McDowell Worried that USF Reforms May ‘Slip Away’

McDowell said he wants to see a reform order “no later than” the FCC’s October meeting. “My concern is we might get two new commissioners on the commission this fall,” he said. “I'd like to see us get an order done before this happens, because that could be used as an excuse for further delay and then we're slipping … and there could perhaps be more pressure from Congress.” McDowell said he has talked to Chairman Julius Genachowski about his worries and “I think he shares this sense of urgency.” A commission spokesman had no immediate comment on McDowell’s remarks.

The agency should have tackled contribution reform, but despite that lost opportunity, McDowell said he’s “optimistic” that distribution reforms can be finished by October. “You know, pretty much any idea that has been thought of regarding universal service or intercarrier compensation has been fully briefed at the commission over the past 14 years,” he said. “The staff has already thought of and written, I'm sure, several drafts."

Asked whether he had any ideas for how the systems should be fixed, McDowell said: “I want to make sure we don’t see an increase in the size of the fund. We actually should probably see a reduction.” Asked for his reaction to a Republican congressional proposal to raid the USF to help close the deficit, McDowell said he didn’t know what House Majority Leader Eric Cantor, R-Va., “is thinking.” The fund has doled out “perhaps several hundred million dollars in incorrect payments” and is sitting on up to $900 million in unused funds, McDowell said.

McDowell also said that if asked his advice by Congress he would recommend a carve out of at least part of the TV band, that would not be subject to sale through a voluntary incentive auction and would be preserved in all markets for white spaces use on unoccupied channels. “I think it adds a positive and constructive chaos to the marketplace,” McDowell said of unlicensed spectrum. “It is an escape valve for those who are concerned about alleged concentration in the wireless marketplace.” High-tech officials warned Thursday that provisions in some of the draft spectrum legislation in the House could prove detrimental to the opening of the TV white spaces and other bands to unlicensed use (CD July 15 p6). The FCC approved its initial order opening the white spaces in 2008. It remains unclear when the first devices will be available for sale in the designed to use the whites spaces as a kind of super-Wi-Fi.

"I've been a long time, strong proponent of unlicensed use of the TV white spaces,” McDowell said. “The possible consumer benefits are fantastic.” McDowell speculated that once the spectrum is put in play, it could prove as popular as Wi-Fi, which exploded in use almost overnight. “It was almost as if on Friday nobody had heard of Wi-Fi and by Monday everyone had it,” he said. “The same could be true of our unlicensed use here. … When it’s unlicensed that really stimulates a quick build out and a lot of small businesses and entrepreneurs can get involved very, very quickly."

Turning to the FCC’s net neutrality rules, McDowell said that the Paperwork Reduction Act review had been “abnormally delayed.” McDowell voted against the order last year. The long review is just “tier one of the unintended consequences” from an “ill-advised” order, he said. The rules could take effect formally in late October, but will be appealed and “I think there’s a better than average chance that these rules could be stayed or frozen in court,” McDowell said.