There’s no reason FCC has to limit itself to same universal service contribution system for all types of telecom carriers, American Assn. of Paging Carriers (AAPC) told Commission in comments Fri. AAPC told agency that all 3 proposals to change contribution methodology to one based on connections would hurt paging companies and suggested agency use different systems for different carriers
President Bush’s budget released Mon. proposed legislation that would assess user fees on unauctioned spectrum licenses. Few details were included in budget as to which unauctioned licenses would be subject to such fee, but it did say fees would begin in 2005 and would total $1.9 billion in first 10 years.
State regulators and FCC are too quick to give wireless competitors right to obtain universal service funding, OPASTCO said in White Paper released at its annual convention in Maui. “High-cost universal service support is not a subsidy program” and regulators shouldn’t designate competitors as eligible telecom carriers (ETCs) without being sure it’s in public interest, paper said. Otherwise, universal service fund will be jeopardized because there won’t be enough money to support it, OPASTCO said. High-cost universal service support going to wireless ETCs has grown to projected $100 million in 2003 from less than $500,000 in 1999, paper said: “It is estimated that if all wireless providers nationwide were granted ETC status that the annual funding level of the USF would grow by approximately $2 billion. Clearly, an increase of this magnitude would not be sustainable… Rural ILECs are the only providers of ubiquitous, high-quality, facilities-based service throughout their respective service areas. Thus, if rural ILECs lose the ability or incentive to continue investing in their networks -- or worse yet, if their existence is placed at risk -- then some rural areas may be deprived of basic universal service.” Paper said regulators had been placing competition above public service and “competition is not always in the public interest.” First priority should be to deliver service to high-cost areas, paper said -- www.opastco.org.
While economic improvement will be major theme pushed by most ILEC and Bell company lobbyists on Capitol Hill in new session beginning in Jan., ILECs also plan to address other issues, from tax reform to content management. Bell and ILEC lobbyists have said regulatory change that could help spur investment is primary goal, but many are vague on specifics and cite pending FCC action as precursor to Hill lobbying strategy.
FCC made interim changes Fri. in system used to assess carrier contributions to Universal Service Fund (USF) and said it would seek comments on making broader changes in future (CD Dec 2 p1). Agency basically modified current system, based on carriers’ interstate revenue, to deal with problems that had arisen with that system.
Congress eventually will have to “weigh in” on universal service, NTCA CEO Michael Bunner said Wed. in letter to incoming Senate Commerce Committee Chmn. John McCain (R- Ariz.) that urged continuing universal service fund (USF) support. “We continue to advocate these concepts before the Federal Communications Commission in a plethora of open proceedings,” letter said. “Yet, it is our belief that it will be crucial for Congress to weigh in on these matters as well, to ensure congressional intent is being met in terms of ensuring the future of this indispensable national policy.” Bunner said “string of adverse regulatory and judicial decisions” in name of “competitive neutrality” have eroded congressional mandate on universal service. “The Senate has long played a leading role in advocating and monitoring the many aspects of this critical national policy,” he said. NTCA outlined its leading USF principles: (1) Universal service support must be sufficient and sustainable and all providers of telecom should contribute as public interest mandates. (2) Eligible telecom carriers (ETCs) receiving universal service support should receive such support based on their own costs rather than on costs of incumbent. (3) Competing ETCs should receive support only when they actually had captured customer lines, begun service to new lines or modified their rates or services. (4) States must take their public interest duties more seriously when authorizing additional ETC’s in given market.
FCC is expected to act by mid-Dec. on interim changes aimed at improving way carriers make contributions to Universal Service Fund (USF). Sources said Commission had planned to act by end of Nov. but decided to delay action until Comr.-Designate Jonathan Adelstein was sworn in.
Protection of universal service will be top priority for NTCA in next session of Congress, but bankruptcy and spectrum management also will be on its agenda. In news conference Wed., NTCA officials said Assn. would lobby for “fair and stable contribution methodology” for universal service fund (USF) and modifications of portability and identical support rules to prevent competitive carriers from claiming funds to detriment of local rural incumbents.
Verizon Wireless proposed to FCC methodology for wireless carriers to ascertain percentage of their revenue that was interstate and international for purposes of universal service fund (USF) contributions. Carrier joined CTIA, Qwest, USTA and Verizon in offering compromise on revising USF contribution methodology (CD Oct 28 p7). In separate filing, Verizon Wireless said safe harbor played key role in minimizing complexity of wireless carrier contributions to USF. Challenge for wireless carriers is in separating end-user revenue into interstate and intrastate categories, it said. Carriers can use software, system upgrades and baseline assumptions to track interstate and intrastate minutes of use, filing said. That can create “reasonable proxy” for allocating wireless revenue for USF contributions, it said. “A safe harbor, updated to reflect current wireless calling activity, furthers the policy objectives of promoting equitable contributions, fund stability and administrative simplicity,” it said. Verizon Wireless said because calling patterns could vary among states and carriers, operators should be able to file interstate/international revenue calculation based on company-specific calling patterns if they had system to track such traffic. Carriers could create such systems based on FCC-approved methodology and Commission could require retention of records that were used to develop company- specific levels. Proposed methodology would: (1) Track min. of use from call records, dividing all interstate and international min. by total min. over certain time period to come up with percentage of interstate and international min. of use. (2) Multiply that percentage of interstate/international min. of use by qualifying service revenue to come up with total revenue base that would count toward USF contribution.
Voice on the Net (VON) Coalition said it supported connections-based approach to funding universal service, concept backed by several telecom industry groups. FCC is considering changing current revenue-based method of assessing universal service contributions. “A connections- based contribution methodology will ensure that USF [Universal Service Fund] payments are assessed in a fair and economically efficient manner,” group said. VON Coalition includes companies offering products and services for use on Internet or IP networks, including Intel and Microsoft.