Give ‘Appropriate’ Transition for USF, ICC, Frontier Says

In comments of its own, the Rural Broadband Alliance urged the commission to “ensure that sustainable and predictable cost recovery mechanisms are available to a rural rate-of-return carrier to provide that carrier with a reasonable opportunity to recover additional expenses incurred to provide an evolving level of universal service.” The Alliance laid out a seven-point voluntary broadband program that it said was “Similar to options provided today to rural rate-of-return carriers (cost, average schedules, and price-caps)…” The plan would let “rate-of-return carriers freeze their interstate revenue requirement as of a date certain” and would consider all “investments and expenses” in a rate-of-return carrier’s most recent cost of service study to be “deemed used and useful.” Frozen interstate revenue would be “subject to an annual reduction” based either on depreciation “or a factor (similar to the productivity factor concept used with price-caps),” the Alliance said.

The frozen revenue could also be increased annually “to reflect additional expenses needed to maintain universal service or to provide an evolving expansive definition of universal service,” the Alliance said. “Carriers should not have the obligation to incur additional expense without the provision of a cost recovery mechanism that will predictably provide the needed funding,” the Alliance added. Companies volunteering for the program would obtain USF funding from “the residual of its adjusted frozen interstate revenue requirement reduced by the company’s settled access charge revenues and subscriber line revenues.” The Alliance added that because “the plan provides for a residually derived USF payment, the option can be exercised either within or outside of” National Exchange Carrier protocol. Finally, the Alliance said its plan would give “the option for the electing carrier to move to access charge price caps with recover from the” new USF-for-broadband-fund “of the otherwise resulting lost access revenue needed for cost recovery.” This, the Alliance said, would “address carrier concerns with shrinking access minutes.” AT&T, among others, has suggested that access minutes on the old copper-wire network are collapsing.

Lobbyists for rural carriers in Hawaii and Alaska went further than the Alliance, according to an ex parte notice published Thursday. The commission should “carve out an exception or special high-cost mechanism for Alaskan and Hawaiian rural carriers,” the group said in its Tuesday meeting with Wireline Bureau staff. “The very high construction, maintenance, transportation and other costs to serve rural Alaska and Hawaii have required very substantial federal high-cost support,” the lobbyists said. “Any significant reduction of this essential revenue stream for Alaskan and Hawaiian rural carriers not only would halt their future deployment of broadband services, but also would put them in default on their existing loans and threaten the viability of their existing operations.”

ViaStat and subsidiary WildBlue Communications held a meeting with FCC staff last week “regarding the significant role that satellite broadband can have in meeting the needs of the unserved, reducing the overall size of the [proposed Connect America Fund], and generally providing a positive competitive influence in the broadband industry throughout the nation."

Comments are due next week on some of the commission’s intercarrier comp and USF proposals. CompTel filed a request for an extension, according to documents released Thursday. “Parties need additional time to consider and provide comment on the important issues raised by the Commission’s NPRM,” CompTel said in its two-page request. “Once implemented, the rules the Commission adopts will have far-reaching impact on the industry as a whole. Given the importance and complexity of this rulemaking, an additional week so that parties can fully and carefully analyze the Commission’s proposals will provide a benefit in the form of more comprehensive recommendations without causing an undue delay in the process.”