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USTelecom Warns Negotiators to Scrap Deficit Reduction Proposal

Phone lobby USTelecom Thursday warned budget negotiators that they should scrap a proposal to divert $1 billion in Universal Service Fund contributions to deficit reduction.

According to USTelecom, that proposal was included in budget negotiations led by Vice President Joe Biden.

In a letter to the President, Vice President and congressional leaders, USTelecom spelled out the ways it thought that proposal was a nonstarter.

Those included that it would impose a new tax on consumers monthly bills. Ironically, one of the big issues in Congress this past week was cramming, the appearance of unwanted additional charges on phone bills, for which the government was chastising phone companies.

UsTelecom points out the USF money is meant to go toward subsidizing phone service, and with FCC-spearheaded reform, the broadband buildout the president and VP have been promoting. Diverting the funds, the group argues, would be "a dramatic departure from one of the Nation's highest priorities - the deployment and adoption of broadband service throughout the United States, including rural areas that are hardest and most expensive to reach."