FCC Should Reassess Wireless Subsidies, Qwest Says
To encourage rural broadband deployment, the FCC should redistribute rural wireless Universal Service Fund (USF) subsidies, Qwest said Wednesday. The Bell filed a plan with the FCC to alter the USF to bring broadband to unserved areas without raising USF fees and surcharges shown on phone bills. The plan would divert money from wireless competitive eligible telecommunications carriers (CETCs) by distributing CETC subsidies per household instead of per connection. About $1 billion of the $4 billion “high-cost” portion of the USF goes to wireless CETCs, but half of wireless customers are on family plans, averaging three lines per household, said Steve Davis, Qwest public policy senior vice president. A per-household system would free funds for use in upping broadband deployment, he said.
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Under the plan, the FCC would disburse grants to all 50 states based on unserved areas as each state defines them. States would hold reverse auctions in which telcos and cable companies would bid to build facilities with speeds and price rates comparable to suburban areas, with states using the USF money to give companies grants. Winning bidders would commit to provide broadband service to an area for ten years under contracts enforced by state regulatory commissions, Qwest said. Unlike standard USF subsidies, grants under this plan would not be “the gift that keeps on giving,” Davis said. Grants would be one-time allocations covering the “real cost of getting facilities out,” but not service. And once the program spurs sufficient broadband deployment it would sunset, Qwest said. If the FCC adopts the proposal by year- end, the first set of grants could go out by fall 2008, said Gary Lytle, federal relations senior vice president.
The USF cap urged by the Federal-State Joint Board on Universal Service is a good starting point, but “doesn’t go far enough,” Davis said. That plan would limit how much taxpayer money wireless carriers get for cellular towers and other gear in rural areas. In meetings Wednesday with FCC officials, Qwest received positive response, Lytle said. Pro-broadband deployment comments by FCC Chairman Kevin Martin at NXTComm last week were also encouraging, he said. Qwest has reviewed the plan with federal and state regulators, as well as “a number of different [telephone and cable] companies,” which also reacted favorably, Davis added. Davis declined to say which companies may back Qwest’s plan. Wireless CETCs getting rural subsidies probably won’t like the plan, Davis said, “but as policy makers we've got to look at [its] overall objectives.”