JOINT BOARD BACKS NO CHANGES IN UNIVERSAL SERVICE DEFINITION

In one of most significant decisions, board recommended not adding advanced or high-speed services to list of eligible services, which drew disagreement from FCC Comr. Copps and expression of concern from his colleague Comr. Martin. Since final decision will be made by full FCC, their statements indicate this could be disputed issue. Using FCC’s terms, Joint Board defined “advanced services” as those with upstream and downstream transmission speed of more than 200 kbps. It also used FCC’s definition of “high-speed” services -- those with more than 200 kbps in at least one direction.

Joint Board said it recognized that advanced services could be “extremely beneficial” to consumers but said such services didn’t meet several important statutory requirements: (1) Advanced services didn’t appear to be “essential” for public access to Internet resources such as education, public health, public service. Joint Board said such Internet resources were “readily accessible through alternative means, such as by voice telephone or dial-up connections to the Internet.” (2) Advanced services weren’t subscribed to by substantial majority of residential consumers even though they were deployed by many carriers. (3) Adding advanced services “would be contrary to the public interest due to the high cost of requiring the deployment of such services.” (4) Adding advanced services to eligibility list could strip some carriers of universal service support they now received for other services. To get universal service funding, carrier must provide all eligible services to customers. If advanced services are added to list of eligible services, and small wireline LECs or wireless carriers aren’t capable of providing them, those carriers could lose all of their current support, board said.

Copps said he disagreed with premise that Internet resources could be accessed by other means such as voice telephone and dial-up. “By this same logic, maybe telephones should never have been deemed essential because we had the telegraph,” Copps said in statement explaining why he dissented from part of Joint Board’s recommendation. He said he also was concerned about report’s conclusion that if FCC were to adopt its tentative conclusion that broadband Internet access was information service, “then broadband Internet access could never be supported by universal service.” Copps said if that were outcome of FCC’s pending rulemaking on wireline broadband service, “the damage could be irreparable.”

Martin concurred in part of Joint Board’s recommendation, saying he would have supported recommendation that proceeding be held to gather more information “on how, and to what extent, federal universal service support mechanism could assist deployment of advanced services or at least removal of barriers to such deployment, particularly in rural, remote and high-cost areas throughout the country.” Martin said “Congress did not envision that services supported by universal service would remain static.” Both Copps and Mont. PSC Comr. Bob Rowe said they supported Martin’s call for conducting further proceeding on advanced services issue. Rowe also dissented from part of recommendation, saying he was concerned that it “may lead to harm to rural areas through a simplistic application of Sec. 254 [of Telecom Act] that fails to recognize the complexity of calculating cost-based universal service support.” He said that “in too many places the tone and analysis used to reach specific conclusions strike me as unintentionally adverse to rural interests.”

Board couldn’t reach decision on whether equal access to long distance providers should be added to list of eligible services. As result, it provided FCC with 2 positions on issue, with each side explaining why equal access did or didn’t meet statutory requirements. Martin, Copps and Rowe, plus W.Va. Consumer Advocate Billy Gregg, supported adding equal access to definition list. FCC Comr. Kathleen Abernathy plus state regulators N.Y. PSC Comr. Thomas Dunleavy, Fla. PSC Chmn. Lila Jaber and Alaska Regulatory Commission Comr. Nanette Thompson took opposite position. Abernathy issued statement explaining why she opposed adding equal access to funding list, saying: “In short, the arguments advanced in support of adding equal access are wrong on the law, wrong on the facts and wrong on policy.” Thompson said adding equal access basically would “limit the number of carriers able to serve the rural and remote parts of our nation and increase the cost of service.” She said that’s because carriers couldn’t receive universal service funding unless they provided all of services included in definition of universal service -- and some carriers weren’t equipped to provide equal access.

Advanced services and equal access were among numerous additions or modifications proposed by various parties. Among others turned down by board were expanded area service, prepaid calling plans, payphone lines, transport costs.