FCC Mulling More USF for ILECs Losing Access Lines
The FCC tentatively concluded that incumbent local exchange carriers should get more universal service support under the local switching support (LSS) mechanism if they lose a significant number of access line customers. The conclusion came in a rulemaking notice responding to a petition by the Coalition for Equity in Switching Support. It protested an FCC rule that reduces a small incumbent carrier’s LSS support when its number of access lines climbs above a specified threshold but doesn’t increase support if the count falls below the threshold (CD Sept 3 p7). Republican commissioners supported the rulemaking but distanced themselves from the tentative conclusion.
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The FCC wants comment on the possible effects of the proposed rule change, with “specific data regarding the amount by which such a change will increase universal service high-cost support disbursements, and an analysis as to why any such increase … is justified.” The rulemaking will take up only the “relatively minor change to an existing rule, and nothing herein is intended to reflect or prejudge our consideration of LSS as part of any comprehensive universal service reform,” the FCC said. Comments are due 14 days after the rulemaking is published in the Federal Register, with replies due one week later.
Commissioner Robert McDowell said he had “some concerns that this order has included specific tentative conclusions without sufficient justification on the record.” USF shouldn’t “reward companies for losing customers to competitors,” he said. “On the other hand, in the context of our existing rules, I understand the hardship concerns expressed by the petitioners. I hope that the resulting record will lead us to a fuller understanding of the ramifications of the rural carriers’ request.”
Commissioner Meredith Baker said her support “in no way prejudges [her] consideration of LSS, or any other matter related to high-cost support, in any comprehensive reform proposal that could come before me.” She added that the USF “is long overdue for a comprehensive overhaul, in light of significantly changed circumstances in the communications marketplace.” McDowell agreed, saying USF “is in dire need of comprehensive reform.”
The coalition hadn’t asked the FCC for a rulemaking. The group sought clarification that existing rules allowed ILECs to get more support when access lines fall below a specific threshold. In an order Friday, the commission rejected that request on procedural grounds. “We find no basis in the rules or the record of the Commission’s proceedings to support the clarification the Coalition seeks,” it said. The FCC said its silence on the matter hasn’t created ambiguity in this case.
But the FCC said it believes “public policy supports” a rule allowing ILEC eligible telecom carriers with declining access lines to use a higher dial-equipment-minute “weighting factor” in doing jurisdictional separations and in figuring LSS support. Applying a higher factor results in more support. “The Coalition has provided evidence that failing to provide the higher level of LSS has caused or threatens to cause small incumbent LEC ETCs some hardship,” the FCC said.
The National Telecommunications Cooperative Association is “disappointed that the commission denied the Coalition’s petition but “pleased” about the rulemaking, said Legal Vice President Dan Mitchell. “We anticipate participating in this proceeding and supporting the Commission’s tentative conclusion.” USTelecom “appreciates that the commission recognizes LSS as a pressing issue,” a spokesman said. “This yet again illustrates the need for comprehensive USF and intercarrier compensation reform.”