Treatment of VoIP, Transition From ILECs Seen Among CAF II Implementation Issues
Treatment of VoIP and the transition from incumbent telcos are among issues to be ironed out after the FCC Connect America Fund Phase II subsidy auction, a National Regulatory Research Institute webinar heard Wednesday. Winning CAF II bidders are to…
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receive $1.49 billion cumulatively over 10 years to provide broadband and voice service in areas traditionally served by price-cap telcos (see 1808280035). "You have a whole new cast of characters," said consultant Carol Mattey, citing fixed-wireless, electric utilities and ViaSat. The $23 million OzarksGo will receive is a "drop in the bucket" of a $180 million fiber project offering gigabit speed, said General Manager Randy Klindt, whose company will lease capacity from parent Ozarks Electric Cooperative. To become a CAF eligible telecom carrier, winning bidders must provide a telecom service, said Mike Romano, NTCA senior vice president. He said ETC aspirants should familiarize themselves with common carrier requirements, given uncertainties. He noted an 8th U.S. Circuit Court of Appeals ruling that interconnected VoIP is an information service and FCC reluctance to decide the matter. Romano said rate-of-return rural telcos see the CAF II support as a way to "edge out" service areas. USTelecom Vice President Mike Saperstein cited a "halo effect" where ILEC winning bidders provide service above minimum speeds in areas adjacent to their territories. Romano said CAF II winners won't technically be carriers of last resort, but "practically speaking" will be, replacing price-cap telcos no longer being subsidized. He and Mattey said that raised questions about the transition as CAF II winners build out over six years. Mattey said the FCC will have to issue a new NPRM on Remote Areas Fund details, including any change to a 2011 plan for a $100 million annual budget. She thinks that amount would be enough if the FCC confined the RAF to CAF II areas that didn't receive winning bids, but not enough if it broadens coverage. She said ViaSat, a CAF II auction winner, and Hughes, a New York State broadband auction winner, essentially revealed what they need to provide satellite broadband in high-cost areas: "a very low number." Asked if the U.S. would ever get to 100 percent broadband coverage, Mattey quipped, "We're just going to move the goal posts." She expects the FCC to increase the 10/1 Mbps standard for new CAF phases within three years. Romano agreed, saying 25/3 Mbps is likely. USF contributions must become more sustainable, said speakers. Nobody was optimistic.