By Joelle Tessler
ASSOCIATED PRESSJuly 28, 2008
WASHINGTON – A powerful Democratic lawmaker is asking two dozen telecommunications companies, including Verizon Communications Inc. and AT&T Corp., to account for billions in federal subsidies they receive to provide telephone service in underserved communities.
Henry Waxman, chairman of the House Oversight and Government Reform Committee, on Monday sent letters to 24 companies seeking information about how much money they receive from the Universal Service Fund's high cost program and how they spend it. The program, which is funded through a surcharge on long-distance bills, helps underwrite the cost of phone service in rural areas and other places where telecom companies otherwise might not build networks.
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On one side, the funding base that pays for universal service is shrinking as e-mail, cell phones and Internet calling plans replace traditional landline service. Still, the program continues to balloon as more wireless providers and other carriers qualify for funding and as policymakers debate whether to use USF money to pay for high-speed Internet access in addition to phone service.
Critics of the program also insist that it is plagued with waste, fraud and abuse.