Wireless CETCs Might Support Boucher-Terry USF Bill
Rural wireless carriers didn’t endorse but some may be open to Universal Service Fund overhaul legislation by House Communications Subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb. The bill (HR-5828) is backed by major wireline associations, the cable industry and AT&T and Verizon (CD July 23 p1). Some expected a competitive bidding rule to alienate rural wireless carriers that compete for USF dollars as competitive eligible telecommunications carriers. Wireless CETCs have concerns, but believe Boucher and Terry listened hard to all stakeholders and came up with a “solid compromise,” said Rural Telecommunication Group General Counsel Carri Bennet.
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The bill doles out “a little hurt for everybody,” but overall is “not so bad,” said Bennet. The legislation would also remove uncertainty that has hurt investment, she said. The Rural Cellular Association has “real reservations regarding the competitive bidding process for wireless support,” said CEO Steven Berry. But it’s “encouraging that wireless is included in the bill,” he said.
A Boucher aide said it wouldn’t be surprising for rural wireless carriers to object to the competitive bidding requirement, which would limit USF support to no more than two wireless companies in a given area. RTG may seek more clarity in the legislation on competitive bidding, but the group probably will spend more energy fighting at the FCC, which would have to implement the auctions under the legislation, said Bennet. The auctions as envisioned by the bill are unlikely to give top wireless carriers incentive to compete with smaller carriers for USF dollars in remote areas, said Bennet, noting Verizon has said it would rather partner with the smaller rural companies. A requirement that USF recipients deploy broadband across their service areas in five years should prevent arbitrage by new entrants hoping to use USF money for unrelated purposes, she said.
RCA fears reverse auctions could be “absolutely fatal” to rural wireless carriers, Berry said in an interview. They could encourage big carriers to come in and bid low enough to kill competition from smaller companies that require more USF money to survive, he said. But the Boucher-Terry plan looks better overall for rural companies than the National Broadband Plan, and RCA can work with most of the other provisions in the bill, Berry said. The group plans to keep raising the bidding issue with legislators as the bill moves through Congress, he said.
Another point of debate for rural carriers could be the appropriate minimum universal broadband speed, but the bill left that question to the FCC as well. “It is imperative that the FCC determine data speeds that may be achievable in rural and hard-to-reach areas,” Berry said.
Some cautioned not to interpret broad support as a sign that the bill will pass. “The Boucher bill has wide support partly because it gives something to everyone, and partly because it’s unlikely to be enacted,” said a communications lawyer not directly involved in the issue. “The real action on USF is at the FCC.” Boucher and Terry “have done an effective job” crafting a USF revamp proposal that’s “significantly supported in telecom and cable sectors,” said Medley Global Advisors analyst Jeff Silva. “But much work remains. As difficult as it has been to craft the House measure, heavy lifting will be required to win congressional approval in a politically volatile environment and later to implement any measure at the FCC.”