USF subsidy of wireless carriers doesn’t significantly increase wireless provider coverage in rural areas, said studies for Verizon by Criterion Economics. Economist Jeffrey Eisenach said FCC, USAC and wireless carrier coverage map data show “unsubsidized carriers cover more people than subsidized” carriers. Subsidized competitive carriers aren’t compelled to expand geographic coverage areas, he told a Wed. briefing. They can add subscribers merely by opening a retail store in a town they already serve, intensifying coverage in the town without pushing out to more rural areas, he said. Another way to look at it, said Eisenach: Most USF-subsidized wireless service occurs in areas where unsubsidized wireless providers already operate. “All but 3.2 million, about 2%, of the population in subsidized areas have duplicative coverage from unsubsidized carriers,” he said. For example, “all but 2 million of Alltel’s 34.7 million subsidized covered pops have coverage from unsubsidized carriers,” Eisenach said. “There is no statistical correlation between the amount of subsidies paid and the proportion of the population or land area that has wireless coverage. I don’t think most people, including policymakers, have focused on the fact that the USF subsidizes lines,” not coverage areas. “We would strongly disagree that USF subsidies don’t equal more wireless service to rural Americans, said a CTIA spokesman. “Rural Americans desire wireless service, just like suburban Americans.”
The deadline for reply comments on a proposal to cap USF payments to competitive carriers moved to June 21 from June 13.
Senate Commerce Committee members said Tues. it’s not realistic to revamp the Universal Service Fund in 6 months at the start of the 2008 campaign cycle. Act now, members told FCC Comr. Tate, who serves as Joint Board chair. Tate endured tense, sometimes hostile questioning by members from both sides of the aisle over a recent Board recommendation to cap funding for competitive eligible telecom carriers (CETC), which are mostly wireless. To better understand how its decisions on rural service affect Americans, the FCC should move to the Me. backwoods, an official from that state said.
A revived net neutrality debate could block passage of telecom bills gaining momentum this Congress, Rep. Boucher (D-Va.) told Pike and Fischer’s Broadband Policy Summit Thurs. In the “hiatus” on major legislative activity, network operators and content providers should be talking, he said. Citing discussions with both sides, Boucher said he thinks there’s “potential common ground” and that the issue should be resolved.
Wireline and wireless carriers lined up on opposite sides as comments accumulated Wed. at the FCC on capping USF subsidies to competitive rural carriers. The cap was recommended by the Federal-State Joint Board on Universal Service as an interim measure to slow the rampant growth of the Universal Service Fund. But the recommendation to apply it only to competitive eligible telecom carriers (CETCs), generally wireless carriers, has created a sharp division among rural carriers.
The Senate Commerce Committee plans 2 hearings next week, on the Universal Service Fund (USF) and the 700 MHz auction, the committee said Mon. The June 12 USF hearing will consider a Joint Board recommendation to cap distributions of funds to wireless programs. June 14, the committee will examine public safety and competition issues related to the 700 MHz auction. In coming weeks, the committee may hold hearings on media ownership and violence, but nothing is set, Hill sources said.
A federal court Fri. vacated part of an FCC order under which VoIP providers must contribute to the Universal Service Fund (USF). A 3-judge panel of the U.S. Appeals Court, D.C., said it found “the Commission’s explanation wanting as to the pre-approval of traffic studies and the suspension of the carrier’s carrier rule.” Judges Harry Edwards, David Tatel and Merrick Garland heard the case brought by Vonage and CCIA (CD Feb 12 p1), with Tatel writing the opinion.
The FCC should create a pilot program that pays for broadband deployment in rural areas with “a specified amount of funding, such as $1 billion per year,” AT&T recommended Thurs. in comments on Universal Service Fund (USF) reform. A 2nd program could provide money for mobile wireless service in those areas, the company said. “Rather than attempting to use the current federal high cost [USF] mechanism to achieve its broadband deployment objectives, the Commission must approach the problem head-on,” AT&T wrote.
Capping universal service support to competitive eligible telecom carriers (CETCs) may be seen now as an interim measure but easily could become the norm, Rep. Allen (D-Me.) told FCC commissioners in a May 22 letter opposing the proposal. “My worry is that this action will act as a pressure valve and decrease the urgency for broader reform,” Allen said. Me. has 2 wireless ETCs “that have productively used universal service funds to expand service to remote areas in our largely rural state,” Allen said: “It is not fair that residents in rural Maine should lose the access to modern telecommunications services under a one-size-fits-all cap.” Comments to the FCC on capping Universal Service Fund (USF) subsidies to CETCs are June 6, replies June 13. The Federal-State Joint Board on Universal Service recommended the cap. The comment deadlines awaited Wed. Federal Register publication of a notice of proposed rulemaking based on the joint board proposal (CD May 15 p9).
N.Y. residents would pay $150 million more into the Universal Service Fund (USF) if the contributions system is changed as proposed, consumer groups said Tues. Contributions are made by telecom providers, which charge consumers for them. Plans to shift from a revenue-based payment to a per-connection charge, such as one based on phone numbers, would boost N.Y.’s share from $407 million to $555 million, said the League of United Latin American Citizens, N.Y. State Alliance for Retired Americans and the Keep Universal Service Fund Fair Coalition. The connections- based proposal would “take a bad situation and make it even worse” because New Yorkers already pay more into the fund than they get back, the groups said in a press teleconference. Accusing “big phone companies” of pushing the connections system, the groups said the FCC shouldn’t move from “a consumer-friendly, pay-for-what-you-use tax on long-distance to a regressive per-connection charge that would be imposed on every phone line whether or not consumers made any long distance calls at all.”