USF Reform Plan Could Hurt Rural America, Panelists Say
The FCC’s Universal Service Fund reform plan, of which many still await details, could hurt rural and tribal operators and investment in rural broadband, speakers said at a Broadband Breakfast Club panel Tuesday. Meanwhile, many broadband projects funded by the Rural Utilities Service are on track, said Undersecretary of Rural Development Dallas Tonsager.
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It doesn’t appear that the FCC’s reform approach would result in adequate broadband infrastructure in rural communities anytime soon, said James Kohler, deputy director of enterprise technology services with the Alaska Department of Administration. There haven’t been assurances from the FCC to preserve state commissions’ authority over intrastate rates, he said. State regulators are “best friends” of rural America, he said. He’s surprised that some state regulators haven’t been vocal about keeping state authority under USF reform. Chairman Julius Genachowski’s Oct. 6 speech (CD Oct 7, p1) on proposed USF order didn’t address the challenges in tribal communities, he said. It would be hard for rural telephone carriers to meet their obligations under current USF revision proposals, he said. USF is intended to cover the gap, but existing proposals wouldn’t fund areas where there’s no infrastructure, he said. Bottom line is to get broadband infrastructure to where it’s most needed, he said.
Any USF reform proposal should address specific challenges in the tribal communities, said Jacqueline Pata, executive director at National Congress of American Indians. Availability of basic emergency phone services on tribal lands is 25 to 30 percent below that of non-tribal communities, she said. It’s necessary to continue the tribal lands exception to the high-cost fund cap, she said.
The FCC should consider a voucher-based system to promote broadband access, said Forbes Mercy, head of wireless ISP Washington Broadband. Under such a system, end users in areas that don’t currently have broadband service could apply for a voucher to cover the cost of installation of broadband service in those areas, he said. He also urged nationwide eligibility requirements that extend beyond the telecom carrier class to parties seeking broadband funding. USF should also be technology-neutral, he said. Rural LECs need certainty so they can continue to go to banks and get loans as they build out their systems, said Leif Oveson, director of government affairs at the National Telecom Cooperative Association.
High-cost fund recipients need to offer high speed service if users in high-cost rural areas are to have access to the same higher-performance broadband services offered in urban areas, said David Russell, solutions marketing director with Calix. A benchmark of 4 Mbps downstream and 1 Mbps upstream may be acceptable near-term in unserved areas but the high-cost fund is intended to support broadband in high-cost areas generally, not just in unserved areas, he said. Officials recently said FCC Chairman Julius Genachowski’s proposed order would raise speed standards to 6 Mbps down/1.5 Mbps up (CD Oct 13 p3).
Meanwhile, large scale broadband infrastructure projects funded by the RUS Broadband Initiative Program are progressing, said Tonsager. But the projects require a strict due diligence process, including meeting local requirements and environmental evolutions, he noted. RUS is on track to expend all funds by Sept. 30, 2015, he said. The agency continued to focus on buildout as well “build-on” parts of the projects, he said. The agency is eager to see the FCC’s USF order, he said. There have been some delays in projects, partly caused by delay in completing due diligence process and a fiber cable shortage, Oveson said.