WESTERN WIRELESS TO GET IN LINE TO PURSUE USF BROADBAND FUNDS
On the eve of a critical filing deadline on USF distribution issues, Western Wireless Chmn. John Stanton said that if the fund is expanded to pay for rural broadband rollout, wireless carriers will be in line for funds. The remarks came as NTCA and OPASTCO released a report heavily critical of the carrier’s pursuit of USF funding.
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!
During a call with analysts late Wed. discussing the company’s quarterly financial results, Stanton conceded that USF discussions have been contentious. He acknowledged that Congress, especially members of the Senate from rural states, have weighed in strongly on the issue. Stanton said Western Wireless wouldn’t take sides. “We are essentially neutral on the political issue,” he said. “A big part of broadband delay in rural areas is the absence of those subsidiaries… My statement was intended to convey that if there is universal service for broadband we will participate in that in the same way we have participated in universal service for voice.”
Stanton also argued that rural carriers like Western Wireless are well suited to capture part of the wireless broadband market as it grows. “There’s been a lot of fanfare in the national press about new carriers trying to take that [broadband] market and most of them have been focused on rural areas but don’t have any assets in rural areas,” Stanton said. “We've got almost 1.4 million customers. We've got 1,400 sites. We've got 2,400 people who are focused on the needs of rural customers.”
Stanton said if USF is used to pay for broadband rollout, “we can obviously do more and do it faster.” Western Wireless has been rapidly expanding its broadband wireless network, as highlighted by the company’s Cellular One subsidiary’s June completion of the expansion of its CDMA 1X network in Ark., Nev. and Tex.
Meanwhile, NTCA and OPASTCO filed an ex parte with the FCC criticizing the Feb. 2004 paper submitted by Western Wireless on “How Rate of Return Regulation Transformed the Universal Service Fund for Consumers into Corporate Welfare for the Rural Local Exchange Carriers.” They said the paper, written by Economics & Technology (ETI,) was “fundamentally flawed” because it was based on “false premises” -- including that overhead costs shouldn’t vary much except according to network size -- and resulted in “false conclusions” -- including that universal service policy would be improved by eliminating rate-of-return regulation. “Rate-of-return regulation is a red herring,” the associations said: “Western Wireless’ purpose is to divert attention from the real growth of the USF -- the CETCs” (competitive eligible telecommunications carriers).
“Escalating fund growth is a result of the fact that wireless [CETCs] are receiving support without demonstrating their actual costs,” the associations said. The paper written by economist Dale Lehman of Alaska Pacific U. concluded that: (1) “The growth rate of support received by CETCs was actually far more alarming than the growth rate in ILEC support.” It said ETI had drawn “an erroneous picture of the growth of the USF by failing to represent the significant shift from implicit to explicit support and by providing a flawed analysis of explicit USF mechanisms.”