NTCA Proposes Two-Step Path for Rural USF Model; ITTA Prefers Single Move
Rural telcos are taking different tactical approaches as the FCC looks to overhaul rate-of-return USF subsidies for the broadband era. NTCA this week suggested a two-step path for giving rate-of-return carriers the option of receiving high-cost funding support based on a broadband cost model. The small-carrier RLEC group said the FCC could “adopt the concept of a model-based support option in relatively short order” that defines "key parameters" -- along with a standalone-broadband fix and other changes -- while taking more time to fine-tune the model. But ITTA, representing midsize carriers, said the FCC should soon approve a model-based mechanism in one order.
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NTCA said its proposal would allow the FCC “to offer RLECs a voluntary option” to receive model-based support while also addressing continuing concerns about the model. “The Commission can and should adopt in the very near term, as part of a package of reforms with a simple fix for the standalone broadband problem and other measures as previously noted, a voluntary model-based path to support,” NTCA said in a filing posted Wednesday in docket 10-90. "The Commission could approve key parameters of that voluntary model path such as election procedures, terms of support, and obligations, while then promptly pursuing several essential steps to refine the model in anticipation of final publication of offers and distribution.” NTCA said various details of the model and its ramifications, including for special access and other tariffed services, need more work.
ITTA President Genny Morelli disagreed with that approach. “We think the commission will be ready to adopt a final order establishing a model-based support plan very soon, if not by January then very soon thereafter,” she told us. “There is no need for the commission to adopt an interim order on a model-based plan with details to be followed later. We think all the elements of a model-based plan can be put in place in the next month or two.”
NTCA said it generally supports draft rules proposed in a Dec. 4 filing by ITTA and USTelecom to begin implementing the model option, but it made various suggestions for modifications or clarifications. For instance, NTCA proposed any “budget headroom” freed up when a carrier elects a certain model transition path be used “to lessen the impact of budget controls and other reforms on RLECs that do not elect model-based support, and thereby address concerns about reasonable comparability in rates for consumers served by such RLECs.” Such a guarantee is “essential” to “address serious concerns highlighted by the recent ‘price-out’ filings that show negative impacts of ‘budget controls’ on carrier support and consumer rates under a ‘bifurcated approach’ to USF reform.” NTCA has said the FCC also needs to take more time to finalize its proposed bifurcated approach for updating legacy mechanisms.