Rural Leaders Give Cold Shoulder to Cable’s Call for RUS Freeze
Leaders of the National Telecommunications Cooperative Association and the Iowa Telecommunications Association gave a cool reception on NCTA’s proposal to freeze the RUS broadband loan program. The RUS relaunched its troubled broadband loan program earlier this year and published interim rules. The comment period on the proposed rules closed last week. In its filing with RUS, the cable association said the broadband loan program was structured as if high-speed broadband suffered under geographic monopolies like old water and electric systems (CD May 16 p14). Offering broadband subsidies to telcos in areas where cable already offers it puts government in the “totally inappropriate role for a government agency,” by “picking winners and losers in the marketplace.”
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But NTCA CEO Shirley Bloomfield said in an email that cable’s freeze proposal “would seriously jeopardize the administration’s objectives of ensuring that affordable, high-quality broadband becomes and remains available for all Americans.” The FCC is considering an overhaul that would change the Universal Service Fund into a broadband fund, but rural telcos believe the reforms will squeeze them and are trying to fight off the most onerous proposals (CD May 16 p8). In Iowa alone, the FCC’s proposed reductions on USF would put 63 percent of rural areas at zero or below for rate of return, according to figures by the National Exchange Carrier Association.
The RUS program, on other hand, is a little more flexible from the rural point of view. RUS has proposed a 3 Mbps combined down/up for both fixed and mobile broadband service speeds, and the broadband lending speed of up to 5 Mbps for fixed and 3 Mbps for wireless. NTCA, Western Telecom Alliance and OPASTCO, along with USTelecom and the Eastern Rural Telecom Alliance all said in their comments that they opposed the lesser standard for wireless operators. USTelecom argued that a disparity between fixed and wireless violated the principle and legal requirement of tech neutrality. The comments were filed at the U.S. Department of Agriculture, docket RUS-06-Agency-0052.
But Bloomfield said cable’s proposal was beyond the scope of the argument. “It is one thing to suggest modifying the RUS loan program so that it is the most operationally effective as possible, but it’s quite another to call for a complete halt to the program’s loan making -- especially in light of the regulatory and economic uncertainty currently surrounding broadband investment in rural America,” Bloomfield said in her email. “This program has already been on hold for nearly three years as program rules were developed, meaning that critics have had more than enough time to make their concerns known.”
Iowa Telecom President Dave Duncan said “a lot of small carriers” in his state rely on the RUS program. “We've got a lot of small carriers in Iowa that have relied on RUS loans in a beneficial way,” he said. “Without RUS funding, it would be real questionable whether we could build broadband out.” A USDA spokesman said his agency “will review” cable’s proposals in due course but declined further comment.