States Find Consensus, Differences on USF, ICC

The FCC should retain or even enhance the traditional role of state commissions in designating entities eligible for USF and compliance with federal requirements for such funding, said the Washington Utilities and Transportation Commission. The FCC should also respect the dual responsibilities of the commission and states in setting access charges, the Washington commission said. Intrastate access charge changes should be left to states, many states said, citing the FCC’s failure to classify interconnected VoIP as an exacerbation of issues like access charges.

The FCC should confirm that the statute allows direct universal service support only to networks that provide both “advanced services as well as voice services,” NARUC said. The FCC should also immediately classify fee-based voice services that use VoIP technology as a telecom service, it said. The FCC should require carriers that want to provide standalone broadband (without any voice service), as a condition of getting the subsidy, to offer it as a telecom service, it said. NARUC has urged the FCC to consider non-preemptive approaches to ICC and facilitate cooperative state-federal action.

States like Florida and Nebraska support many of the proposed near-term revamps to the high-cost support mechanisms. The Florida Public Service Commission supports the proposed cap on the total size of the Connect America Fund (CAF), though the FCC should look to reduce the size of the fund where efficiencies derived from the revamp allow, it said. The Nebraska Public Service Commission agreed with the FCC that USF policy should promote support for broadband capable networks and services. But many of the FCC’s proposals would have serious consequences for both existing voice services and deployment of broadband capable networks in Alaska, said that state’s Regulatory Commission. It urged establishing alternative rules and funding mechanisms to accommodate areas having unique deployment challenges such as Alaska, an area historically viewed by the FCC as tribal lands.

New York and other early adopter states said any proposal shouldn’t penalize states with a rapid pace of broadband deployment. The New York Public Service Commission urged priority be given to expanding adoption. For the size of the fund, New York recommends that the FCC choose the alternative for a CAF budget that results in a smaller amount of funding, and allow program savings to reduce the overall size of the CAF and contribution obligations on consumers. New York further suggests that the FCC give priority to and concentrate on distribution of funding for extension of broadband to public computing centers.

California urged the FCC to adopt a “glide path” that is reviewed in stages to measure the actual migration of traffic to IP, the impacts on end users, and the effects on rate-of-return carriers. The FCC should provide positive incentives to states to act on reducing intrastate access rates, such as preference for receipt of the first phase of the CAF funds, the California Public Utilities Commission said. The CPUC recommended a “no barriers” approach to measuring costs and revenue by supported carriers, in that regulated and unregulated revenue are considered. It also urged the FCC to provide additional clarification as to how the CAF would support broadband deployment in practice.

The Indiana Utility Regulatory Commission warned that the USF proposal could at best, threaten the realization of urban/rural parity required by the 1996 Telecom Act and, at worst, result in “an outright violation of this legal mandate.” The loss of traditional USF support to the existing voice service providers would lead to higher rates or the ceasing of operations, it said. Kansas has a similar concern, saying the state is heavily dependent on federal support.