VoIP Providers Tell FCC Not to Waste Time on Interim USF Funding Changes
More interim changes to the Universal Service Fund (USF) contributions system simply will delay reform, VoIP providers and others told the FCC in comments filed Wed. The FCC in a June order making interim fixes (CD June 22 p1), asked if more temporary changes were due. Commenters told the FCC not to waste time on interim fixes but to replace the revenue- based system.
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Short-term fixes mark a “squandered opportunity for real reform,” Vonage said: “Universal Service must be fixed not patched… Fundamental reform is too important an issue to be back-burnered by yet more talk about half-measures.” The VON Coalition warned that “the very act of seeking further comment on the interim requirements undercuts the Commission’s commitment to comprehensive universal service reform.”
A numbers-based system, such as FCC Chmn. Martin backs, would cut the administrative burden on both VoIP providers and the FCC, said the Ia. Utilities Board. Today’s system, based on interstate revenue, “will become increasingly difficult to manage,” especially now that VoIP providers are in the pool, the state regulatory body said. “The principle advantage to small providers [of basing contributions on how many phone numbers are used] is ease in administrative use,” the Small Business Administration’s Advocacy Office said: “The paperwork would be reduced to reporting the number of telephone numbers used. There would no longer be any accounting complications for what is interstate telecommunications revenue.”
The June 21 FCC vote added VoIP providers to the USF pool and set a “safe harbor” of 64.9% for VoIP providers to use if they don’t break out interstate revenue. The safe harbor amounts to a proxy percent of interstate revenue. The order raised the wireless safe harbor from 28.5% to 37.1%.
“The Commission should not waste its time on further interim USF solutions that merely serve to shore up a contributions mechanism that operates under an outdated and unsustainable methodology,” the Information Technology Industry Council said: “Instead it should promptly adopt comprehensive universal service contribution reform that assesses a flat fee on end users based on working telephone numbers.”
The “revenue-based methodology is already outmoded and not suitable for a competitive marketplace in which interstate and intrastate calls are offered to customers at a single rate,” NCTA said. The cable group said “if USF contributions are to be required of interconnected VoIP providers -- as they should -- the Commission should, as quickly as possible, replace that methodology with a number- based approach.” But any interim revisions should include changes to the VoIP safe harbor “to reflect the fact that cable VoIP service is more like bundled local and long distance wireline telephone service than like wireline toll service,” NCTA said.
Some changes in the interim rules might be good, but the FCC “cannot allow this proceeding to divert it from the task of fundamental reform,” AT&T said: “Rather than expending significant time and resources on tweaking the existing revenue-based contribution methodology, the Commission should focus its energy and attention on real, comprehensive reform by adopting a numbers/connections-based contribution methodology.”
The FCC should focus on reform, not “spend considerable resources on further modifications to the current system,” said USTelecom. “The modifications adopted in the [June] order were intended to be interim measures that preserved stability and competitive neutrality while the Commission finished comprehensive reform,” USTelecom said.