Promised FCC deadlines for Universal Service Fund and intercarrier compensation regime reform have been pushed back and Commissioner Robert McDowell said he’s worried that reforms may “slip away.” In an appearance on C-SPAN’s The Communicators, he said “I get concerned when I see dates continue to slip away.” And “I've seen this movie before,” he said in the videotaped interview.
The Universal Service Fund “is not materially increased by requiring very small companies to contribute,” the American Association of Paging Carriers said in a telephone conference with Wireline Bureau staff. The association “pointed out that the exemption level of $10,000 has remained unchanged since the USF was implemented as a result of the Telecommunications Act of 1996,” according to an ex parte released Thursday in docket 09-229. “AAPC further noted that some of its members include small companies with paging service revenues of less than $1 million,” the group said. “Using the 12% ’safe harbor’ interstate allocation allowed by the Commission, the contribution factor of 5.9% for the first quarter of 2000 exempted carriers from contributing to USF until they generated approximately $1.425 million in total service revenues. However, using the ’safe harbor’ allocation during the current quarter, the contribution factor of 14.4% requires contributions from carriers with as little as $590,000 in total service revenues. Similarly, the highest contribution factor to date (15.5%, during the first quarter of 2011) required carriers using the ’safe harbor’ allocation to contribute to USF with as little as $538,000 in total service revenues."
Congress will finish off Universal Service Fund reform, Rep. Lee Terry, R-Neb., said at a press conference Thursday kicking off rural telecom associations’ marketing push on rural broadband. Terry said he’s “extremely optimistic” there will be a deal by the end of August that’s supported by industry, the FCC and the House Commerce Committee. Also at the event, Sen. Mark Begich, D-Alaska, predicted that the Senate will get “very aggressive” on the issue.
The FCC must not remove state jurisdiction over intrastate communications and preserve the joint governmental structure in its Universal Service Fund and Intercarrier Compensation proceeding, state officials said during a seminar held by the National Regulatory Research Institute Wednesday. Other top concerns for state regulators include cost and contribution methods, they said.
House Republicans are thinking about using the Universal Service Fund to help pay down the budget deficit, Congressional documents show and Hill and industry officials told us. Majority Leader Eric Cantor, R-Va., circulated a slide presentation among his colleagues Tuesday that contained cuts and savings proposed in talks with Vice President Joe Biden, including between $20 billion and $25 billion in “spectrum/USF” savings.
The FCC is in the “home stretch” of its Universal Service Fund and intercarrier compensation regime overhaul, Chairman Julius Genachowski said Tuesday. Speaking after the commission’s monthly meeting, Genachowski said he didn’t “think it’s news” that the relevant orders won’t be ready in August, given his aides have said the same (CD June 16 p2). Genachowski said he’s confident that orders are coming soon. “The staff is working very hard,” he said at a news conference. “The stakeholders are working very hard.” It’s “very important” that USF is retooled for Internet service “in a way that tackles inefficiency” and “waste,” as well as closes “the rural-urban divide” and meets U.S. broadband goals, Genachowski said.
The FCC turned aside NTCA’s request for a clarification or waiver that would have allowed rate-of-return carriers to pass on the costs of federal Universal Service Fund audits to the interstate jurisdiction. “We find that the rule does not need clarification and that NTCA has not demonstrated that good cause warrants waiver of this rule to allow rate-of-return incumbent LECs to directly assign the costs associated with these audits to the interstate jurisdiction,” Wireline Bureau Chief Sharon Gillett said in Thursday’s order, posted to docket 80-286.
The FCC should “not jeopardize the ongoing viability” of rural broadband in its Universal Service Fund and intercarrier compensation regime overhauls, a Louisiana regulator said in an ex parte letter posted to docket 10-90 and released Thursday. “Any reforms to the existing USF High-Cost and ICC mechanisms adopted by the FCC should not compromise the Rural Telephone Companies’ ability to continue to deploy the capital necessary to offer broadband telecommunications and information services,” said Louisiana Public Service Commissioner Jimmy Field in a letter to FCC Chairman Julius Genachowski. “Under all circumstances, the FCC should ensure that any reduction or elimination of funding does not affect the ability of the rural incumbent carriers to recover existing investments made under current rules.” Rural telcos have promised to “pull out all the stops” in an effort to ward off what they consider threats to their survival in the pending reforms (CD July 5 p6). Field said: “Many of the proposals outlined in the FCC’s USF and ICC NPRM, if adopted, could jeopardize universal service in the rural areas of Louisiana. In particular, the short-term reforms to the current USF rules proposed in the NPRM, together with the potential direction of ICC reform, risk substantial rate increases for rural consumers in Louisiana, and may cause the quality of broadband service in rural areas of Louisiana to fall behind the rest of the nation.”
A revamped Universal Service Fund should prioritize areas “without any broadband or where no provider offers service at a baseline level of transmission speed” determined by the FCC, said Senate Communications Subcommittee Chairman John Kerry, D-Mass., and Sen. Mark Warner, D-Va. In a Tuesday letter to FCC Chairman Julius Genachowski, the senators also urged that USF support broadband on a technology-neutral basis and include strong accountability and oversight. The fund should support “areas that are least likely to be built out over the next three-to-five years because their geographic and/or demographic profile make them insufficiently profitable based on commercial business models,” Kerry and Warner wrote. The FCC should annually update what constitutes a baseline level of service and “set goals for minimum target speeds for broadband that would be required to qualify for funding,” they said. To better target broadband funding, the FCC should require states to disaggregate study areas, the senators said. And the agency should cap spending “to provide an incentive for service providers to devise lower cost solutions that meet nationwide needs for both fixed and mobile broadband,” they said. “Funding should require a match from service providers and should be conditioned on reasonable access and interconnection requirements.
Large and mid-size telcos have moved closer together on Universal Service Fund and intercarrier compensation regime reforms, but several questions remain -- as does the gulf between small rural carriers and the rest of industry, the public record shows and FCC officials told us. Executives from USTelecom, Windstream, CenturyLink, AT&T and Frontier met with wireline advisers to three commissioners last week, USTelecom Vice President Jonathan Banks said in an ex parte notice filed late Friday. The executives were invited in by the staffers, two FCC officials said. The executives said they have agreed in principle to reforms that roll out in stages over several years, the officials said.