Small Wireless Carriers Protest on USF High-Cost Cap Birthday
The Rural Cellular Association didn’t rejoice on the one-year anniversary of the interim cap for the Universal Service Fund high-cost program. Instead, the association of small wireless carriers Friday sent a scathing white paper to acting FCC Chairman Michael Copps. RCA scolded the agency for delaying removal of the “interim” measure, and for imposing the cap in the first place.
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Democratic commissioners dissented from the FCC’s 2008 decision to impose an interim cap, saying they would have preferred comprehensive reform. At the time, Copps called the cap “an illusory Band-Aid that is supposed to contain costs but, in reality, imposes the much heavier cost of lost opportunity to reform Universal Service and put America back in the vanguard of advanced telecommunications.” Copps now finds his party in the majority, but few in the industry expect the commission can do any USF reform until Julius Genachowski, whose nomination is pending, arrives, and maybe not until all five member seats are filled.
“The cap on wireless is unfair and one-sided, and it’s harming consumers,” said RCA Executive Director Eric Peterson in a written statement Friday. The cap only applied to wireless competitive eligible telecom carriers, even though only about 17 percent of high-cost support goes to wireless carriers, while 45 percent goes to wireline incumbents, he said. The cap has made it tough for wireless companies to serve rural and high-cost areas, despite growing demand for mobile voice and broadband, he said. “This competitive problem has been made even worse by the downturn in the national economy and the telecommunications sector.”
Interpretation of the cap by the Universal Service Administrative Co. has further reduced high-cost funds for wireless carriers, RCA said in the paper. When Verizon Wireless acquired Alltel, for example, USAC removed their payments from the total capped pool of money for wireless, RCA said. FCC approval of the merger “should have made at least $67 million … available to other wireless carriers.”
RCA wants immediate FCC action to repeal the cap, it said. “The problems that have been caused by the interim cap are urgent, severe and ongoing,” and there’s no end in sight, they said. The regulator promised to do comprehensive USF reform in 2008, and subsequently failed to find consensus, it said. “Now, with the prospect of Fund reform slipping further and further into the future, the Commission’s ‘interim’ cap has taken on a life of its own.”