Colleges’ Universal Service Fund (USF) costs will rise “astronomically” if the FCC moves fund contributions from a revenue- to a numbers-based approach, universities and a higher education group told Communications Daily. Colleges could have to choose between removing dormitory phones and paying the drastically higher fees, they said. Either way, there will be “negative financial, technical and social impact,” said Jeri Semer, executive director of the Association for Communications Technology Professionals in Higher Education (ACUTA). FCC chairman Kevin Martin last May said he has “long favored” a numbers-based model and plans to propose to reform USF contribution this fall (CD May 15 p1).
Arguments against capping universal service subsidies to competitive carriers are based on “short-term self interest rather than long-term public interest,” OPASTCO told the FCC. “Excessive growth in the High-Cost program that is threatening its sustainability is attributable solely to competitive ETCs,” said OPASTCO in reply comments on the cap proposal. On the other hand, extending the interim cap to all rural telecom companies would “seriously threaten” wireline rural carriers, OPASTCO said. “At greatest risk would be continued service to subscribers in the most remote and highest-cost regions that may not have other reliable service options,” said the group, which represents wireline LECs.
Rep. Boucher (D-Va.) asked OPASTCO to promote his Universal Service Fund (USF) bill (HR-2054) on the Hill Wed. at the group’s legislative conference. The measure would revamp the USF program by widening the contribution base to include all those providing network connections, and expand services to pay for broadband. “We are in a hypercompetitive global market,” Boucher told OPASTCO members, stressing the importance of getting faster broadband deployment throughout the country, especially in rural areas. USF is under stress “today as never before,” Boucher said, adding that he and the bill’s chief co-sponsor, Rep. Terry (R-Neb.), have worked 3 years on “comprehensive” legislation to deal with problems in the system. Boucher’s bill has 11 co-sponsors, all but one Republicans. It has attracted support from AT&T, Qwest, Embarq and Alltel and NTCA, Boucher said, and the challenge is to encourage trade groups that like the bill to urge other lawmakers to sign up. “This bill will not be passed into law without your personal assistance,” Boucher told OPASTCO members. OPASTCO Pres. John Rose said the group applauds the bill but thinks it wise to pursue regulatory as well as legislative fixes.
FCC Chmn. Kevin Martin plans to proceed as soon as the fall on a proposal to change how telecom providers contribute to the Universal Service Fund, he said Mon. after a speech. Martin told reporters he is waiting for a U.S. Appeals Court, D.C., decision on a related universal service issue before teeing up a proposal to replace the revenue-based contribution system with one relying on phone numbers.
The FCC should avoid asking carriers for overly granular data in studying sector competition, CTIA said. The group was responding to an agency request for comments on wireless industry competition to go into the agency’s 12th Annual CMRS Competition Report. CTIA said USF money will be key to greater wireless expansion in rural America.
Cyren Call CEO Morgan O'Brien’s spectrum proposal largely could solve America’s broadband access problems and deliver a fully interoperable safety network, he said. On a Hill panel at the New America Foundation, O'Brien said Fri. he'd have more details of the proposal Mon. in a filing with the FCC. It will answer questions about how the company can succeed financially serving public and private needs, he said.
Cyren Call CEO Morgan O'Brien’s spectrum proposal largely could solve America’s broadband access problems and deliver a fully interoperable safety network, he said. On a Hill panel at the New America Foundation, O'Brien said Fri. he'd have more details of the proposal Mon. in a filing with the FCC. It will answer questions about how the company can succeed financially serving public and private needs, he said.
Speakers at a NARUC panel on use of reverse auctions as a universal service reform tool said their effectiveness will depend heavily on how the auctions are designed. FCC Chmn. Kevin Martin in March supported the concept as a way to contain universal service fund growth. His idea would make the winning bidder the provider of last resort. For reverse auctions to have a chance to work, speakers said, the auction process must recognize the large cost differences that can exist between locations within the same high-cost area. Brian Stahr, Embarq regulatory economist, said costs can vary by over 400% across a market area, such as between a town or other population concentration and the outlying areas. He said the industry has depended on low-cost downtown lines implicitly subsidizing high-cost outlying areas, but competition is causing that subsidy source to disappear. He said explicit subsidies through the USF aren’t working either, because support is based on a statewide average. Support needs to be more “granular,” he said, such as by census block: “Competitive bids must truly reflect costs of the truly high-cost areas.” Dennis Weller, Verizon chief economist, supported the idea of targeting support to the areas where it’s really needed: “The current system isn’t rational nor sustainable.” He said auctions in areas with multiple ETCs could establish rate models for setting support levels in areas not auctions. He said universal service is “essentially a government procurement process, and bidding is how government procures most everything.” Scott Reiter, NTCA industry affairs dir., disputed the wisdom of reverse auctions, calling them “a big blind leap into the unknown.” He said adoption of auctions won’t address how the universal service fund came to be unbalanced in the first place: “Auctions may be worth a look, but they aren’t the fundamental reform that’s needed.”
Wireless companies that operate in rural areas have formed the Wireless Across America coalition to work for continued Universal Service Fund support for wireless companies. The group plans to “tell Congress to safeguard USF funding for rural wireless service [to assure] the security and economic prosperity of countless rural communities.” The members are the Rural Cellular Corp., Alltel, Dobson, SunComm, Corr Wireless, Rural Cellular Assn. and Bluegrass Cellular.
Rural carriers are raising red flags about what could happen to some of the smallest carriers if the FCC institutes reverse auctions to make USF distribution more efficient. Comments varied widely on this and other proposals to restructure the distribution side of USF.