Telcos, Cable Praise Balance Struck in Boucher USF Revamp
The telephone and cable industries “endorse” Universal Service Fund legislation by Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb., USTelecom and NCTA executives said in written testimony for a House Communications Subcommittee hearing Thursday morning. HR-5828 “balances many competing interests to modernize universal service and to bring robust broadband to areas of rural America where today’s business case would not support such deployment,” said USTelecom President Walter McCormick.
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But McCormick warned Congress not to make any more changes to the bill. “Changes to this delicately balanced package potentially risk undermining the compromises” forged by Boucher and Terry, he said. “Mandates that exceed the amount of support provided will not achieve their intended objective. Indeed, they risk driving broadband providers out of the program entirely.” While USTelecom supports intercarrier compensation provisions in the bill related to “phantom traffic” and “traffic pumping,” the association believes the FCC can address those matters right away, McCormick said. “It is critical that the Commission not use the pendency of legislation to delay further in adopting fixes to these rapidly growing problems, which it has ample jurisdictional authority to address."
The bill incorporates all of NCTA President Kyle McSlarrow’s suggestions from a hearing on a draft bill late last year, said Executive Vice President James Assey. He praised the bill for including NCTA’s proposal to establish a mechanism by which the FCC could reduce or eliminate USF high-cost support in areas where more than 75 percent of the population can buy service from two or more wireline providers. The provision would be better if it said the test would be satisfied when “two or more competitors combine to meet the 75 percent threshold,” Assey said.
It’s “reasonable” to take away high-cost support from incumbents in areas where a wireline competitor provides unsubsidized service, said Qwest Senior Vice President Steve Davis. Support should continue for “higher cost areas where the unsubsidized competitor does not offer service,” he said. The process should be consistent for carriers classified as “rural” and “non-rural,” Davis said. Despite serving rural areas, Qwest is considered nonrural under the law because it’s so much bigger than other rural carriers.
NCTA also supports USF E-Rate and Lifeline revamp bills by Reps. Ed Markey, D-Mass., and Doris Matsui, D-Calif., respectively, said Assey. One or both bills could be added to Boucher’s bill when it moves to markups in the subcommittee and Commerce Committee. When Boucher introduced his bill in July, the subcommittee chairman said he expected to work with Matsui on an amendment based on her bill. Markey said he also planned to work to incorporate his bill later in the legislative process (CD July 23 p1).