Cable Association Blasts USF/ICC Reforms Ahead of Lobbying Week
The American Cable Association made a pitch Tuesday to reduce the first refusal rights in the pending universal service reform order. Association officials and members said they were heading into ex parte meetings with FCC staff this week, but were put off by Chairman Julius Genachowski’s remarks announcing the order (CD Oct 7 p1). “Thursday, we heard the speech and in there it’s clear that the chairman anticipates providing some level of right of first refusal,” ACA President Matthew Polka said in a conference call with reporters Tuesday. “We feel confident about our concerns about where the commission is heading.”
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Telecom lawyers and observers said the proposed order adopts most of the incumbent-backed ABC plan, but staff is apparently open to whittling down the controversial right-of-first-refusal proposals and may reconsider the length of transition to a broadband fund. The cable leaders in Tuesday’s call said it wasn’t enough because the proposed order doesn’t adopt a hard cap on the fund and because any level of first refusal will “lock out” cable competitors. “The current fund is set at $4.5 billion,” Polka said. “We believe that there’s enough money in there to meet the needs of the commission to deploy broadband."
The Senate Commerce Committee will hear testimony on the proposed universal service and intercarrier compensation system reforms Wednesday. Telecom lobbyists said they didn’t expect surprises during the hearing, so the focus is on the FCC. Cable, wireless, state regulators and consumer groups have all opposed the ABC plan, but analysts have said consumer groups have the best chance of derailing the incumbent-backed plan.
Consumer groups have become more vocal in recent weeks. Monday, Public Knowledge Legal Director Harold Feld met with Zac Katz, Genachowski’s wireline adviser. Speaking on the proposed subscriber line charges, Feld said it was “better to have subsidies be open and acknowledged through SLCs [subscriber line charges] rather than hidden in the ICC rates and thus subject to fraud and arbitrage,” according to an ex parte notice released Tuesday (http://xrl.us/bmfu5k).
"At the same time, PK cautioned that the ABC proposal to simply substitute SLCs for existing ICC subsidies, while preempting state oversight, would be profoundly anti-consumer,” Feld added. “In particular, the Commission must be alert to the concerns of consumer groups that in many places consumers do not have a choice of carrier, and that preempting local authority as suggested by the ABC plan is an invitation to carriers to exercise market power in those markets where voice service remains less than fully competitive.”
Incumbents have been worried that the consumer groups’ complaints are getting traction, particularly with Commissioners Michael Copps and Mignon Clyburn. On Monday, the six incumbent companies behind the ABC plan hyped the consumer benefits that they said will flow from adopting their plan (http://xrl.us/bmfu5z). The universal service reforms will create a “consumer surplus” of nearly $1 billion per year, bring broadband to 4 million households that are currently without it, create hundreds of thousands of new jobs and lead to “untold increases in economic development, education, healthcare, and social interactions from increased broadband deployment,” the incumbents said in their joint letter to Genachowski and the other three commissioners.