Commission in ‘Home Stretch’ on USF, Intercarrier Comp Reforms, Genachowski Says
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.
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Meanwhile, USTelecom-led industry talks appear to be reaching a climax. CenturyLink and Frontier have agreed to a “potential” set of reforms that all sides are calling “a framework” (CD July 12 p11). USTelecom is expected to issue a public statement this week, two telecom officials said.
With CenturyLink and Frontier having made a separate peace with the largest carriers, smaller carriers have blitzed the FCC and the Hill, hoping to fend off what they see as a threat to their survival. “A USF funding cap would necessarily result in either ‘unfunded mandates’ or unprincipled limitations on the availability and affordability of service in high-cost areas, neither of which comports with the statutory directives for universal service,” NTCA said in an ex parte notice in docket 10-90 (http://xrl.us/bkztqt). “Furthermore, a cap or other limits would limit -- if not curtail entirely -- any new network investment and thereby undermine the long-term objective of promoting and advancing access to advanced services in rural America.”
"What is often overlooked but cannot be lost in this reform debate is that a substantial amount of USF support and ICC revenues are used today to ensure operation and upgrading of existing broadband-capable networks and to aid in the repayment of obligations relating to the financing of those existing networks,” NTCA added. “Thus, reforms that simply siphon support away from one area and redirect it to another run the real risk of undermining existing networks and harming consumers in those areas who today only receive quality, affordable services precisely because such support is available. In fact, if a USF support cap were paired with other reforms that reduce the level of USF support and intercarrier compensation ('ICC') available to sustain investments in existing networks and to upgrade those networks over time, the Commission runs the substantial risk of creating ‘newly unserved’ areas even as it seeks to solve the legitimate concerns of how best to extend broadband in areas that may be ‘unserved’ today."
Rural executives have left recent meetings with Genachowski’s staff with the impression that the chairman is intent on capping the Universal Service Fund at 2010-11 levels, as countenanced by the National Broadband Plan, a telco lobbyist said. The rural carriers continue to push their own plan for reforms, which would lower cost recovery by allowing telcos to be paid for accumulated depreciation of their networks, ex parte notices showed. The problem is that Genachowski’s staff is also focused on broadband adoption, which rural carriers interpret to mean “big cities,” the lobbyist said.