FCC SEEKS COMMENTS ON MAG PLAN FOR RURAL CARRIERS
FCC asked Fri. whether it should adopt access charge reform plan for rural carriers in its entirety, as proposed by Multi- Assn. Group (MAG), or whether certain parts should be adopted or incorporated into other proceedings. Plan was developed by coalition of groups representing rural telcos -- National Telephone Cooperative Assn., National Rural Telecom Assn., OPASTCO, USTA. Comments will be due 30 days from publication in Federal Register, with replies due 15 days later. Federal Register publication generally occurs within days after item is released by FCC.
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MAG plan offers rural telcos package of access charge- universal service reforms, similar to that developed by CALLS coalition last year for larger, price-cap companies. It would encourage rural ILECs to move from rate-of-return regulation toward form of regulation that would give them incentive to lower access charges. It also would raise subscriber line charge paid by customers but was expected to lower long distance rates. Per- min. access charges would be reduced but long distance companies would be encouraged to continue geographically averaging their rates.
In notice of proposed rulemaking issued Fri., FCC also asked about impact of MAG plan on other proceedings under way at Commission, process it should use to evaluate plan, how to address concerns expressed by rural companies that aren’t MAG members.
Agency asked far more questions on specifics of plan: (1) On access reform, FCC questioned whether plan’s access rate structure was appropriate for non-price cap companies because some aspects of it were patterned after CALLS reform plan. Agency also wanted to know whether those access reforms were “likely to achieve the competitive and consumer benefits anticipated by the MAG members.” Commission questioned proposal to give carriers choice of 2 regulatory regimes or “paths.” It asked whether 2-path scheme was “necessary to accommodate diversity among non-price cap carriers” and whether it would cause too much complexity.
(2) On universal service portions of plan, FCC said that unlike CALLS plan, MAG plan didn’t place ceiling on proposed new access subsidy, called rate averaging support (RAS). Agency asked how RAS support levels would change over time and “what impact will such increases have on consumers?” (3) On plan’s “incentive- based approach,” FCC asked whether it would “create appropriate economic incentives for operating efficiency and investment” and whether it would encourage long-term investment. Agency also wanted to know whether MAG’s incentive-based approach would “increase non-price cap carrier revenues.”
(4) On deployment of advanced services to rural areas, MAG supporters said plan would promote such services and FCC asked for comment on validity of that premise. It said it wanted views on argument that current regime of “universal service funding caps and regulatory uncertainty have diminished non-price cap carriers’ incentives to invest in new technologies.” And, FCC said, if that’s so, is MAG plan best way to turn that around and promote technology deployment?
(5) On proposed changes in FCC’s merger & acquisition rules, designed to make it easier for rural carriers to purchase exchanges from larger carriers or to merge with them, agency questioned whether they were warranted. Plan would eliminate “all or nothing rule” by letting carriers retain non-price cap status when they become affiliated with price-cap carriers or acquire lines. It also would end requirement that small carrier’s study area be frozen at current size even when it merges or acquires lines. Agency asked whether there were alternative ways to address rural carriers’ concerns about limits on universal service support that “discourage non-price cap companies in rural areas from acquiring and upgrading telephone exchanges.” (6) On “proposed pricing rules… that would be applicable to IXCs,” it questioned MAG plan’s proposal to bar long distance companies from imposing minimum monthly charges.