Rural Telcos Raise Regulatory Classification Issues in USF Reform Debate
Broadband reclassification is once again haunting the FCC’s proceedings, this time as rural telcos seize on broadband’s Title I status to lobby on Universal Service Fund reforms. The commission elected to take a Title I approach in its net neutrality order (CD Dec 2 p1), but in recent weeks, executives of rural telcos have begun to argue that proposals to roll universal service cash into a Connect America Fund for broadband will raise “a host of legal and practical complications” under Title II (CD May 9 p13).
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"It’s not that we're saying that broadband needs to be reclassified,” National Telecommunications Cooperative Association Vice President Michael Romano told us Friday. “The point is there’s a statute the commission has to look to that provides for how Universal Service Funding is to be distributed.” NTCA and other rural groups are urging the commission to adopt a tariff-for-transmission USF model that rate-of-return carriers currently use. “It’s just the most straight forward path … under the statute,” Romano said. “It could really work for anyone. Any carrier or any company who wants to do this could go out and tariff a transmission product and offer that as a common carrier product.”
Commission leaders have said repeatedly that they're in a hurry to move on universal service reform. “It’s clear that the commission unanimously believes that USF should migrate to broadband and there’s been no evidence that the commission believes that Title I classification is an impediment,” Hogan, Lovells telco lawyer Dan Brenner said Friday. Late last month a U.S. Cellular executive raised the Title II question at an FCC workshop on universal service reform. Angela Kronenberg, aide to Democratic Commissioner Mignon Clyburn, suggested that such concerns were a distraction from the real need to get high-speed broadband to the millions of Americans who are going without (CD April 28 p2).
The reclassification docket is still open, but Chairman Julius Genachowski doesn’t seem to be in the mood to revisit the matter. “We addressed that in the open Internet proceeding,” he said at news conference Thursday when asked about reclassification. “There’s no debate or discussion at that the commission on that right now."
The Connect American Fund can proceed under Title I, said American Cable Association Vice President Ross Lieberman. “At the same time, ACA believes that the Commission should create specific eligible telecommunications carrier-esque requirements for CAF recipients and not simply apply current requirements,” Lieberman said. “For example, ACA believes that recipients of CAF funding should be expected to provide forward-looking broadband speeds of 16 Mbps downstream and 4 Mbps upstream in their entire service area to meet the expected needs of the community for the term in which the operator is expected to serve. This is a higher expectation than the 4/1 speeds proposed by the Commission.”