Cable Heads for Hill to Lobby on ABC’s Right of First Refusal Plans
Cable advocates have taken their fight against the right-of-first-refusal provisions in America’s Broadband Connectivity plan to Capitol Hill, hoping to keep Congress from supporting the incumbent-backed plan, NCTA Executive Vice President James Assey told us Wednesday. President Michael Powell and Comcast/NBC Universal Washington President Kyle McSlarrow have been pressing their cases on the Hill. The goal is to keep legislators from signing incumbent-circulated letters to the FCC supporting the ABC plan, he said.
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"We have a perspective on this and we feel our perspective is not completely reflected in what’s been proposed,” Assey said. “We're really in education mode.” Cable supports most of the ABC plan, but objects to the right-of-first-refusal clauses, the long transition to uniform rates and the lack of a cap on the Universal Service Fund (CD Sept 15 p2). NCTA took a similar message to Zac Katz, FCC Chairman Julius Genachowski’s aide on universal service, and top officials in the Wireline Bureau, said an ex parte notice released Wednesday (http://xrl.us/bmd3pw).
Charter Communications circulated its own letter, urging legislators not to support the ABC plan. “The cable industry was not involved in crafting this proposal and believes further changes are needed to achieve reforms that are fiscally responsible and competitively neutral,” it said. “The cable industry, the largest provider of residential broadband in the country, is a strong supporter of reforming the USF and transforming it into a broadband focused program. However, we feel the telco’s ABC plan is missing some key elements and needs to be modified. ... By not firmly capping the high-cost fund, the ABC plan is **not fiscally responsible** and could allow the fund to continue to balloon well past it’s [sic] current $4.5 billion level. USF is 15 percent of telephone bills right now and that will only grow as well. By including certain provisions as a telco ‘right of first refusal’ for USF support, the ABC plan is not competitively or technologically neutral. Instead it is competitively skewed towards the very companies that authored the plan."
"Charter remains optimistic that government will do the right thing for consumers,” a spokeswoman for the cable operator said. “We've focused our lobbying efforts toward the FCC, and our approach on the Hill has been consistent with NCTA’s approach.” The spokeswoman said Charter executives met Wednesday with Rep. Marsha Blackburn, R-Tenn. She “understood our position, but is waiting to see specifics of the FCC plan -- not the ABC plan,” the spokeswoman said.
The cable industry’s Hill efforts appear to be gaining traction, two telecom lobbyists said Wednesday. No more Congressional letters in support of the ABC plan have come out and staffers have asked pointed questions about right-of-first-refusal in their meetings with incumbents, the lobbyists said. The incumbents are lobbying the FCC, on the other hand, that the right-of-first-refusal option, which would apply to nearly 80 percent of the USF cash under the ABC plan, would provide maximum broadband penetration in the U.S., a telecom lawyer said. Incumbent executives briefed Senate Commerce Committee staff on the ABC plan Wednesday, but one telecom official who attended said the questions were open-ended and not hostile.
Several industry officials still expect the FCC to issue an order on USF and intercarrier compensation at the Oct. 27 open meeting, they said. A commission spokesman said staff is working hard to bring forward an USF/ICC issue “soon."
Other sectors of industry have turned up the heat on the proposals as well. “Every industry segment other than telephone companies is against the ABC plan as bad policy,” said Lisa Scalpone, general counsel at WildBlue. Those segments -- wireless, satellite, cable and technology companies -- all say the proposal is “bad for consumers and will lead to a higher contribution burden,” she said. “This is not a consensus proposal and broadband is no longer provided just from the telephone companies.” Under the competition-based program, which satellite broadband companies have pushed, satellite broadband could win up to 46 percent of U.S. households slated for USF support, she said.
A Tuesday letter from the Rural Carriers Association and satellite broadband providers (http://xrl.us/bmd3n2) to the FCC commissioners voiced complaints on the ABC and RLEC plans and listed what the groups feel should be the guiding principles of reform. Among the necessary principles is a competitively and technologically neutral high-cost support mechanism and the targeted distribution of funds to where they are actually needed, the letter said. “We strongly oppose adoption of the ABC Plan or the RLEC Plan, because neither is consistent with the above principles” and either create “absurd and market-distorting results,” the letter said.
Wireless, satellite and cable have been talking about ways of coalescing their resistance to the ABC plan, NCTA spokesman Brian Dietz said by email. “We have and will continue to talk with a variety of groups that have a shared interest in accomplishing meaningful reform,” he said. “We agree with many of the principles in the RCA/satellite letter and submitted a joint letter with ACA to the FCC Chairman in August that sets out similar reform principles.”