Rural Telcos Preparing Summer Swarm on Hill, Commission to Protect USF/Intercarrier Comp Interests

"NTCA, for example, has set July 13 as a ‘fly in’ date for member visits to the FCC and/or to Capitol Hill,” the joint email said. “OPASTCO and WTA are working to facilitate similar visits over the course of the summer, and all three associations are looking to ensure a ’steady stream’ of member visits this summer to provide meaningful input and data on the direction of reform.” The email is signed by NTCA CEO Shirley Bloomfield, OPASTCO President John Rose and Western Telecom Vice President Kelly Worthington. The letter twice solicits funds from rural telcos and their leaders.

"The smallest rural telcos are really pressing the Hill because they feel like the battle isn’t going their way at the Commission,” said MF Global telecom analyst Paul Gallant Friday. “That may have some effect, but USF reform has some real momentum and derailing it won’t be easy.”

NTCA Government Affairs Director Leif Oveson denied that the associations are trying to scuttle the FCC’s efforts. “The legislative route is filled with a lot of uncertainty so the focus right now is still focusing on the FCC and the negotiations with the rest of industry,” he said. But rural telcos are worried that the FCC will take money from companies that are already providing high-speed broadband, Oveson said. “We remain hopeful that industry can come together and put forward a proposal,” he said. But “there’s still a lot of uphill climbing to do. Time is running a little bit short."

The Washington blitz is only part of the rural associations’ strategy, the joint email said. The associations have hired former Sen. Byron Dorgan “to provide strategic advice and public relations counseling.” The North Dakota Democrat has written an Op-Ed piece “on the importance of sustainable rural broadband that will run sometime in the next few days in a major D.C.-based publication,” Bloomfield, Rose and Worthington wrote.

"I don’t want rural areas to be left behind,” Dorgan told us Friday. “The FCC’s proposal is short on specifics, but when they talk about market signals I worry a great deal, because the market has never worked to bring telephone service and/or advanced services including broadband to rural areas.” That’s why government made the USF, he said. Universal service should support broadband, but an overhaul also shouldn’t “pull the rug out from under the universal service concept and … the financing that has made buildout to rural areas possible,” Dorgan said.

The rural associations have also hired Ogilvy Worldwide “to conduct a comprehensive public relations campaign” including “a media blitz, a social media component, a microsite (website) featuring our message and interactive participation for companies and consumers, and advertising in key policy publications,” the joint email said.

Finally, the rural associations “are in the final stages of contracting with a mapping and data survey firm that will enable us to not only show where our collective and respective members service, but also have out our fingertips data about how many people member companies employ, taxes they pay, and other key economic and service related data in each congressional district,” the joint email said. In late June, rural telco officials blasted the modeling used by USTelecom in its industry-wide talks (CD June 28 p7). The modeling company, CostQuest, has a license for Warren Communications product and data.

Rural telco officials have been working the Hill for several months (CD May 27 p3). On June 24, the Wisconsin Congressional delegation -- including Democratic Sen. Herb Kohl and Republican Rep. Jim Sensenbrenner, both high-ranking members of their chambers’ Judiciary Committee -- told FCC Chairman Julius Genachowski in a letter to be careful about reform.

"Certain proposals under review by the FCC could have a devastating impact on small, rural communications providers in our state and their customers,” the letter said. “These proposals seem to discount or disregard altogether the great strides that so many rural cooperatives and small commercial communications providers have made in using valuable USF and ICC resources to provide outstanding service in remote, hard-to-reach and high-cost areas of rural America.” The commission “should embark on a policy course that builds upon this successful model rather than seeking to dismantle” it, the Wisconsin members of Congress said in the letter. “Doing anything less will do a disservice to our constituents, make rural economic development initiatives more difficult, and put a large amount of the Rural Utilities Service (RUS) loan portfolio -- taxpayer money -- at great risk.”

For former Rep Rick Boucher, D-Va., the FCC isn’t the proper venue for universal service and intercarrier comp reform. He told us last week that Congress should tackle distribution and contribution reform. Right now, the FCC is working on the distribution side. The problem is, it doesn’t have the authority to expand contribution requirements, Boucher said. Congress could do so, but it will be politically difficult, Boucher said. “It may be harder for Congress to just raise revenues,” he said.

National Broadband Plan architect Blair Levin said “it would certainly be better if Congress would offer something,” but the “FCC has some options that would greatly improve the current state of the system.” “If Congress were to clear up a number of things on both the contribution and the distribution, it would all be to the good,” Levin told us. “I see no likelihood in that happening. In the meantime, I think the FCC has to look at the options they have.”