McDowell Questions Need for Interim Cap on USF Subsidies
FCC Commissioner Robert McDowell on Thursday questioned the need to vote for a proposal to put an interim cap on Universal Service Fund subsidies for competitive telecom companies. The commission already may have acted by default on the interim measure in setting caps as a condition to its approvals this year of several acquisitions, McDowell told reporters at a press event. “The same goal may already have been accomplished,” he said. It might make more sense to move directly to long- term USF reform, he told reporters. Asked if his comments indicate he would vote no on the interim cap, McDowell said, “the question is have we already voted?”
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Voting piecemeal as part of acquisition reviews isn’t the best way to change policy but it’s occurring and is affecting the interim plan, he said. Enough rural wireless providers have had USF support capped or frozen during such reviews to ease concern about USF growth, he said. “Does that moot voting on an interim plan?” McDowell said. Acquisitions capped as a condition of FCC approval involved some of the biggest rural operators: November’s AT&T-Dobson merger, Alltel’s purchase by TPG Capital and Goldman Sachs Capital in late October and the Verizon Wireless-Rural Cellular transaction in July.
Policymaking via mergers goes only so far, a wireline industry official said. Without a specific rule, “carriers will figure out” how to bypass the cap because USF funding is part of their business plans, the lobbyist said. Wireless carriers may have agreed to these merger conditions, but they still are “making noises on the Hill, saying it’s not fair, keeping the buzz alive.”
The interim cap on competitive rural providers, many of them wireless, was proposed in May by the Federal-State Joint Board on Universal Service. The aim was to stop the rise of USF subsidies while the FCC worked on a more long- term reform plan. The joint board followed up in November with a long-awaited proposal for that long-term reform. McDowell wants to see the broader recommendation “put out for public notice” now, he said. “We've got a full, five- member commission for the remainder of next year. That seems like a good issue for us to try to tackle.”