Wireless has already faced deep cuts in universal support and the goal of the FCC now should be to encourage more deployment of mobile broadband, CTIA said in replies on an inquiry and rulemaking on changes to the high-cost universal service program. As a result of the 2008 cap on support for competitive eligible telecom carriers, wireless carriers and other CETCs have already lost $800 million in funding, the group said. The notices follow up on recommendations in the National Broadband Plan that the Universal Service Fund be restructured to pay for broadband.
Issuing a retroactive declaratory ruling is “the least transparent way” of addressing the states’ request to charge Universal Service Fund fees to interconnected VoIP providers, said Vonage in a meeting with the FCC Tuesday. Vonage said the “regulatory certainty” which the commission offered in its 2004 preemption order should not be undermined by the FCC’s consideration of a petition from the Kansas and Nebraska commissions. Furthermore, any imposition of retroactive USF obligations would be “manifestly unjust and unlawful,” the company said. The Voice on the Net Coalition also opposed a retroactive declaratory ruling on interconnected VoIP regulation in a subsequent meeting with the FCC Wednesday. The group urged the FCC to launch a rulemaking to limit states’ powers to charge USF fees, it said. To make any declaratory ruling that betrays the “Vonage Preemption Order” would hurt consumers and prevent the innovation and growth of the VoIP industry, the VON Coalition said. Instead, the FCC should seek comment on the best way to assess state USF fees and how much it would cost VoIP providers to modify their billing systems to account for USF fees, said the VON Coalition. Furthermore, any rulemaking should not be imposed retroactively, the group said, because VoIP providers would be unable to collect fees directly from past customers.
The FCC shouldn’t subject VoIP to state universal service fees without first seeking comment, said House Commerce Committee Ranking Member Joe Barton, R-Texas, and Communications Subcommittee Ranking Member Cliff Stearns, R-Fla. In a letter Tuesday to Genachowski, the Republicans said the FCC should “afford this issue due consideration in a notice of proposed rulemaking, rather than just address it in a declaratory ruling.” Levying state fees “would alter settled expectations and could have a significant impact on investment, economic growth, and broader universal service reform,” they said. “Addressing this in a declaratory ruling would not only provide short shrift to a matter of consequence, it could also raise additional issues about retroactive applicability of such fees.” The FCC circulated an item July 22 responding to a petition by the Nebraska Public Service Commission and the Kansas Corporation Commission for declaratory ruling that states may assess Universal Service Fund (USF) fees on VoIP intrastate revenue (CD Aug 9 p9). States “disagree with any suggestion that a rulemaking is necessary,” said Brad Ramsay, general counsel of the National Association of Regulatory Utility Commissioners. Vonage has stated it doesn’t object to paying state USF fees, and the FCC previously agreed that the statute requires Vonage to pay, he said. “Blocking these assessments can only increase pressure on the already burdened federal USF programs."
The FCC should formally deny states’ regulatory authority over entry, rates and other conditions of VoIP services, said a group of 12 Internet, telecom and VoIP companies, Thursday. Google, AT&T, Verizon, Skype, Microsoft and eight other companies and associations asked the FCC to “exercise caution” as it considered a petition filed by the Kansas and Nebraska commissions to require interconnected VoIP providers to pay state universal service fees.
Universal Service Fund revamp legislation recently introduced by House Communications Subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb. (CD July 23 p1) doesn’t offer much for satellite broadband providers, said industry executives. The legislation, which would create a fund to help extend Internet to the most rural regions, leaves out the technology that could expand broadband the furthest at the lowest cost, they contend.
Revamping the Universal Service Fund should be an FCC priority, said Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va. In a letter Tuesday to the commissioners, he asked the agency to “proceed with urgency” to fix problems in rural communications infrastructure exposed by the recent mining disaster in his home state. Rockefeller didn’t mention comprehensive USF legislation introduced July 22 by House Communications Subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb. (CD July 26 p3).
AT&T explained in a blog post why it’s the leading recipient of Universal Service Fund money, even as it advocates an overhaul of the program. News coverage suggesting a contradiction misses the point, wrote AT&T Vice President Hank Hultquist. “AT&T’s wireline footprint covers about 30% of the country’s rural homes, yet AT&T receives about 4% of the total USF high cost support for it doing so,” he said. “A group of smaller companies, which collectively cover about 38% of the country’s rural homes, receive almost 60% of the total USF high cost support.” Most of the wireline support that AT&T receives is for work in two states, Mississippi and Alabama, Hultquist said. “I want to be clear that AT&T is not seeking to change the fund so that it would receive support similar to that received by these smaller companies,” he said. “What AT&T has advocated for is a system where support is determined for all providers based on geographic areas relevant to investment decisions."
The Universal Service Fund must be revamped to maximize the deployment of broadband and minimize the financial burden on consumers, FCC Chairman Julius Genachowski said Wednesday. “When up to 24 million Americans don’t have access to a communications technology that is essential to participation in our 21st Century economy and democracy, I think that is unacceptable.” Speaking in Seattle to a conference of the Organization for the Promotion and Advancement of Small Telecommunications Companies, Genachowski laid out five USF reform principles.
Rural wireless carriers didn’t endorse but some may be open to Universal Service Fund overhaul legislation by House Communications Subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb. The bill (HR-5828) is backed by major wireline associations, the cable industry and AT&T and Verizon (CD July 23 p1). Some expected a competitive bidding rule to alienate rural wireless carriers that compete for USF dollars as competitive eligible telecommunications carriers. Wireless CETCs have concerns, but believe Boucher and Terry listened hard to all stakeholders and came up with a “solid compromise,” said Rural Telecommunication Group General Counsel Carri Bennet.
Wholesale carriers shouldn’t be liable for additional contributions to the Universal Service Fund when their reseller customers have provided a contribution certification, AT&T, CenturyLink, SureWest and Verizon said in replies Wednesday on a U.S. TelePacific request to review. “The E-rate Reconsideration Order is clear Commission precedent establishing that the entity responsible for causing an outstanding USF obligation is likewise responsible for remedying it,” they said. The bureau should clarify that the TelePacific order didn’t adopt new requirements for wholesale providers, the filing said. The Ad Hoc Coalition of International Telecommunications Companies asked the commission to suspend enforcement of the carrier’s carrier rule until a rulemaking is held to “vet issues and resolve industry-wide confusion.” The Universal Service Administrative Co. has overstepped its authority and it misinterprets and misapplies the rule, the coalition said. “USAC’s convoluted interpretation of the Rule and the WCB’s cryptic TelePacific Order have triggered further disputes between wholesalers and retail providers."