The FCC broadband task force is considering some cuts for the Universal Service Fund that it will recommend in the National Broadband Plan due in February, a commission official said Wednesday. The FCC wants to change the focus of USF to broadband, but realizes simply adding broadband as a supported service would raise the already exorbitant contribution factor that carriers use to pay into the fund, the official said. Commissioners haven’t seen the proposals, but some industry players are already sounding alarm bells. FCC eighth floor staff were briefed on several aspects of the broadband plan as it is evolving late Wednesday, but were asked not to share the details.
A Universal Service Fund overhaul should be “calibrated to ensure the equitable treatment of satellite” services, which have an important role in broadband policy and public safety, Iridium Satellite said in comments to the FCC. The current USF contribution process is too complex and expensive to run and needs revamping, it said. Iridium asked the FCC not to charge business services based on “assessable numbers” and “assessable connections” and said if it does take that approach it should ensure that the charges don’t unfairly burden satellite providers. Increased USF fees would probably hurt the growth of satellite services in underserved regions, the company said. New rules should also take into account the “global nature of many satellite networks and avoid overly broad definitions that would inappropriately extend the reach of the United States USF fee to users or entities not under its jurisdiction,” Iridium said.
The Telecommunications Industry Association asked the FCC to remake the Universal Service Fund into a broadband fund, in comments on National Broadband Plan Public Notice #19, on USF and intercarrier compensation issues. Five mid- sized incumbent telcos offered a proposal for revamping both. Most filers agreed that USF and ICC overhauls should be included in the plan, due to be submitted to Congress in February. Many comments built on those filed in previous comment rounds.
Small cable operators’ lobbying group proposed to cap the Universal Service and the high-cost fund at their Dec. 31, 2009, levels. A new broadband fund for unserved and underserved areas should be created, said the group, the American Cable Association, in comments to the FCC on the role of the USF in the National Broadband Plan. (See the separate report in this issue.) The plan “evolves and reforms Universal Service to support broadband in an efficient non-discriminatory manner where 1) one industry segment is not favored over another and 2) one technology is not favored over another,” said the filing Monday. “ACA supports the consideration of a Universal Service mechanism to fund broadband but only if it is competitively and technologically neutral and is precisely targeted to users that lack access in areas that are unserved or underserved.”
The FCC wants comment on NCTA’s Universal Service Fund proposal, which would set up a two-step process for those interested to ask the FCC to reconsider USF high-cost support levels for particular places (CD Dec 7 p13). Comments are due Jan. 7, replies Jan. 22.
The FCC shares the goal that Universal Service Fund audits “be efficient and not unduly burdensome” on small rural telcos, Chairman Julius Genachowski said. In a letter last month to Sen. Jeff Merkley, D-Ore., Genachowski said the commission is “aware that recent audits of beneficiaries have at times been complicated by miscommunications between the auditors and the beneficiaries and that the audit findings may not have always provided meaningful results. The FCC is seeking to remedy these concerns and to establish a USF audit program that best meets the FCC’s oversight needs and incorporates lessons learned from previous audits.” The commission began an inquiry on USF administration in September 2008 and is reviewing the record, the chairman added.
FCC Commissioner Meredith Baker wants a spectrum policy plan that’s not just a “subset” of the National Broadband Plan, she said at a Phoenix Center event Thursday. The “cross-governmental long-term strategic framework” on spectrum “should be one of our major efforts of 2010 and should chart the government’s course well into the decade,” she said. The plan would include a spectrum inventory and a review of secondary market rules, she said. “By taking full stock of our spectrum resources and how they are being used, and adapting secondary market and service rules to the changed conditions and technologies we have today, I think we can make great strides to help ensure that the U.S. consumers are the beneficiaries of a world-class mobile broadband infrastructure.”
Conflicts among state universal service assessment methods for VoIP necessitate a single national policy, Vonage said. The FCC can address existing conflicts and prevent new ones “by permitting providers to allocate subscribers’ revenues among the states on the basis of any reasonable data, including place of primary use, billing address, phone number, or E911 location, so long as the provider uses the same basis for all customers,” the company said. The approach “would allow providers to use assessment methods that are consistent with existing billing systems,” and would be less confusing for consumers, it said. “Granting providers flexibility to choose assessment bases (so long as the same basis is used for all customers) would allow providers to use the same basis for state USF obligations as for state sales or other tax obligations, and thereby avoid the customer confusion that would arise if customer bills were to show taxes from one state and state USF pass-throughs from another.” Opening a rulemaking is the fastest path to a national policy, Vonage said. States have urged the commission to reject the company’s proposal (CD Nov 3 p8).
The FCC will soon issue a further notice of proposed rulemaking on Universal Service Fund high-cost support for non-rural carriers like Qwest, said two agency officials. The commission committed to release a rulemaking notice by Dec. 15 and a final order by April 16, as it works toward responding to a 2005 remand by the 10th U.S. Circuit Court of Appeals (CD June 11 p7). 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. FCC Chairman Julius Genachowski last week circulated the notice, which contains tentative conclusions, agency officials said. One described the tentative conclusions as very bare with “not a lot of new ideas,” and said the further rulemaking notice seems designed as a “punt.” Commission spokeswoman Jen Howard declined to comment. Meanwhile, industry meetings with the FCC on a comprehensive USF overhaul have been heating up (CD Nov 27 p5). The impetus seems to be the non-rural support item and an expectation among industry that the regulator will tee up reform in the National Broadband Plan due this February, agency officials said. Monday, Windstream phoned an aide to Genachowski about the agency’s rulemaking notice on the 10th Circuit remand, urging the FCC to seek input on how to better target federal universal service support directly to granular high-cost areas, an ex-parte filing said. Windstream said the FCC should stop distinguishing between rural and non-rural carriers, and kill eligibility requirements based on statewide average costs. President John Rose of the Organization for the Promotion & Advancement of Small Telecommunications Companies met separately Monday with aides to Commissioners Michael Copps, Robert McDowell and Meredith Baker, said an ex-parte filing. The meetings focused on USF and intercarrier compensation reform “in the context of” the plan, OPASTCO said.
CTIA weighed in for the first time on Local Switching Support. The association called for comprehensive changes in the Universal Service Fund and opposed what it called a “backward-looking petition” by the Coalition for Equity in Switching Support. FCC Chairman Julius Genachowski circulated a draft notice of proposed rulemaking that tentatively concluded incumbent local exchange carriers should get additional universal service support under the LSS mechanism if they lose a significant number of access line customers (CD Oct 13 p8). But the commission asked for more data before it makes a final decision.