USTA REVEALS NEW UNIVERSAL SERVICE PLATFORM

McCormick said the USTA was “delighted” that the FCC was moving forward on several pending universal service proceedings but some problems facing the system could be solved only through legislation. “I don’t think the FCC can do it all on its own,” he said. “It may require some congressional action.” In answer to a question, McCormick said USTA hadn’t proposed any specific legislation on the Hill but at this early stage would push the concepts as it talked with people about universal service. A good first step is the Senate Commerce Committee’s hearing next week on universal service, he said.

Many of USTA’s principles appeared to reflect rural telcos’ concern that changes in technology could reduce the amount of money in the universal service fund [USF] just as new competitors arrived who also were eligible to draw from the fund. “The universal service system is in jeopardy,” faced with such changes as the migration of voice traffic to technologies such as voice-over-IP, the “subsidization” of rural competitors and the growing number of service offerings drawing from the fund, McCormick said. The increasing in competitors granted eligibility to draw from the USF could “balloon costs,” he said: “Universal service should get back to its roots.”

Coming up with the principles wasn’t an easy task for USTA members “not so much because of differing objectives but differing priorities,” McCormick said. Among other things, differences emerged based on varying stages of competition facing members and what part of the country they served, he said. Of 45 board members, only one voted against the platform, he said, declining to reveal the dissenting member’s name or company.

The principles are: (1) Universal service support should be provided on a network basis, rather than being allotted per loop or for specific services as is done now. If support were allocated to carriers’ networks, companies would have the freedom to add services, such as broadband capability, USTA said: “This way, support does not come at the cost of innovation.”

(2) There should be a more “rigorous” standard for determining whether carriers were eligible for universal service payments. Carriers deemed eligible telecom carriers (ETCs) should meet the same standards no matter what technology they used, USTA said. That includes “ubiquitous service that is comparable in quality and diversity to other parts of the country” and “highly reliable service that meets both public safety and national security needs.”

(3) States that “want to support multiple carriers in the same high-cost area” should be required to “cover the added expense” in some way “so their decision does not destabilize the [universal service] fund.” (4) There should be a “far wider pool of contributors” including the “entire communications market, interstate and intrastate, products and services, voice and data across all platforms.” (5) There should be “a revenue-neutral rate rebalancing” of rural phone bills. The idea would be to reduce intrastate access charges and the resulting toll charges with “vastly larger toll-free calling areas.”

McCormick said meetings with other industry organizations had turned up consensus there as well on reforming universal service. After several weeks of meetings, USTA, OPASTCO, NTCA and others had agreed on 8 issues, he said: (1) Changes must be made to “ensure sustainability” of the USF. (2) The base of contributors must be broadened. (3) Entry by competitive ETCs must be subject “to a stricter public interest test.” (4) The purpose of universal service should be to “ensure reasonably comparable rates, not to promote competition.” (5) Rate-of- return carriers should be able to recover the investment they made in their entire network. (6) The universal service system “must continue to be based upon cost recovery.” (7) Rural customers should have affordable services that were comparable with the quality of services in urban areas. (8) Carriers receiving support under the USF “should be subject to equal obligations.”