The FCC is likely to get the Universal Service Fund revamp done in 2011, panelists said during a Regulatory 2.0 workshop Thursday. Congress should give the FCC as much flexibility as possible as it considers legislation giving the commission authority for incentive auctions for broadcast and other spectrum, they said.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
State regulators took aim at the industry-endorsed proposals for universal service and intercarrier compensation regime reforms, in reply comments on docket 10-90. Drawing the heaviest fire was the incumbent-backed America’s Broadband Connectivity plan. Regulators from Maine to Alaska blasted the proposals. State regulators have formed themselves into a task force hoping to convince the FCC that it’s too early to create uniform compensation rates (CD Sept 2 p7).
Comments continued to pour in Tuesday as the deadline for filings on industry-proposed universal service and intercarrier compensation regime changes expired. Incumbent telcos were mostly fighting a holding action, while a handful of rural carriers recommitted to fighting against the broader industry consensus. The six companies behind the so-called America’s Broadband Connectivity plan (CD Aug 1 p1) said in a statement that they had come up with a “detailed and workable proposal for fixing the outdated and unsustainable universal service and intercarrier compensation programs.” The companies -- AT&T, Verizon, Frontier, CenturyLink, Windstream and FairPoint -- added: “Adoption of the ABC Plan will lead to greater broadband deployment in rural America. The plan enjoys broad support on issues that have paralyzed the industry for years."
State regulators formed a NARUC task force hoping to convince the FCC to create financial incentives to states to lower their intercarrier compensation rates, Vermont regulator and NARUC telecom committee Chairman John Burke told us Thursday. The task force is chaired by New York Commissioner Maureen Harris, Burke said. Members of the task force hope to have recommendations before the October open meeting, when many expect the FCC to move to orders on universal service fund and intercarrier compensation regime reforms, Burke said. Some state regulators are hoping to keep the FCC from preempting state authority with the reforms, he said.
Small and mid-sized wireless carriers, cable operators and competitive local exchange carriers all criticized parts of the America’s Broadband Connectivity (ABC) plan for making major changes to the Universal Service Fund and intercarrier compensation regimes. The plan, a compromise among major telecom carriers and rural local exchange carriers, is unlikely to be approved without some changes, said industry and FCC officials. The trick for the FCC will be keeping ILECs on board while accommodating other interests (CD Aug 25 p1). The FCC also asked for comment on a “complementary” filing by rural carriers as well as proposals by the Federal-State Joint Board on USF, also discussed in many of the comments.
The adoption of the America’s Broadband Connectivity Plan (ABC Plan) for Universal Service Fund and intercarrier compensation revamp would “send us to the nearest federal court of appeals,” James Cawley, state chairman of the USF Federal/State Joint Board, told us. Most of the state commissions that filed with the FCC on the agreement oppose preemption of state role in determining USF eligibility. But Wisconsin regulators support some limited preemption of state authority and unified access charge rates.
Building a national wireless broadband network for public safety is the top telecom priority this fall for the Senate Commerce Committee, committee aides said. House Democratic and Republican staff, meanwhile, have continued discussions on spectrum legislation through the August recess, House officials said. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., also is closely watching the FCC as it attempts to overhaul the Universal Service Fund and the committee may have a hearing on the AT&T/T-Mobile deal, his spokeswoman said. Senate Republicans, meanwhile, are poised to move their Congressional Review Act rebuke of the FCC’s net neutrality order.
The longer the FCC delays in providing VoIP providers with legal certainty and consistency across their multi-state operations, the more difficult it will be to replace the “growing body of disparate state regulation with a single coherent national regime,” telecom groups said. The VON Coalition, TechAmerica, National Association of Manufacturers, Telecom Industry Association and Information Technology Council wrote the FCC Wednesday. They cited growing state efforts to regulate VoIP.
The House sponsors of last year’s Universal Service Fund overhaul bill support the FCC acting on the industry USF agreement brokered by USTelecom. Rep. Lee Terry, R-Neb., no longer plans to move USF legislation, aide Brad Schweer told us Wednesday. He said that Terry “will now be encouraging the FCC to produce details that reflect suggestions” proposed by the industry group. Terry’s former co-sponsor Rick Boucher agreed that the commission should move forward on its own.
Rural Cellular Association President Steve Berry sharply criticized the Universal Service Fund/intercarrier compensation proposal formally filed by a U.S. Telecom-organized group of carriers at the FCC Friday (CD Aug 1 p1). He argued it’s a wireline-centric plan that largely leaves wireless in the cold. Berry called the proposal “a joke.” RCA represents small to mid-sized carriers. Satellite broadband companies, who also were not part of negotiations on the proposal, also criticized it Monday. Consumer groups and states’ rights advocates expressed concerns, while executives representing small and mid-sized cable operators expressed support for elements of the plan.