Telcos Meet with Obama Transition on Broadband Policy
Rural phone companies met Tuesday with members of the Obama-Biden transition team to discuss proposals for broadband incentives in the economic recovery package, executives said. Verizon, AT&T, Qwest, and USTelecom met with the team last week to offer suggestions, company officials said. Documents from the meetings are starting to make their way to Change.gov, the transition team’s Web site. President-elect Barack Obama has promised to publicize meetings with business representatives, to post summary documents and solicit public commit.
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At our deadline, the only document online was from the Independent Telephone & Telecommunications Alliance, which asked Obama to aim broadband incentives first at unserved areas. The transition team didn’t respond to a request for comment on the meetings and the posting of documents.
Obama transition officials told company representatives it wanted their input on the broadband proposal, said alliance President Curt Stamp. But first on their minds was whether the companies were ready for the Feb. 17 DTV transition, he said. Then the focus turned to broadband proposals, Stamp said.
The alliance suggests that policymakers give direct grants to providers for unserved areas, a strategy it says would provide the biggest economic benefit. Grants should be directed first to private bodies, governments becoming eligible in markets that don’t respond. Speed requirements in high-cost areas should be 1.5 Mbps, the alliance said. Tax credits and expensing rules can help carriers upgrade plant and equipment. The alliance suggested a 100 percent expensing allowance or 50 percent investment tax credit for networks that provide access of at least 1.5 Mbps.
USTelecom asked that government officials “carefully consider” the possible ill-effects of new regulations “on the growth and innovation that robust broadband investment is making possible.” Policymakers should concentrate on ensuring a regulatory system that encourages investment, deals with barriers to broadband adoption such as access to computers, maintain parity among competing broadband providers and target efforts toward high-cost, underserved areas, the group said. Transition team officials indicated that they may seek funding for the broadband mapping bill (S- 1492) that Congress passed in October, an industry official said.
Rural carriers told transition officials that FCC proposals to reform universal service and intercarrier compensation could create uncertainty for their industry. “The wrong decisions could curtail future investment in rural communities, as well as put rural carriers’ ability to repay debt in jeopardy,” said the National Telecommunications Cooperative Association. Carriers need to know that if they commit resources “they have a reasonable expectation to recover their costs and earn a reasonable return on their investment,” the association said. It asked the team to review the FCC proposals for USF and intercarrier compensation rule changes.
The rural alliance called an overhaul of universal service and intercarrier compensation rules necessary. For universal service, it suggests targeting support to regions with low population and carriers of last resort, and including a broadband pilot program to build infrastructure in unserved areas. The intercarrier system needs revamping, with uniform rates to take effect over five years, it said, and owners of more expensive networks should receive fair compensation. The alliance’s paper, posted on the transition Web site, has attracted a few supportive comments.
Separately, the Fiber-to-the-Home Council asked House and Senate leaders to include broadband incentives in the stimulus proposal. “A consensus has developed that accelerating broadband deployment will greatly enhance critical infrastructure and produce very rapidly a substantial number of jobs,” said letters that the council sent Tuesday. The group said it supports proposals that include supply-side and demand-side incentives, and should include loan and grant programs, public-private partnerships and consumer incentives, particularly for low-income households.