Two associations for small rural carriers urged the FCC to reject...
Two associations for small rural carriers urged the FCC to reject the agency’s reverse auctions plan for Universal Service Fund distribution. Earlier this month, FCC Chairman Kevin Martin voted for that proposal, which is the second of three FCC…
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plans to overhaul USF now out for comment (CD Dec 15 p3). Other commissioners haven’t voted yet. In a Thursday ex parte letter to the FCC, the Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies said reverse auctions would thwart broadband investment in rural areas. Auctions “would generate significant unpredictability for rural carriers, which is the enemy of network investment,” OPASTCO and WTA said. And major lenders to rural incumbent local exchange carriers have said “the uncertainty of rural carriers’ cost recovery under a reverse auction mechanism would cause them to restrain the amount of debt made available,” they said. Also, auctions are a “'race to the bottom’ that will drive carriers to submit bids that are well below what they actually need to maintain and upgrade their networks to provide an evolving level of quality services in high-cost rural areas,” they said.