$340 Million Fund Rejected by PSC

April 10, 2001

Columbia, SC– On Tuesday, the Public Service Commission voted to create a $36-$40 million universal service fund for the purpose of formally subsidizing telephone service to rural areas of the state. Another purpose of this fund was to promote the competition for local telephone service.

The S.C. Small Business Chamber of Commerce voiced its opposition last year to a proposed $340 million universal service fund. The small business advocacy group characterized the proposed amount, which could have increased the cost per line by 10 to 15 percent for small businesses, as unjustified, a severe economic hardship on small businesses and unlikely to spur competition for small business telephone service. In a letter submitted to the PSC prior to its meeting on Tuesday, the group restated its opposition to a $340 million fund but said that a $36 million would be acceptable with some safeguards against unwarranted expansion.

After Tuesday’s PSC decision, Frank Knapp, executive director of the Small Business Chamber, claimed victory for small businesses. “Nine months ago we were on the verge of creating a $340 million monster fund,” said Knapp. “Today we will have a fund one tenth in size. We will have to wait to see if this new fund will be good or bad for small businesses but at least we have dramatically reduced any potential downside for this vital sector of our economy.”

The Small Business Chamber was the only non-communications business organization to take an active stance against the earlier proposal. “We are proud to have been the only general business organization to have taken a strong public position to protect the small businesses of this state,” said Knapp.

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