FCC Moves Forward on USF, ICC; Immediate Action on VoIP urged at D.C. Bar Panel
The FCC is moving forward on drafting an order on a Universal Service Fund and Intercarrier Compensation revamp and is working on accelerating the process, said Carol Mattey, deputy chief of the Wireline Bureau, during a D.C. Bar panel Wednesday. Industry panelists urged immediate action on VoIP and a more targeted USF.
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USF and ICC are the FCC’s highest priorities now, Mattey said. The agency is busy reviewing the comments and looking at specific issues, she said. It’s a unified USF, ICC effort, she said. There has been a lot of coordination, said Rebecca Goodheart, Wireline Bureau associate chief.
Meanwhile, the lack of clarity on VoIP compensation has resulted in a chaotic market with disputes, litigations, complaints and financial uncertainty, said Chris Miller, counsel with Verizon. The FCC should adopt a single low rate of $0.0007 per minute for all VoIP traffic that connects with the public switched telephone network (PSTN), he said. The rate is reasonable because it’s already the rate for a substantial portion of the traffic that carriers exchange today, he claimed. Eric Einhorn, vice president of federal government affairs with Windstream, agreed that immediate action is needed, but argued VoIP providers should pay approved rates for terminating traffic on PSTN. There’s no rational basis for treating VoIP and other PSTN traffic differently, he said. VoIP and other PSTN traffic use the same network components, the terminating carrier incurs the same costs and their services appear virtually identical, he said. But a transition period, benchmarks and great flexibility are needed, he said. Rick Brecher, partner with Greenberg Traurig, sees VoIP as no different than PSTN as it offers consumers the same ability to communicate. The FCC should revamp the compensation system so one entity pays for using the other entity’s network depending on the cost of making that network available not the business model of that entity, he said.
The key is targeting USF support based on nature of the area, not the size of the company, said Einhorn. There are lots of political pressures to maintain the fund’s size or even shrink it, so “we are not looking to grow the size of the fund but to use it more efficiently,” he said. Funding should be targeted to areas where deployment couldn’t occur without government subsidy, he said. Efficient use of USF would also benefit consumers, who pay for the fund through surcharges, Miller said. Reverse auctions or competitive bidding could determine how much USF money a carrier really needs to offer service throughout high-cost area, he said. A reverse auction makes sense only if it’s conducted properly, said Brecher, and if multiple players participate in the auction. In many places, especially in rural areas, the number of providers is limited, he said. Many rural companies are financed by RUS loans that are based on a simple principle: Borrowed money needs to be repaid, he said. If USF support is changed in a manner such that the recipients are no longer economically viable, they wouldn’t be able to repay the loans, he said. One solution is to broaden the base of contributors, he said.