Regulators Recommend Capping USF Subsidies
A group of federal and state regulators has urged capping subsidies to rural telecom providers to slow booming Universal Service Fund growth. At our deadline, the Federal- State Joint Board on Universal Service recommended that the FCC impose an interim “emergency” cap on high-cost support that “competitive eligible telecom carriers” can receive in each state, based on the average amount of CETC support distributed in each state in 2006. CETCs generally are wireless providers.
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The cap seemed to be the only controversial part of the recommendation, with other issues to be decided after the board gets comments on: (1) Using reverse auctions to set high-cost support. (2) Using “geographic information systems technology and network cost modeling” to target support at more granular levels. (3) “Disaggregating” support below the study area or wire center level. (4) Calculating support for CETCs. (5) Using universal service funding for broadband deployment.
The Joint Board will make more complete recommendations within 6 months, it said, recommending that the FCC act on the more complete version within a year of getting it. FCC Comr. Copps dissented in the decision; W.Va. Consumer Advocate Billy Jack Gregg and Ore. PUC Comr. Ray Baum concurred. The rest of the board voted for the decision, including FCC Chmn. Martin, FCC Comr. Tate, Fla. PSC Chmn. Lisa Edgar, Ind. Utility Regulatory Comr. Larry Landis and Vt. Public Service Board Comr. John Burke.
Copps said he had “serious concerns” that the cap will be “misinterpreted as a solution” and as a result more comprehensive reforms won’t be made. “We don’t have the luxury of time to get this right,” he said. “That is why I believe today’s recommendation misses the mark -- it puts too many issues off to another day.”
Meanwhile, NARUC Pres. James Kerr said a wireless cap wouldn’t be a good idea since rural residents want alternative technologies. In a letter sent Tues. to joint board leadership, Kerr said rural consumers want “state-of- the-art services” including broadband and wireless. Kerr was writing as an individual, not as an N.C. Utilities Commission member, he said: “Rural consumers want and deserve access to the mobility and safety benefits that only wireless provides. I urge you to consider reforms that are fair and equitable to all providers without regard to the underlying technology.” The letter went to FCC Comr. Tate and Ore. PUC Chmn. Ray Baum, who co-chair the joint board.