLS, HEALTH
CARE, 
AND LIBRARIES.—Elementary and secondary schools 
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and classrooms, health care providers, and libraries 
should have access to advanced telecommunications 
services as described in subsection (h). 
‘‘(8) ADDITIONAL
PRINCIPLES.—Such other 
principles as the Joint Board and the Commission 
determine are necessary and appropriate for the pro-
tection of the public interest, convenience, and ne-
cessity and are consistent with this Act. 
‘‘(c) DEFINITION.— 
‘‘(1) IN GENERAL.—Universal service includes 
the services defined on the date of enactment of the 
Universal Service Reform Act of 2007 as universal 
services, as modified by the Commission as nec-
essary to implement the provisions of this Act, high- 
speed broadband services, and an evolving level of 
telecommunications and information services that 
the Commission shall establish periodically under 
this section, taking into account advances in tele-
communications and information technologies and 
services. The Joint Board in recommending, and the 
Commission in establishing, the definition of the 
services that are supported by Federal universal 
service support mechanisms shall consider the extent 
to which such services— 
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‘‘(A) are essential to education, public 
health, or public safety; 
‘‘(B) are being deployed in public tele-
communications networks by communications 
service providers; and 
‘‘(C) are consistent with the public inter-
est, convenience, and necessity. 
‘‘(2) ALTERATIONS AND MODIFICATIONS.—The 
Joint Board shall consider whether to recommend to 
the Commission modifications in the definition of 
the services that are supported by Federal universal 
service support mechanisms no less than once every 
5 years. 
‘‘(3) SPECIAL
SERVICES.—In addition to the 
services included in the definition of universal serv-
ice under paragraph (1), the Commission may des-
ignate additional services for such support mecha-
nisms for schools, libraries, and health care pro-
viders for the purposes of subsection (h). 
‘‘(4) HIGH-SPEED BROADBAND SERVICE.—The 
definition of universal service shall not be construed 
to exclude eligible communications service providers 
from using universal service funding for the provi-
sion, maintenance, and upgrading of high-speed 
broadband service. 
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‘‘(d) UNIVERSAL
SERVICE
SUPPORT
CONTRIBU-
TIONS.— 
‘‘(1) CALCULATING UNIVERSAL SERVICE SUP-
PORT CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—To preserve and ad-
vance universal service in accordance with the 
principles in section (b), the Commission shall 
assess contributions to universal service support 
mechanisms from communications service pro-
viders in a manner that is equitable, competi-
tively neutral, and nondiscriminatory, and en-
sures that communications service providers are 
subject to similar obligations. The Commission 
may employ any methodology to assess such 
contributions, including consideration of— 
‘‘(i) revenues derived from the provi-
sion of intrastate, interstate, and foreign 
communications services by communica-
tions service providers; 
‘‘(ii) working telephone numbers used 
by communications service providers; or 
‘‘(iii) any other current or successor 
identifier protocols or connections to the 
network used by communications service 
providers. 
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‘‘(B) USE OF MORE THAN ONE METHOD-
OLOGY.—If no one methodology designated 
under subparagraph (A) effectuates the prin-
ciples described in this Act, the Commission 
may employ a combination of any such meth-
odologies. 
‘‘(C) 
LOW
VOLUME
EXCEPTION.—The 
Commission shall not materially increase the 
contributions of communications service pro-
viders whose customers typically make a low 
volume of calls on a monthly basis. 
‘‘(D) DE MINIMIS EXCEPTION.—The Com-
mission may exempt a communications service 
provider from the requirements of this sub-
section if the communications activities of such 
provider are limited to such an extent that the 
level of contributions of such provider to the 
preservation and advancement of universal serv-
ice would be de minimis. 
‘‘(E) GROUP
PLAN
EXCEPTION.—If the 
Commission uses a methodology under subpara-
graph (A) based in whole or in part on working 
telephone numbers, it may provide a discount 
for additional numbers provided under a group 
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or family pricing plan for residential customers 
provided in one bill. 
‘‘(2) REPORTS.—The Commission shall estab-
lish annual reporting requirements for all commu-
nications service providers contributing to universal 
service support mechanisms or receiving universal 
service support. The reporting requirements shall 
not impose unnecessary burdens, and shall be tech-
nology and provider neutral. The Commission shall 
periodically review the reporting requirements to en-
sure that universal service support is used for the 
provision, maintenance, and upgrading of the facili-
ties for which support is intended. 
‘‘(3) UNIVERSAL SERVICE SUPPORT CONTRIBU-
TION LIMITS.— 
‘‘(A) LIMITATION.—The total amount of 
universal service support for all universal serv-
ice support mechanisms other than support for 
schools, libraries, rural health care, life-line, 
link-up, and toll limitation shall not exceed the 
total amount that was collected from all sources 
for all universal service support mechanisms 
other than schools, libraries, rural health care, 
life-line, link-up, and toll limitation in the last 
year prior to the date of enactment of the Uni-
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versal Service Reform Act of 2007, as ad-
justed— 
‘‘(i) annually by a growth factor; and 
‘‘(ii) once, within one year of the date 
of enactment of the Universal Service Re-
form Act of 2007, by the amounts that the 
adjustments in subsections (e)(3) and (m) 
increase demand for universal service sup-
port. 
