FCC should take advantage of universal service remand proceeding ...

comments on issues raised by 10th U.S. Appeals Court, Denver, in its remand last year of agency’s 9th universal service order. Commission order set mechanism for determining how much federal universal service support would go to larger ILECs but 10th Circuit in Qwest v. FCC said agency hadn’t adequately: (1) Defined Telecom Act’s requirement that support in rural areas be comparable to urban areas. (2) Explained its reasoning for setting funding benchmark at 135% of national average. (3) Provided inducements for states to implement comparable universal service policies. CUSC said last requirement was particularly important -- that FCC provide inducements for states to develop plans that conformed with Commission’s procompetitive policies. That could be done by tying availability of federal support to state efforts to adopt competitive policies, CUSC said. Under Coalition’s plan, federal support would be available only if states employed “competitively neutral rules” for designating eligibility for state and federal subsidies and assured that all intrastate subsidy mechanisms were “explicit, portable and competitively and technologically neutral.” Tenth Circuit’s decision “leaves no question that it is up to the FCC to provide direction for state efforts with respect to both federal and state universal service programs,” CUSC said. Representing incumbent telco interests in rural areas, National Telecom Co-operative Assn. (NTCA) said such inducements “should not create mandates on states that would interfere with a state’s jurisdiction over intrastate rates and services.” NTCA said it was concerned that decisions in proceeding not “affect the calculations of universal service support for rural telephone companies or hinder the rights of rate-of-return carriers to recover costs properly allocated to the interstate jurisdiction.” NTCA also urged FCC to consider disparities in rural service when it defined term “reasonably comparable” as required by court. “Today, this country does not have a fair and equitable way to reconcile differences in rates for basic local calling services,” Assn. said. Some rural companies have low basic rates but calling areas so small that they have to make long distance calls to key parts of their communities such as hospitals and schools, NTCA said. Tex. PUC said it supported idea of inducements to encourage states to implement universal service mechanisms but “states with viable universal service support mechanisms, such as Texas, should be exempt from such requirements.” Tex. PUC urged FCC not to implement “unwarranted, mandatory mechanisms” because “mandatory state inducements could impose inappropriate hardships that could disrupt the currently successful operation” of Tex. universal service fund.