RUS to Aid FCC’s Work; States’ Role Emphasized

RUS is happy to share its database and experience on rural broadband development, Adelstein said. The agency will offer what it knows about rural telecom services, he said. Agriculture Secretary Tom Vilsack is deeply involved in the work, and the two agencies will meet on a regular basis, Adelstein said. RUS has seen increased demand for funding, partly from current constraints on capital, he noted. The agency wants to work with the FCC to ensure that the right mix of incentives is available to attract private investment into otherwise uneconomic areas, he said. RUS supports revamping intercarrier compensation and USF policies, he said.

Meanwhile, it’s essential that the NTIA has the resources it needs to carry out the stimulus program, said Adelstein. Hopefully, the Congress will take up NARUC’s call for adequate funding to continue oversight, he said (CD Nov. 16, p5). RUS welcomes NARUC’s concern and support, but unlike NTIA, the agency is adequately funded for fiscal 2011, Adelstein said in an interview. “We have the resources we need to have proper oversight and execution of the program,” he said.

"There’s got to be a state role” in USF, said Carol Mattey, deputy chief of the FCC Wireline Bureau. USF clearly is a federal and state responsibility under the law, she said. The policy needs to be changed to reinforce that role, she said. States are labs for ideas, Mattey said. States’ experimental efforts should be encouraged, she said. State regulators have an important role to play in USF, said Jim Cawley, chairman of the Pennsylvania Public Utility Commission. State regulators need authority to resolve disputes, he said. The FCC should give states clear authority, he said. Cooperation between state and federal officials on issues like USF is essential, said David Bergmann, assistant counsel to the Ohio Consumers Counsel. It’s preferable to give state regulators authority over consumer issues, he said.

The inadequate and unstable universal service funding system threatens the quality of legacy services and presents an obstacle investment in advanced broadband facilities and services, said Joel Lubin, policy vice president with AT&T Services. Under the current system, multiple providers receive support for serving in an area, said Terri Natoli, a vice president of Time Warner Cable. States are uniquely positioned to help identify better ways to allocate funds, she said. Lubin proposed replacing the revenue-based contribution mechanism with a mechanism based on telephone numbers and connections, and revamping the intercarrier compensation system to preserve universal service during the transition to a fully deployed “broadband environment,” he said.

NARUC Notebook…

Regarding regulation of broadband, “it’s not so much about where we want to go but what we need,” said Sherry Lichtenberg of the National Regulatory Research Institute on a panel Monday. Three key questions are harms, how to assess the level of harms and what regulation would ensure the regulators have the tools they need if there’s harm, she said. “Regulators should help the industry to align what it wants with what the consumer wants and what regulators are called upon to do,” she said. Trying to predict behavior is pretty difficult, said Kathleen Abernathy, Frontier’s chief legal officer. Regulators should look at what framework can ensure that competition can deliver on social goals, not what particular bad practices companies may engage in, she said. Regulators also need to ensure that regulations are technology-neutral, Abernathy said. Investment in broadband will continue, but many hurdles remain, she said, urging regulators to remove uncertainty. There must be consumer protection rules and regulations, said Commissioner Geoffrey Why of Massachusetts’ Department of Telecom and Cable. The big issue is whether the FCC has any authority to oversee broadband transmission, said Matt Wood, associate director of the Media Access Project. This is not just about net neutrality or how the commission would deal with the Internet, he said. The FCC has to act now to claim its authority, he said. “We need the certainty now” instead of waiting for the Congress to pass a law, Wood said. The commission should act to end and avoid years of pointless litigation over authority every time it acts and to ensure that consumers receive timely and accurate information about the services they use, he said. Competition has been strong since the FCC decided not to regulate broadband as a common-carrier service in 2002, said Randolph May, president of the Free State Foundation. Everyone agrees that reasonable network management is necessary, he said. But if FCC were given the authority to enforce a nondiscrimination mandate, the agency would overreach, he said. That would prevent Internet providers from differentiating their services to respond to consumer demand, he said. It’s the differentiated services that really lead to innovation, May said. Net neutrality regulation would also hurt investment and create legal uncertainty, he said. The absence of proven market failure and any pattern of abuse of consumers also reinforces the conclusion that there’s no pressing need for regulation, he said.