Battle Lines Unchanged as AT&T Renews Call for Numbers-Based USF Contributions

There’s a good chance the AT&T petition will spur the FCC to once more refresh the record on USF contribution, said David Bergmann, chairman of the National Association of State Utility Consumer Advocates’ telecom committee. When it does, NASUCA will remind the FCC of the association’s previous arguments, he said. The AT&T petition contains “nothing new,” but historically the commission hasn’t ignored the company, he said. Legally, the agency could take action without commencing a new comment cycle, but refreshing the record would allow it to take the new contribution factor into consideration, he said.

With a new commission, another USF comments round is certainly a possibility, said President Curt Stamp of the Independent Telephone & Telecommunications Alliance. However, ITTA believes the record is sufficiently vast, he said. At the very least, the AT&T petition puts the issue “back on people’s radar screens,” he said. ITTA is mulling whether it should respond to AT&T, he said. If it does, the group probably will recycle previous arguments, Stamp said.

The AT&T filing is a good thing if it alerts FCC Chairman Julius Genachowski of the need to take action, said another wireline industry official. However, the commission already has enough on the record and needn’t begin another round of comments, the official said. Even if the commission doesn’t formally seek comment, the AT&T filing is likely to encourage usual suspects to revive old arguments through the FCC’s ex parte process, since there’s a new chairman and two incoming commissioners, the official said.

The contribution factor will continue to balloon unless the FCC acts, AT&T said in the petition. Basing contributions on the amount of phone numbers used by a carrier is simpler, more transparent and more technology neutral than looking at carriers’ interstate revenue, it said. The regulator must consider assessing USF fees on new avenues of communication, AT&T added. “We are quickly reaching the point at which all voice services will be just one of many applications on the Internet, some of which contribute to universal service but the majority of which will not,” it said. “Unless the Commission is prepared to use its ancillary jurisdiction in ways that it has not previously, the consequence of these changes will be an even smaller contribution base.”

AT&T filed its new petition alone, but it cited agreement on its original numbers proposal from CTIA, USTelecom and NCTA, among others. Verizon Vice President Kathleen Grillo endorsed the filing Monday, saying a numbers- based system would be easier to understand and administer. “We need to fix the system to ensure that the fund can meet the important needs of people and healthcare facilities in rural areas, schools and libraries, and low-income customers,” she said.

The chief opposition on AT&T and Verizon’s pure numbers plan has come from rural carriers, though some are more condemning than others. Dan Mitchell, legal vice president of the National Telecommunications Cooperative Association, Monday called the AT&T petition a “propaganda piece” aimed to catch the new FCC off guard and spur premature action. AT&T couched the filing as an emergency petition, he said, but “from our perspective, it’s not an emergency at all.”

NTCA plans to file a response soon, urging the FCC to keep a revenue-based mechanism but require contribution from all broadband providers, said Mitchell. Using numbers ties contribution to legacy wireline technology at the same time the USF should be shifting focus to broadband, he said. NTCA doesn’t think the new factor is unreasonably high, considering similarly rising costs of gasoline and other commodities, he said.

Some other rural carriers that oppose pure numbers-based contribution would support a mechanism that looked at numbers and connections, said one wireline industry official. Given the shift to broadband, they believe it’s more relevant to measure connections than numbers, the person said. However, the same rural carriers don’t believe the FCC should outright dismiss a separate plan that would keep the revenue-based system but add intrastate revenue to the contribution base, even if it would require legislation, the official said.