Industry remains divided on how best to fix the Universal Service Fund and intercarrier compensation regimes, with a few months left before an FCC-promised deadline. Despite broad agreement that USF and intercarrier comp need fixing, reply comments show deep divisions over such questions as how quickly to transform to an all-IP network, how to treat VoIP service and the role of satellite and wireless technologies. “There is no doubt that the current universal service fund … and intercarrier compensation regimes are not sustainable in light of market and technological changes,” the Independent Telephone & Telecommunications Alliance said. “The comments show that there is no industry consensus in favor of the reforms outlined in the Notice or any other plan to promote broadband deployment to unserved areas.” The replies were posted in docket 10-90.
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.
OMAHA, Neb. -- The FCC shouldn’t fall for the “misperception” that satellite can’t provide effective voice and broadband service, WildBlue Vice President Lisa Scalpone said late Wednesday at a commission workshop on changing the Universal Service Fund to pay for Internet service. “We don’t want to be foreclosed,” she told federal and state regulators, including FCC members Michael Copps and Mignon Clyburn. ViaSat, WildBlue’s parent, is scheduled to launch ViaSat-1 in July. Scalpone said that once that satellite is operational, WildBlue will go from download speeds of 2 Mbps to 12 Mbps. “At least let satellite perform in pilot programs,” she said. “We'll have the programs up and running."
OMAHA -- The FCC should take an active role in creating and enforcing broadband guidelines in its Universal Service Fund reform, T-Mobile Corporate Counsel Teri Ohta said at an FCC workshop Wednesday. “We do feel that the federal government ultimately has the responsibility to make sure those funds are distributed properly.” T-Mobile is worried that giving states authority over broadband regulations will lead to a confusing patchwork of regulations that will make it difficult to deploy broadband, Ohta said.
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.
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.