‘‘(B) GROWTH FACTOR.—The growth fac-
tor shall be the annual percentage change in 
the Gross Domestic Product–Chained Price 
Index (GDP–CPI), or any successor general in-
flationary factor that the Bureau of Economic 
Analysis of the Department of Commerce deter-
mines shall supersede such index, plus the an-
nual percentage change in the total number of 
incumbent local exchange carrier working loops 
in rural, insular, and high cost areas, if that 
percentage change is greater than zero. 
‘‘(C) INTERCARRIER
COMPENSATION
RE-
COVERY MECHANISM.—If at any time after the 
date of enactment of the Universal Service Re-
form Act of 2007 the Commission mandates 
that intercarrier compensation revenues be re-
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covered through an alternative revenue recovery 
mechanism, such alternative revenue recovery 
mechanism shall be included in the limitation 
set forth in subparagraph (A), and the Commis-
sion shall adjust such limitation by the amount 
that such alternated revenue recovery mecha-
nism increases demand for universal service 
support. 
‘‘(e) DISTRIBUTION AND USE OF UNIVERSAL SERV-
ICE SUPPORT.— 
‘‘(1) IN
GENERAL.—Only an eligible tele-
communications carrier designated under section 
214(e) shall be eligible to receive specific Federal 
universal service support. A carrier that receives 
such support shall use that support only for the pro-
vision, maintenance, and upgrading of facilities and 
facilities-based services for which the support is in-
tended. Any such support should be explicit and suf-
ficient to achieve the purposes of this section. 
‘‘(2) USES OF UNIVERSAL SERVICE SUPPORT.— 
The use of universal service support for all rural, in-
sular, and high cost areas— 
‘‘(A) should be expanded to include high- 
speed broadband services; 
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‘‘(B) should be based on actual costs rea-
sonably incurred in providing such facilities- 
based services in a service area, exclusive of the 
cost of acquiring spectrum, except that an eligi-
ble telecommunications carrier that is an in-
cumbent local exchange carrier may elect to 
have the Commission calculate the amount of 
universal service support payable to such car-
rier pursuant to section 54.309 of title 47, Code 
of Federal Regulations (as in effect on the date 
of the enactment of the Universal Service Re-
form Act of 2007); and 
‘‘(C) should be available to communica-
tions service providers that are determined to 
be eligible telecommunications carriers under 
section 214(e). 
‘‘(3) SUPPORT FOR NON-RURAL CARRIERS PRO-
VIDING
SERVICE
IN
RURAL, INSULAR, AND
HIGH 
COST AREAS.— 
‘‘(A) 
CALCULATING
SUPPORT.—Except 
with respect to non-rural carriers serving insu-
lar areas, in calculating the need for and dis-
tribution of Federal universal service support 
for eligible telecommunications carriers that 
serve rural, insular, and high cost areas and 
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that are either non-rural carriers, or (after a 
one-time election) rural carriers subject to Fed-
eral incentive regulation, the Commission shall 
revise the Commission’s support mechanism for 
rural, insular, and high cost areas to provide 
support to each wire center to the extent the in-
cumbent local exchange carrier’s average for-
ward-looking cost per line for such wire center 
exceeds 2.75 times the national average cost per 
line. 
‘‘(B) HOLD HARMLESS.—In implementing 
this paragraph, the Commission shall ensure 
that no non-rural carrier receives less Federal 
support calculated under paragraph (1) than 
the non-rural carrier would have received under 
the Commission’s support mechanism for rural, 
insular, and high cost areas as in effect on the 
day before the date of the enactment of the 
Universal Service Reform Act of 2007. 
‘‘(4) 
ADMINISTRATION: 
ACCOUNTABILITY 
STANDARDS.— 
‘‘(A) NETWORK TRAFFIC IDENTIFICATION 
ACCOUNTABILITY STANDARDS.— 
‘‘(i) NETWORK TRAFFIC IDENTIFICA-
TION
STANDARDS.—A 
communications 
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service provider shall ensure, to the degree 
technically possible, that all traffic that 
originates on its network contains, or, in 
the case of non-originated traffic, pre-
serves, sufficient information in call sig-
naling to allow for traffic identification by 
other communications service providers 
that transport or terminate such traffic, 
including telephone number information of 
the calling and called parties and such 
other information as the Commission 
deems appropriate. Except as otherwise 
permitted by the Commission, to the de-
gree technically possible, a communications 
service provider that transports traffic be-
tween communications service providers 
shall signal-forward without altering call 
signaling information it receives from an-
other communications service provider. 
‘‘(ii) NETWORK TRAFFIC IDENTIFICA-
TION RULEMAKING.—The Commission, in 
consultation with the State commissions, 
shall initiate a single rulemaking no later 
than 180 days after the date of enactment 
of the Universal Service Reform Act of 
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