FCC Using USF to Impose Title II-Style Regulations, Say Executives
The FCC appears to be leaning toward Title II-style regulation of broadband through its Universal Service Fund revamp, industry officials told us after examining the commission’s rulemaking notice on USF. “It’s clear to me that when you look at the questions they're asking around support, that seems where they're heading,” Voice of the Net Coalition Executive Director Glenn Richards said. “It’s a way to get broadband providers to agree to Title II-like obligations.” FCC officials didn’t respond to requests for comment.
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In their discussion of “public interest obligations” in phase one of its Connect America Fund, commission staff wrote, “we propose that recipients be subject to broadband deployment, infrastructure build out, pricing, and other requirements.” Much of the discussion centers on applying current voice requirements to broadband service. “These obligations would apply to all funding recipients going forward, whether already designated” as eligible telecommunications carriers “by states or the commission or designated in the future, as a condition of receiving support from the existing high-cost program or the Connect America Fund,” the FCC wrote in its rulemaking notice. Level 3 General Counsel John Ryan said “I recognize the commission is trying to walk a fine line when it comes to USF support for broadband, because the truth is we're dealing with a statutory regime that certainly didn’t contemplate or anticipate a broadband world.”
Some in industry have been worried -- and public interest advocates hopeful -- that the natural evolution of universal service will lead to Title II anyway. But it’s no coincidence that the commission is resting a good bit of its USF arguments on Sec. 254, which is under Title II, USTelecom Senior Vice President Jon Banks said. “The way I look at is, the CAF fund is going to give people money to build broadband, and because the government is funding it or purchasing it, it’s going to impose obligations on the people who take the money,” he said. That doesn’t mean industry faces a Title II threat. “It has nothing whatever to do with people who don’t take the money,” Banks said. “If you turn down the money, you don’t have the obligations.”
Still, the commission could make its -- and industry’s -- lives easier by closing its Title II proceeding, Banks said. “There is some uncertainty here, but the commission can clear that up by closing that proceeding,” he said. The commission may well be keeping the matter open because it needs “a fail-safe” in case its net neutrality order is struck down by the courts, Public Knowledge spokesman Art Brodsky said. “It would be wise to do so,” he said Friday.