Wireless Carrier Group Asks FCC to Also Cap USF Payouts to ILECs
The Alliance of Rural CMRS Carriers asked the FCC to impose an interim cap on per-line universal support for all incumbent local exchange carriers, freezing payouts at March 2008 or March 2010 levels. The filing came almost two years after the FCC imposed a cap on universal service payments to competitive eligible telecommunications carriers (CETCs) in May 2008. Rural carriers lost a challenge to that order in the U.S. Court of Appeals for the District of Columbia Circuit.
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Under the proposal, support would be calculated each quarter by determining whether an ILEC’s support has increased on a per-line basis since the effective date of the cap. If per-line support increases, it would be adjusted downward. Based on “preliminary” research, if the per-line support available to ILECs is set at the March 2010 levels, support to ILECs nationwide between the second quarter of 2010 and the second quarter of 2013 would be reduced by about $541 million, the group said.
The group said adopting the proposal would mean “significant funds may be repurposed to broadband programs immediately [and] the Commission will begin to rationalize the current support mechanism for ILECs, by causing support to increase or decrease with success in the marketplace.” Carriers signing were Viaero Wireless, Cellular South, Smith Bagley and Cellular One.
“It seems clear that we're going to have USF reform,” Davis LaFuria of Lukas Nace, a lawyer for the group, said in an interview. “We want it to be competitively neutral. Everyone in this industry should share in the benefits and burdens of universal service.”
The wireless proposal “ignores the total network theory of how USF support works,” said Joshua Seidemann, vice president regulatory affairs of the Independent Telephone and Telecommunications Alliance, which represents ILECs. “In USF support, carriers come in and they demonstrate the cost of their network, not per-line. There’s a dissonance in talking about a cap on per-line support.” The FCC decided to cap CETC support because it was increasing rapidly, while wireline support was “declining or remaining steady” during the period, he said. “That’s why there was a cap imposed on that segment and they didn’t say, ‘OK, we have to put the interim cap on the other.’ The fact of the matter is ILEC support has been capped for years and it has been operating under a cap.”