”The odds favor” the FCC adopting the USTelecom-brokered agreement on...

It “would be a neutral-to-positive” for publicly-owned, mid-sized rural carriers such as Frontier, CenturyLink and Windstream, Gallant said. “We also believe the plan would be a boost for AT&T and Verizon by reducing their overall payments into the federal and state subsidy mechanisms.” Despite some opposition, he expects the commission to adopt the USTelecom-brokered deal more or less as-is because FCC Chairman Julius Genachowski has made USF and intercarrier comp reforms “a centerpiece of his National Broadband Plan” and the framework “would redirect federal subsidies from voice to broadband buildout, which is what the Broadband Plan called for.” Also, he said the proposal “has the support of a strong coalition” and Gallant “would not be surprised if it gained additional support” in the next few weeks, and “key legislators have indicated that the FCC is better suited than Congress to reform USF/ICC because of the level of detail required for reform. Congress’s key asks are that rural and urban interests are both clearly recognized, and that the overall USF … not grow larger -- and ideally shrink over time. We think the FCC’s final rules this Fall are likely to satisfy those criteria."