Some rural telecom competitors should be exempt from the proposed...

to “competitive eligible telecommunications carriers,” or CETCs, should not apply to a few CETCs that report their own costs as a way to set the subsidies rather than rely on the incumbent telecom provider’s costs, said ETS. Few have argued against this exemption; even FCC Chairman Kevin Martin has indicated he would not oppose it, ETS said. CETCs that do calculate based incumbents’ costs, following the “identical support” rule, are the targets of the cap because their costs are rising faster, ETC said. Incumbent phone companies and the small number of CETCs reporting their own costs have caps on their Universal Service Fund payments under different rules and thus are not “part of the supposed problem that the Joint Board [on Universal Service] is trying to address,” ETC said. ETS told the FCC it was writing out of concern over opposition voiced in June comments by consultants Fred Williamson & Associates and the National Association of State Utility Consumer Advocates. ETS said both “casually suggested that the Commission should overlook this defect in the Joint Board’s proposal, and should instead rush to approve the cap without any remedial modification, notwithstanding the detrimental and illogical impact in would have on cost-based rural ETCs and on the consumers who depend on them.”