FCC Set to Launch NPRM on Missing Link in USF Reform
The FCC is expected to take on USF contribution reform at its April 27 meeting, launching a notice of proposed rulemaking. Commissioners already approved orders addressing the start of distribution reform last October and the overhaul of the Lifeline program in January. But the contribution side of the USF program, how money is collected, has yet to be addressed by the FCC under Chairman Julius Genachowski. The FCC is scheduled to release a tentative agenda for the April open meeting on Friday.
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Taking on the contribution factor is expected to be controversial. But Commissioner Robert McDowell has long advocated reform in this calculation. Commissioner Mignon Clyburn has said she would welcome an examination of contribution issues. In a February appearance before the House communications subcommittee, Genachowski was asked repeatedly about contribution reform. He would only commit to starting work on an order by the end of the summer.
"I hope we can launch the USF contribution reform NPRM as soon as possible,” McDowell told us. “Furthermore, I would like to see an array of questions covering as many ideas as possible in that item. At the same time, we should try to conclude an order quickly because the contribution factor has been sky high in the past two years in particular. At the end of the day that is a form of bill shock for American consumers.”
"Since the universal service contribution options have already faced many rounds of comment and there is a broad consensus that the current system is broken, it is conceivable that the FCC could issue a contribution reform order this year -- even after the election,” said John Nakahata of Wiltshire Grannis, former FCC chief of staff.
Free Press Policy Director Matt Wood said timing on an order could be tricky. “Just within the context of implementing the High Cost, Connect America Fund, and Lifeline changes, there is a lot on the commission’s plate in terms of USF work,” he said. “Whether it can move the ball forward in those areas and on contribution reform simultaneously -- while also devoting substantial resources to the incentive auction task force, transaction reviews, and other important proceedings -- remains to be seen.”
"I'm pleased it looks like the NPRM will be on the April 27 agenda,” said Free State Foundation President Randolph May. “There is no reason the commission can’t complete the rulemaking this year. The various proposals have been vetted for years. It is true there are competing interests, but that’s not going to change with further delay. The FCC’s goal should be to adopt a regime that is economically efficient and that substantially reduces the current USF tax burden on consumers. Until the FCC deals with the contribution side, the agency has only done half the job.”