Small Wireless CETCs Contest USF Interim Cap Order
The Rural Cellular Association formally challenged an FCC interim cap on the Universal Service Fund high-cost program, filing a reconsideration petition over the weekend. The group was expected to file a motion for stay on Monday, but hadn’t at our deadline. The reconsideration petition also was signed by small wireless competitive eligible telecommunications carriers. “The high-cost fund ‘emergency’ alleged by the commission is a farce,” said RCA Executive Director Eric Peterson. “The decision to implement the cap is based on inaccurate facts, false assumptions, flawed legal reasoning and ignores Congressional direction and the principle of competitive neutrality.”
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The five-month USF cap took effect Friday. “There is no empirical evidence to suggest that the imposition of the cap was necessary to avert a crisis that would cripple the USF,” the RCA said: “The Commission’s interim cap cannot stand since it is based entirely on an impermissible construction of the statute.” The FCC order contradicts statutory universal service principles, violates competitive neutrality principles and “flout[s] the local competition mandate” of the 1996 Telecom Act, the RCA said.
Verizon condemned the RCA petition. “Let’s not go backwards,” a spokesman said. “There is broad agreement in favor of the cap. It clears the way for comprehensive reform and ensures that universal service will be there for the people who need it most.” A spokeswoman for the Organization for the Promotion and Advancement of Small Telecommunication Companies, which represents rural incumbent local exchange carriers, declined to comment.
The FCC acted based on wrong predictions, the RCA said. When the Joint Board on Universal Service recommended a cap in early 2007, it predicted the CETC high-cost fund would reach $1.28 billion to $1.56 billion by 2008. The fund only hit $1.18 billion, but the FCC capped it anyway, the RCA said. In the order, the FCC didn’t explain why the board prediction was off base. “Left unaddressed was the issue of whether an emergency, interim cap on CETC high-cost support was still necessary,” the RCA said.
The interim cap goes against competitive neutrality, the RCA said. The FCC “abandoned that principle in favor of ’temporarily prioritizing’ the alleged need to immediately stabilize high-cost support.” To be competitively neutral, the FCC should have ignored the Joint Board recommendation and instead spent the next six months working on comprehensive reform, it said.
Failure by the FCC to respond to “significant comments” by the RCA and the Alliance of Rural CMRS Carriers violated federal notice-and-comment rules, the RCA said. “Subsumed in the right to comment is the expectation that the comment will be considered by the Commission,” it said. Instead, the FCC “simply ignored them and voiced its ‘agreement’ with the Board,” it said.
Sprint Nextel agreed “that the interim cap on wireless carriers is an incomplete and inequitable approach to reforming a highly broken system,” a spokeswoman said. CTIA is reviewing the petition, a spokeswoman said.