The Universal Service Fund: it's central. It gets federally required payments from providers of telecommunications services and allocates those monies to local providers who serve high-cost areas, low-income households, libraries, schools, and rural health care providers.
The fund is administered by an independent nonprofit corporation (the Universal Service Administrative Company), which is regulated by the FCC. An enormous amount of money flows through USAC's books and out to the states: $7.3 billion estimated for 2006.
In 2005, $158 million went [pdf] to Alaska, Stevens's home state; $131 million to Arizona (McCain); $83 million to Montana (Burns); $242 million to Mississippi (Lott); $576 million to Texas (Hutchinson)...(all members of the Senate Commerce Committee).
As traditional telecommunications carriers (the Bells) lose revenue to VoIP providers, the amounts they'll be able to shuffle to the states and to gravy-train rural carriers will continue to diminish. (This is a very complicated story, full of cross-subsidies and hidden incentives, so forgive me if in telling it simply I'm missing something key.) It's generally accepted that the Universal Service Fund mechanism is broken and isn't necessarily serving the people it was designed to serve. But that's not the important thing from a political perspective.
The important thing from a political perspective is that the money has to continue to flow. So it has to come from somewhere.
The Stevens draft bill says clearly that new actors will need to contribute to USF funds: all broadband service providers (including municipal providers of anything faster than 200 kbps, and cable broadband providers) and all IP-enabled voice service providers.
Who's an "IP-enabled voice service" provider? Answer: anyone who makes real-time 2-way voice communications available to the public, whether for free or not, as long as the service is capable of connection (both ways) to the traditional phone network.
This definition includes Skype, Yahoo! Messenger, and any gaming software that allows connection to traditional phones.
Every service in this category will be assessed USF fees. The bill doesn't say how much. But it does say that the FCC can base contributions on "revenue from communications service" -- in other words, if Skype is successful, the USF should benefit too!
(This is reminiscent of the Nokia director who was assessed $100,000 for a speeding ticket. Finns do everything very fairly.)
Other bases for collection under the bill are "working phone numbers or any other identifier protocol or connection to the networks" (IP address blocks held? number of cable connections?), or "network capacity" (successful muni wi-fi or cable network?).
It will be very hard for legislators to ignore the possibility of an enormous revenue-save for a vital piece of pork within their districts. The moral arguments in favor of USF are strong. Explaining how broken the program is takes more than one sentence.
This will be a tough one. To the extent network neutrality (which also takes more than one sentence to explain) might scuttle a bill that secures this new source of funds, legislators will likely follow the money and scuttle network neutrality instead.