Comcast Likely to Sign onto USF FCC Filing, Tauke Says

The talks are continuing, but other mid-sized and smaller, rural carriers find themselves on the outside looking in, telecom lobbyists told us. Those companies are worried that the “framework” will be cut-and-pasted into Chairman Julius Genachowski’s final order, they said. In meetings with industry, his staff has made clear that they want to cap USF, several lobbyists said. He and his staff have also been pressuring USTelecom to come up with some kind of agreement and get it filed publicly as soon as possible, the lobbyists said. A commission spokesman had no comment on McDowell’s remarks, beyond referring us to Genachowski’s previous statement that work on USF and intercarrier compensation is “in the homestretch” (CD July 13 p4).

The framework is expected to be filed jointly by the agreeing companies -- Verizon, AT&T, Comcast, Frontier, CenturyLink, and Windstream -- but it won’t be signed by USTelecom, several lobbyists told us. The trade association continues to host discussions, now trying to get smaller carriers to sign on to the framework.

TDS is “doing all we can to assist the inter-industry dialogues (where we can and have been asked),” Vice President Andrew Petersen said by email. The USTelecom talks are focused “on advancing their members’ positions, namely AT&T and [Verizon] and several of the price-cap mids,” he said. “Obviously,” Petersen said, “it remains paramount that companies like TDS, that actually invest in and provide service to the locations in rural America … have a direct say in the outcome of how the USF and ICC reforms contemplated in the NBP are advanced,” he said of the National Broadband Plan. “We remain optimistic [that] this process will take into consideration the viewpoints and experiences we have servicing these difficult, high-cost areas and the dynamics that must be considered to maintain successful investment incentives for these locations. For the FCC to overlook these insights, which we hope they won’t, would be a travesty for all who have worked so hard to get us to a point of reform so far."

The pending USF reforms will “change the focus” from telephony to broadband, Tauke told the MMTC conference. “We frankly don’t have a problem” getting wireline phone service deployed, he said: “We've mapped the country, so we know where people without broadband live.” It will be “complex” to make sure “everyone has universal access to broadband,” Tauke said: “Getting this through the commission this year will be a giant” step. Spokespeople for AT&T and Comcast had no comment on the forthcoming USF filing.

That USF is “a very thorny issue” shouldn’t delay the forthcoming order from being circulated at the commission and voted on, McDowell said in response to our question. “You can’t make everyone happy” and “you have to do the right thing” on the issue, he continued. One reason it’s been about a dozen years since the commission last acted on USF is that it has tried not to unduly upset stakeholders, McDowell said. With it “difficult for Congress to pass comprehensive USF legislation,” that’s “where the FCC steps in,” he said: “We should be able to get on with it."

McDowell expanded on his concerns of further delay in getting a USF order (CD July 18 p6). The item was initially going to have been voted on at the Aug. 9 commission meeting, then possibly in September, and now perhaps in October, he said. “I've just seen opportunities slip away from us before,” including in the waning days of Kevin Martin’s chairmanship in 2008, McDowell said. “It’s a little bit like post-traumatic stress disorder” for McDowell, he said.

The need to expand broadband deployment was discussed by AT&T Senior Executive Vice President Jim Cicconi and Comcast Vice President Bret Perkins. Their remarks came on the panel with Tauke, but not about USF. Cicconi also defended AT&T’s plan to buy T-Mobile, a deal that’s the first to have been supported by the MMTC.

Cicconi addressed what he said is some of opponents’ “rhetoric” against AT&T/T-Mobile, as he and other panelists talked about their employers’ diversity initiatives. Thirty-nine percent of AT&T employees are minorities, and last year the company spent $9.2 billion with minority-owned suppliers, Cicconi said. Verizon, with $18 billion in capital spending in the past year, is “plowing money back into the system,” Tauke said. “And a quarter of that is going to minority firms.” Comcast is “maturing” when it comes to increasing the diversity of its suppliers, with such business having risen to 13 percent of spending from about 7 percent seven years ago, Perkins said. He compared Comcast to a teenager with “some acne,” and part of growing up “is how we support diverse endeavors."

Cicconi cited FCC figures to make the case that wireless competition is increasing, as AT&T seeks approval from the agency and Justice Department to buy T-Mobile for about $39 billion. With about 90 percent of Americans able to buy service from five carriers, “competition is actually growing,” he said. Choices in providers “are there” and “people are exercising their choices,” Cicconi said, responding to a question from MMTC board member Deborah Lathen on how AT&T/T-Mobile will continue to make sure those with little money can buy service. “T-Mobile is sort of the poor person’s” cellphone, she said. “What can we expect post-deal, so people still can afford wireless service?”