DIVIDED JOINT BOARD PROPOSES LIMITING UNIVERSAL SERVICE TO ONE LINE
A federal-state board recommended Fri. that the FCC limit universal service support to one line per customer to make sure the Universal Service Fund (USF) remains solvent. The recommendation by the Federal-State Joint Board on Universal Service drew partial dissents from 3 members. FCC Comr. Adelstein, Mont. PSC Comr. Bob Rowe and Nanette Thompson of the Alaska Regulatory Commission said restricting funds to primary lines “is a well-intentioned effort that will have a deleterious effect on the provision of universal service.” In a joint statement, they said “restricting funding to primary lines is not necessary to control fund growth.”
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The dissenters said they thought the primary line restriction was “inconsistent with Congress’ intent” and “would reduce incentives for deployment of both wireless and wireline networks.” They said they also were “disappointed that the Joint Board cannot yet make progress on how to determine the basis of support… We believe that we have a sufficient record to recommend a policy goal that the amount of universal service support paid to competitive providers should not be based on the incumbent’s costs.”
Comr. Abernathy, on the other hand, said she didn’t know “whether I will ultimately vote to adopt a primary-line restriction of the sort discussed in this recommended decision, but it seems clear that the universal service fund can no longer subsidize an unlimited number of connections provided by an unlimited number of carriers.”
The board also recommended that the FCC adopt “permissive federal guidelines” for states to use when deciding whether to designate competitive carriers as eligible telecom carriers (ETCs), which permits them to receive universal service funding. Adelstein, Rowe and Thompson said they were pleased with this part of the order because it recognized “we must take greater care in examining the public interest to determine the wisdom of multiple ETCs [eligible telecom carriers] in rural, high cost areas.” The board recommended, for example, that the FCC encourage PUCs to analyze public interest considerations. However, it disagreed with those who said it should encourage states to adopt a specific cost-benefit test for public interest determinations. It also recommended that the FCC seek comment on applying the proposed guidelines to competitors already designated ETCs.
Comr. Martin registered a partial dissent on that portion of the order, saying he was “troubled” because the order didn’t go far enough to assure the public interest was taken into consideration. He said the order “fails to provide sufficient guidance or a meaningful public interest test on the process for designating and funding [ETCs] that enter the market in high cost areas to serve rural consumers.” Martin said he was “hesitant to subsidize multiple competitors to serve areas in which costs are prohibitively expensive for even one carrier.”
Martin also said the joint board “should have recommended more immediate steps that the Commission should take to reform the ETC designation process.” For example, he said: “I would have preferred that the Joint Board recommended that the Commission require ETCs to provide the same type and quality of services throughout the same geographic service area as a condition of receiving universal service support. In my view, competitive ETCs seeking universal service support should have the same ‘carrier of last resort’ obligations as incumbent service providers in order to receive universal service support.” In addition, “I would have recommended that the Commission require ETCs to provide equal access,” he said. Comr. Adelstein also indicated concern about the equal access question.
On another issue, the joint board recommended capping high-cost support on a per-line basis in areas served by rural carriers where a competitive carrier has been designated as an ETC. However, the board declined to recommend that the FCC modify the methodology used to calculate support in areas with multiple ETCs, known as the “basis of support.” “Instead, we recommend that the Joint Board and Commission consider possible modifications to the basis of support as part of an overall review of the high- cost support mechanisms for rural and non-rural carriers,” the board said.
The FCC had asked the joint board to consider a variety of issues raised by the growth of competitors seeking USF funding in rural areas and, in general, the rising funding needs. The joint board has 8 members -- 3 from the FCC and 5 from state commissions. The FCC has a year to act on the joint board’s proposal.