Rural Telecom Firms Concerned With USF Bill
September 14, 2010
| 12:58 PM
A group representing small and rural telecommunications carriers argues that some of the proposed changes included in legislation to overhaul the Universal Service Fund could hinder their ability to operate in some areas or invest in broadband infrastructure.
In testimony expected to be given at a House Energy and Commerce Communications Subcommittee hearing Thursday, National Telecommunications Cooperative Association CEO Shirley Bloomfield voiced concern with two provisions in the legislation that would overhaul the fund, which provides support for telecommunications service in high-cost and rural areas. They include a provision that would reduce or eliminate "high-cost" support in areas deemed to be competitive and proposed changes to inter-carrier compensation, the charges carriers pay to other carriers to originate, transport, and terminate telecommunications traffic.
The bill, introduced in July by Communications Subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb., would require the FCC to implement a mechanism for reducing or eliminating high-cost support to incumbent carriers in areas where at least 75 percent of households can receive voice and high-speed broadband service from a competitive provider that does not receive USF support. Other major provisions in the bill include expanding the USF to include support for broadband service.
In her prepared testimony, Bloomfield argued that the proposed limits on high-cost subsidies could lead "to a dramatic loss of the support needed to continue operating and meet obligations to serve customers in high-cost areas." She added that many of the details of the proposal such as how a firm could lose or re-obtain USF support are left to the FCC to develop, uncertainty that she said could hinder investment in broadband networks in the near term.
The National Cable and Telecommunications Association said while it supports the bill, it voiced concern that it does not place specific limits on the size of the high-cost fund and said it would like to see support for broadband limited to areas that do not currently have access to broadband service.
"NCTA has long supported a cap on high-cost support, but the cost model approach provided in the bill leaves open the question of the ultimate size of the high-cost
fund," NCTA Executive Vice President James Assey said in his written testimony.
U.S. Telecom Association President and CEO Walter McCormick, however, cautioned against making major changes to the bill, which is backed by USTA members such as AT&T, Qwest and Verizon.
"We would respectfully caution that changes to this delicately balanced package potentially risk undermining the compromises you and Representative Terry have worked so hard to forge," McCormick said in his prepared testimony. "The bill as introduced strikes a very careful balance between establishing obligations to provide service in even the most financially challenging areas and the funding available to support the construction and operation of broadband networks in those areas."
Join the Discussion
The National Journal Group has the right (but not the obligation) to monitor the comments and to remove any materials it deems inappropriate.
Comments powered by Disqus