Rural Telcos Spell Out Areas of Accord, Discord in USF Overhaul Effort
Rural telco representatives “reached agreement” on various aspects of a plan to overhaul high-cost USF support for rate-of-return carriers, but were still seeking to “narrow or overcome” differences in some areas and develop more specific proposals in other areas, said a Friday ex parte filing in docket 10-90 by WTA about a meeting with FCC officials last week. WTA and other rural representatives had agreed to chart a “basic two-path approach composed of: (1) updates to existing mechanisms; and (2) a Model-Based Path,” said the WTA filing, which spelled out further areas of agreement and remaining disagreement.
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The groups previously had noted they had asked the FCC for an extension until June 3 to agree on an industry plan (see 1505210042). FCC Chairman Tom Wheeler has said he would like to release a model-based approach to stand-alone broadband support “by football season,” and commissioners agree they should act by the end of the year to revamp the rate-of-return (RoR) universal service fund, which provides about $2 billion in annual support to generally smaller carriers.
Derrick Owens, WTA vice president-government affairs, said the parties set up calls and meetings for coming days “to try to meet the commission’s deadline,” including the extension the groups believe is needed to “get us closer to, if not over, the goal line” of a consensus plan. “Everybody has something different they’re trying to make sure happens in this whole process,” he told us Tuesday without elaborating. He said negotiators will have to run any industry plan by their members, policy committees and boards.
The WTA filing said the parties agree that existing mechanisms should be revised to support “data-only connections in addition to lines already supported by High-Cost Loop Support and Interstate Common Line Support,” but there’s no consensus on such a broadband-only support mechanism and how it would function. There’s much agreement that broadband-only support wouldn’t disrupt existing mechanisms and would include prospective limitations on capital and operating expenses, “but the specific features of the limitation on operating expenses have not yet been finalized and agreed upon,” the filing said.
The RoR representatives agree that model-based support should be voluntary, last at least 10 years, be available study-area by study-area, and be implemented as soon as possible, the filing said. The parties believe a modified version of the alternative connect America cost model (A-CAM) will likely be used for the model-based path, though “concerns about certain aspects of and inputs to A-CAM” need further discussion and resolution, the filing said. RoR carriers should have two chances to opt into model-based support -- at the start of Year 1 and at a later date to be determined -- it said.
The filing said the parties agree a budget for the model-based support should be set when the plan takes effect. “To enable elections of a Model-Based Path without disrupting existing support mechanisms, CAF [Connect America Fund] reserve dollars should be dedicated to RoR carriers that receive less in existing support than the amount the A-CAM determines they are eligible to receive,” it said. “In the event that the dedicated CAF reserves are insufficient to fully fund model-based support, such CAF reserves should be focused upon study areas that have lower percentages of 10/1 [Mbps] broadband build-out.”
The parties agree “model-based support should be provided to all eligible locations pursuant to the general parameters of A-CAM Illustrative Run 1.3,” the filing said, but there should be “an effective challenge process” to “offset potential flaws and inaccuracies.” The model-based support should include buildout requirements based on providing 10/1 Mbps data speed, but the duties shouldn't be increased during the term of the plan, the filing said. The number of locations a carrier would have to reach with this broadband performance should reflect both actual funding levels and the Year 1 buildout obligations, the filing said, saying the proposed maximum model-based support of $230 per location may not be enough for all areas.
The parties agree RoR telcos should be able to opt into model-based support “on a flash-cut basis” if they want to, the filing said; there has been substantial discussion of further transition options and details, but there's not yet agreement.