Small carriers, wireline and wireless, opposed to reverse auctions as part of Universal Service Fund overhaul could be fighting a losing battle in an effort to reverse a move in that direction by the commission. FCC Chairman Julius Genachowski appears to have at least three votes in favor of a controversial reverse auction plan, FCC and industry officials 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.
The FCC is moving forward on drafting an order on a Universal Service Fund and Intercarrier Compensation revamp and is working on accelerating the process, said Carol Mattey, deputy chief of the Wireline Bureau, during a D.C. Bar panel Wednesday. Industry panelists urged immediate action on VoIP and a more targeted USF.
Wisconsin Republicans Rep. Mark Honadel and Sen. Rich Zipperer circulated a draft bill that would update the state telecom law. The bill is expected to be introduced soon after the Tuesday deadline for co-sponsorship. Two coalitions fought over the proposed mandate on payment of intrastate access charges on VoIP.
Public safety spending on 700 MHz D-block lobbying more than quadrupled in Q1 2011 compared to the same quarter last year, according to Q1 lobbying reports. The Association of Public-Safety Communications Officials spent $80,563, 303 percent more than what the group spent in Q1 2010 and 66 percent more than Q4 2010. Meanwhile, the National Telecommunications Cooperative Association spent nearly five times what it did last year, and NTCA CEO Shirley Bloomfield said she expects the association of small rural telcos to continue spending at that level.
The FCC’s proposal to revamp the Universal Service Fund and intercarrier compensation apparently could benefit some states while hurting others, according to comments in the proceeding. But states in general supported retaining and enhancing a state role in any rewrite. The FCC is expected to complete some of the USF overhaul by late summer (see separate report in this issue).
MOUNTAIN VIEW, Calif. -- The FCC aims to adopt a universal service overhaul by August, Chairman Julius Genachowski said. “Over the next few months, we'll be able to significantly reform this program,” he said Thursday night at the Commonwealth Club civic forum. Genachowski mentioned the Universal Service Fund (USF) more than intercarrier compensation. But the matters are intertwined in a February rulemaking notice and a blog post last month by the commissioners that he discussed.
The FCC should allow an “appropriate transition” before implementing Universal Service Fund and intercarrier compensation regime reforms, Frontier Chief Legal Officer and former commissioner Kathleen Abernathy told staff in meetings earlier this week. “This transition would ensure stability during the reform and ensure that Frontier can continue investing hundreds of millions of dollars to achieve the Commission’s goal of deploying broadband to rural America,” Abernathy told Commissioner Mignon Clyburn’s adviser Angela Kronenberg, according to an ex parte notice filed on dockets 09-51, 07-135 and others.
States have concerns about a revamp of the Universal Service Fund, Indiana Utility Regulatory Commission member Larry Landis said Tuesday. The Republican supported the FCC’s undertaking a USF overhaul that could reallocate some money to broadband service. Some states are worried about how companies that rely on the high-cost part of the fund will be affected by a revamp, Landis said at an American Cable Association conference. Some providers get a large chunk of their revenue from that part of USF, he noted. “The one concern that would be shared by many of my colleagues” is that whenever intercarrier compensation and USF overhauls are done, “you are bound to have some unexpected challenges that come up,” Landis said.
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The FCC has many tools at its disposal to tackle spectrum constraints, whether it’s improving spectrum efficiency or freeing up more spectrum, Wireless Bureau Chief Ruth Milkman said at the Wireless Communications Association conference. The commission is looking at spectrum sharing and harmonization opportunities, and is willing to work with industry to come up with a solution to better inform consumers on throughput, she said Wednesday. It takes time to bring spectrum to auction, so “we have to start now” to avoid a spectrum crunch that will result in poor quality of service for consumers, Milkman said.