Universal service support for rural wireless firms has grown ‘dra...
Universal service support for rural wireless firms has grown “dramatically” the past year and soon will exceed $1 billion, McLean & Brown consultants said. At the same time, support for incumbent wireline telephone companies has been “essentially constant” since…
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2002, said the paper, an update of a March 2005 report by the Phoenix-based firm. The paper said incumbents face more than 6 wireless competitors in some rural areas, a further indication today’s fund distribution process for competitive carriers “is still fatally flawed and must be fundamentally reformed.” The paper said 58% of “study areas” set up for Universal Service Fund (USF) funding purposes have 2 or more wireless competitors and 29% have 3 or more. The report was financed internally, not commissioned by clients, said consultant Glenn Brown. It was praised by the Coalition to Keep America Connected, made up of incumbent telecom companies. “The paper notes that without fundamental reform of the portion of the program that subsidizes wireless [carriers], the entire fund is at risk,” the coalition said in a release. The paper said the FCC could ease the situation by: (1) Fixing the USF collection mechanism. (2) Limiting some rural areas to “just one carrier of last resort” eligible for USF support. “Not all areas can sustain multiple carriers without massively inefficient support,” the paper said. (3) Establishing separate funding mechanisms for wireline and wireless carriers. For most consumers, they are complementary products. (4) Reforming intercarrier compensation.