Joint Board USF Plan by Early November, Chairman Says
SAN FRANCISCO -- The joint board on universal service will send the FCC broad proposals by early November for a total revamp, one board chairman said. Elements will include killing the equal-support rule and adding limited eligibility for broadband and wireless, said Ray Baum, state chairman of the Federal-State Joint Board on Universal Service. He spoke late Monday at the National Exchange Carrier Association Expo. Baum, also a member of Oregon’s Public Utilities Commission, told us later that the board had made good progress in a Monday weekly conference call, but wouldn’t elaborate on the recommendations.
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On intercarrier compensation, Baum said, the FCC may act this year on phantom traffic and moving to contributions based on phone numbers or number connections. Doug Garrett, a Cox regional vice president for government affairs, agreed that these parts of the problem are natural first targets for the commission. If the FCC doesn’t move by June 2008, action will be problematic for months due to campaign politics and post- election churn among officials, Baum said. The Missoula Plan on compensation has been “sitting on the shelf” at the FCC as the agency has been “heavily diverted toward other issues,” Baum said.
Google will bid in the 700 MHz auction to ensure that “the Internet will become fully mobile” and to capitalize on its YouTube investment, Garrett said. “The whole idea” of auctioning the spectrum is “to get Google in the game of providing broadband” in competition with cable and incumbent telcos, Baum said. “As a consumer, I think that’s a good thing.” Concerning net neutrality, “the FCC should walk softly and carry a big stick” to handle any discrimination problems that arise, he said.
NECA Chairman Robert Eddy of Sherbourne Tele-Systems spoke in fiery terms from the floor, characterizing phantom traffic as theft from terminating carriers. Letting them cut off traffic from offending telcos would bring a prompt end to the problem, he said. Garrett agreed, in more moderate words. But the FCC requires carriers “to complete the call,” Baum said. “It’s called the obligation to interconnect. You've got to either have the FCC change the rule, and we have a chaotic period,” or create a policy directly attacking phantom traffic, he said.
The joint board hopes to complete its universal service recommendations by Nov. 1, a goal that could slip a few days, Baum said. The board is 75 percent through the issues, he said. Baum told us that once the FCC receives the proposal, under federal law it will have a year to deal with them.
“We may not get consensus on the details,” but on “broad strokes” the board has a good chance of agreement, Baum said. It “won’t delve into all the implementation” but will call for “fundamental changes in the way the money is spent, especially in wireless and broadband,” he said. The plan will aim for “focused and targeted” spending to get broadband and wireless to unserved places, Baum said. It will suggest eliminating the equal support rule for competitive eligible telecommunications carriers, he said. Rural carriers will be expected to carry on as they have, Baum said. Garrett said his company isn’t wedded to the equal-support rule but wants it killed only as part of a broad overhaul of the system.
Garrett would support “a carefully designed reverse auction mechanism” for universal service, he said. “I don’t pretend to have the design worked out,” he said. Eventually, the winner- take-all system could be changed with a ceiling for support, Garrett said. But Tom Conry, general manager of Farmers Mutual Cooperative of Harlan, Iowa, said “the premises of universal service just don’t seem to work with” a reverse auction. “The auction drive[s] the price to the universal service amount,” he said. “If your sole goal is to limit the amount of dollars, that’s what a reverse auction would do.”