NTCA CEO Michael Brunner wrote members of the House and Senate Agriculture committees asking them to commit to preserving the Universal Service Fund (USF). The letter, dated March 6, emphasized that the USF worked “in tandem” with the Rural Utilities Service telecom loan program, but said FCC action could harm USF. “Actions by the FCC are threatening the viability of the program by failing to recognize the impact that a reduction, or loss, of universal service support may have on rural carriers,” the letter said. “The impact of these actions could result in rising costs of service for rural carriers and higher rates for rural consumers.”
The FCC Wireline Bureau proposed a universal service contribution factor for the 2nd quarter that it expected to result in lower line charges on long distance customers’ bills, although wireless subscribers weren’t likely to see similar short-term relief. The 2nd-quarter contribution factor for the first time reflects a system based on providers’ projections of collected end-user revenue instead of on historical billing data. The proposed contribution factor would be 9.0044%, which an industry source said was the highest to date and resulted from a series of interim changes adopted by the FCC while it studied broader modifications.
Verizon agreed to pay $5.7 million to U.S. Treasury to settle FCC investigation into violations of Telecom Act ban on Bell companies’ providing long distance service before receiving authority from FCC. Commission announced it had entered into consent decree with Verizon in which company admitted it had marketed long distance in its local service region on 5 occasions in Jan.-July 2002 through cable TV ads, bill inserts and direct mail solicitations. FCC Chmn. Powell said action demonstrated agency’s “commitment to deterring companies from entering the market prematurely.”
OPASTCO said Tues. it was upset with way many state PUCs were allowing competitive carriers to receive Universal Service Fund (USF). Group said it would start pushing message to Congress that states were straying from congressional intent of Telecom Act of 1996 and that FCC needed more oversight of PUCs. With OPASTCO members in Washington for annual legislative and regulatory conference, many were planning to meet with members of Congress this week in attempt to put more focus on USF issues, particularly designations of eligible telecom carrier (ETC) by state PUCs.
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.