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December 05. 2013 12:49AM

Ayotte praised over attempt to change broadband funding

MANCHESTER — Representatives from the telecommunications industry, the state's economic development office and the N.H. High-Tech Council on Wednesday commended efforts by U.S. Sen. Kelly Ayotte, R-N.H., to change the formula used to distribute federal funds for broadband expansion, calling it a matter of economic fairness and necessity.

Ayotte hosted the information session at her Manchester field office on Elm Street to discuss problems with broadband expansion in the state and the introduction of Senate Bill 1766, "to provide for the equitable distribution of Universal Service funds to rural states."

The legislation would change the formula used to distribute money from the Federal Communication Commission's Connect America Fund, which is financed through a 15.5-percent surcharge that appears as "universal service access charge" on telephone bills.

Ayotte's legislation would ensure that a rural state is guaranteed at least 75 cents for every dollar it contributes, without increasing the size of the fund, and would create a definition of "rural state" as a state in which the population density is not more than 200 people per square mile. Population density in New Hampshire is 147 residents per square mile.

In 2011, the most recent year for which statistics are available, New Hampshire ratepayers contributed $37.9 million to Connect America Fund, but received only $14.2 million through the program — a nearly $24 million shortfall.

The state ranks 46th out of 50 states (and 50th out of 56 when factoring in the District of Columbia and territories) when comparing return on each dollar contributed.

"I know we could do so much more if we got a better return on our investment in the universal service fund," Ayotte told the group. "Imagine what we could do with another $24 million in terms of helping people in New Hampshire have better access to high-speed Internet."

The fund, established in 1996, was at first aimed at telephone service, but has since been used to accelerate broadband build-out to the 18 million Americans living in rural areas who lack access to high-speed Internet service. New Hampshire apparently was not considered very "rural" under the existing criteria, since it was grouped in the bottom tier of recipients with states like New Jersey, Connecticut, Massachusetts and Delaware in 2011 results.

Ayotte's proposal would move New Hampshire into a more rural classification, and simplify the formula for distributing the fund. There are four separate programs within USF and dozens of formulas for how the money is distributed.

"There is currently no single formula for how USF dollars are distributed," said an Ayotte spokesperson. "It's a bureaucratic maze. The program needs to be reformed so that areas that are most in need — such as New Hampshire — receive commensurate support."

The bill is likely to face opposition from senators whose states now collect three to four times what they contribute. If it becomes law, the Federal Communications Commission would still have to draft regulations to implement the 75 percent minimum return to each state.

Even though 96 percent of the households in New Hampshire have access to high-speed Internet, there are many gaps in rural sections of the state, said Chris Way, interim director of economic development at the Department of Resources and Economic Development.

"Every community has some pockets," he said, "but some have more than others."

The gaps are particularly severe in much of Coos County, northern Grafton Country, in southwestern portions of the state and in the Lakes Region, according to Carol Miller, DRED Director of Broadband Technology.

"From an economic development perspective, this is an equity issue, in that having access to high-speed, broadband technology is no longer a wishful thing," said Way. "It's a necessity for companies to come here, or for companies that are here, to grow."

dsolomon@unionleader.com