An FCC rule has created a “one-way ratchet” effect that’s reduced USF support to carriers that need it, small rural companies said in comments Monday on a petition by the Coalition for Equity in Switching Support. Under the commission’s dial-equipment-minute weighting rule, a small ILEC’s LSS support is reduced when its number of access lines climbs above a specified threshold. The coalition complained that a small ILEC won’t get more support if its access-line count falls below the threshold. In comments this week, no party opposed the coalition, which wants the FCC to apply the threshold rule in both directions. With access line loss intensifying, many companies are now “receiving less LSS than other companies with a comparable number of lines and comparable switching costs,” said the National Exchange Carrier Association, National Telecommunications Cooperative Association and three other coalitions of small incumbent local exchange carriers, in joint comments. The problem is particularly severe for small ILECs, which face high per- subscriber switching costs “because they lack the number of subscribers or the concentrated subscriber population that would enable them to take advantage of economies of scale and scope,” they said. The rule is hurting consumers in South Carolina, said Randy Mitchell, a commissioner of the state’s public service commission, in separate comments. Affected companies there completely lost LSS support, and as a result are having difficulty keeping rates low and maintaining and developing infrastructure, he said.
The FCC needs more time to finish an overdue revamp of jurisdictional separations, said states, carriers and consumer advocates. In comments last week, they supported the commission’s tentative conclusion to extend the eight- year-old freeze on separations, but fought over how much longer the “interim” measure should last. Without FCC action, the freeze will expire June 30.
The FCC will likely get lengthy input on a vast array of controversial telecom issues, as it attempts to develop a national broadband plan, said industry officials we polled for reaction Thursday. In a 52-page notice of inquiry released Wednesday (CD April 9 p1), the FCC asks questions on universal service reform, open networks and nondiscrimination, the role of competition, how to define broadband, and several other big issues. The FCC is required under the American Recovery and Reinvestment Act to deliver its national broadband plan to Congress by Feb. 17.
The FCC opened a rulemaking to revamp universal service high-cost support for non-rural carriers. In a notice of inquiry adopted 3-0 Tuesday and released Wednesday, the FCC asked how it should respond to a 2005 remand by the 10th U.S. Circuit Court of Appeals. In 2005, the court called unlawful the FCC’s current non-rural rules, which address carriers like Qwest that serve high-cost areas with too many lines to be considered “rural” by the statutory definition.
The FCC opened a proceeding to develop a national broadband plan, at its meeting Wednesday. Commissioners unanimously approved a notice of inquiry on the plan, asking a laundry list of questions on how to effectively and efficiently spur broadband deployment and adoption. The FCC must deliver a plan to Congress by Feb. 17, under the American Recovery and Reinvestment Act.
Congress should make cybersecurity, not net neutrality, its main communications priority in the year ahead, James Cicconi, AT&T senior executive vice president, told reporters. He said he expects quick action from the FCC and Congress on a Universal Service Fund overhaul because of growing recognition that the current system is broken. And he endorsed Verizon’s position that the 700 MHz D-block should be given to public-safety agencies for immediate use rather than go through a second auction.
Companies need only pay a universal service contribution for the telecom service aspects of multi-protocol label switching, consistent with FCC precedent on other transmission protocols with information-processing capabilities, the FCC Wireline Bureau said. In a late Wednesday letter to the Universal Service Administrative Co., the bureau appeared to respond to a petition by Masergy Communications filed last Friday (CD March 31 p7). Masergy urged the FCC to clarify that information service aspects of MPLS shouldn’t be subject to USF contribution.
House Commerce Committee Chairman Henry Waxman of California is reviving a Universal Service Fund investigation that he began last Congress, when he was the Oversight Committee chairman. Waxman sent a letter Wednesday to FCC acting Chairman Michael Copps asking for an “update to an earlier data request concerning universal service fund disbursements.” The information is needed because the committee is “likely to consider proposals to reform” the fund, the letter said. The data sought include an updated list of the top 10 recipients in the high-cost program in 2006, 2007 and 2008; a state-by-state list of total disbursements to the top 10 recipients; an updated list of the 10 largest per-line subsidies for each study area; a list of competitive eligible telecommunications carriers and the total support they receive in the study areas from 2006 to 2008; a state-by-state list of total USF high-cost support payments; and a state-by-state list of ETCs and the names of the carriers. The deadline for producing the information is April 23. Ranking member Joe Barton of Texas signed the letter, along with the leaders of the Communications subcommittee.
Regulations such as a la carte and net neutrality won’t help consumers and should be opposed, Senate Commerce Committee ranking member Kay Hutchison of Texas told the NCTA convention. “I want to hold back on regulations that are going to stifle innovation,” she said. “I am very skeptical about Congress being able to do it right.” Minority House Whip Eric Cantor of Virginia delivered a similar but broader message at an NCTA lunch: “You don’t need to over-regulate. You need smart regulation.”
Companies should only have to pay universal service for the local transmission line aspects of multi-protocol label switching, said Masergy Communications. The FCC added MPLS to the list of telecom services subject to USF contribution in this year’s Form 499-A. In a petition Friday, the international network operator asked the FCC to clarify the form’s instructions to explain what aspects of MPLS are subject to USF contribution. “In addition to a transmission component which can be included, MPLS is, among other things, a traffic information management service that can be sold and marketed separately from transmission and access services,” Masergy said. Information services aren’t subject to USF contributions, it said.