USF Order Would Mean Minimal Disruption to State Roles, FCC Officials Tell NARUC
ST. LOUIS -- The FCC is careful not to disturb states’ role as it revamps the Universal Service Fund and intercarrier compensation system, said Wireline Bureau officials at NARUC’s annual meeting Tuesday. They didn’t address the timing of the order’s release, though several state officials expect it to be out before Thanksgiving.
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The order contains only what disruption is minimally necessary for states, said Sharon Gillett, bureau chief. It includes strong public-interest obligations for USF recipients and specific reporting and penalties for failure to meet requirements, said Carol Mattey, deputy bureau chief. The order includes numerous suggestions from state members of the Federal/State USF Joint Board, she said. The order also establishes a federal/state oversight system, she said. All reports and data on compliance with public-interest obligations will be provided to the FCC and the state commissioners, she said. The FCC seeks to continue to respect the role for states within the national framework, said Gillett. Due to jurisdictional and financial constraints, not every state could undergo state USF revamp, she said.
Regarding changes to ICC rates, Gillett said it’s the industry changes, not the FCC, that make the ICC rates go away. The order addresses the lack of clarity on treatment of growing VoIP traffic by establishing, prospectively, treatment of VoIP ICC, she said. She was quick to point out that the order doesn’t classify VoIP service and doesn’t change VoIP contributions to state USF. It appears that the order didn’t address the contribution base, which might be dealt with in future proceedings, said John Burke, member of the Vermont Public Service Board. He warned of the potential harm by not classifying VoIP as telecom service.
In the USF rulemaking notice, the FCC seeks to review issues like eligible telecom carrier obligations in areas where support is no longer provided, the state role in identifying areas of overlap with unsubsidized competitors, and additional enforcement tools for non-compliance with public interest obligation, Mattey said. The commission also seeks to review the possibility of having a uniform broadband speed test, she said. The Wireline Bureau will work on a broadband cost model in 2012 and expects to submit its progress report by mid-year 2012, she said. FCC officials have scheduled meetings with state commissioners at the NARUC meeting to discuss USF, ICC and Lifeline and Link-Up issues.
The order gives the industry some predictability, said Jonathan Banks, USTelecom senior vice president. It would lead to a simpler and clearer regulatory structure, allowing companies to focus on improving their business models instead of litigation, he said. Overall, the ICC transition is a reasonable compromise, said Steve Morris, NCTA vice president. He’s pleased the FCC managed to keep the size of the USF, he said. He praised the proposal to target support at areas where there are no subsidized competitors, saying he hopes that will be incorporated in the rate of return side.
It appears that the order would do nothing specifically to fix issues affecting small rural carriers, said Kenton Pfister, vice president with Great Plains Communications. A big concern about the order is the lack of cooperation with states on the bill-and-keep issue, he said. The company is looking at its options to appeal, he said.