Stakeholders Ambivalent About USF Order, as Last-Minute Push is Made
Telecom and consumer and states’ rights advocates were making final efforts to blunt the impact of the pending Universal Service Fund and intercarrier compensation system reforms on their interests. The FCC extended the open lobbying period to the close of business Friday. More than one critic accused FCC Chairman Julius Genachowski of being unnecessarily opaque with his intentions. “I think a lot of things are still in flux,” Free Press Political Adviser Joel Kelsey said Thursday. “The details are moving targets.” The proposed USF order is on the agenda for Thursday’s meeting.
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A lawyer for eight rural wireless carriers accused the FCC of blind-siding industry with the order and urged the commission to put off the vote. “Now, just a week before the Commission’s scheduled meeting to address universal service reform, proposed rules have not been published by the Commission,” wrote Lukas, Nace telecom lawyer David LaFuria on behalf of the rural wireless carriers.
"Our best guess as to what is about to happen comes from ex parte meetings with Commission staff, who are not authorized to tell us all of the specifics of what is in the draft order that has just circulated at the Commission,” LaFuria wrote in a letter dated Thursday. “We have learned that it is hundreds of pages in length; we have some directional clues, and statements that some issues remain undecided, but the public has been given no realistic opportunity to review and comment on concrete and specific Commission proposals for reform. As a result, the public has no opportunity to even understand what is in the revised draft order, much less engage in the kind of advocacy and public participation required by the APA and affirmed by the President’s Executive Order.” APA is the Administrative Procedure Act.
The price cap carriers behind the ABC plan met with Genachowski’s top aides, Zac Katz and Eddie Lazarus on Thursday, a telecom lobbyist said. Industry pressed the men on the formulas behind the intercarrier compensation proposals, but neither Katz nor Lazarus were prepared to talk about it, the lobbyist said. Industry was “on pins and needles” in the meeting, the lobbyist said.
Few have been completely happy with the order (CD Oct 19 p1). The question for many telecom lobbyists and consumer advocates was whether their objections were strong enough to justify a fight against it. “Several elements of the draft order appear problematic for mid-size carriers,” Independent Telephone and Telecommunications Alliance President Genevieve Morelli said Thursday. Her members are “particularly concerned that the draft order contains modifications to the [right of first refusal] that will undermine carriers’ ability to use their existing networks to quickly bring broadband to large numbers of unserved consumers. As proposed by industry, the ROFR would allow carriers to leverage their existing networks in high-cost areas to expand broadband expeditiously and cost-effectively. The changes under consideration would force carriers to deploy new networks in high-cost areas with little expectation of full cost recovery. ITTA also is concerned about the significant costs that price cap carriers with rate-of-return study areas would be forced to incur to convert those study areas to price cap status."
"With respect to intercarrier compensation,” Morelli added, “ITTA continues to oppose bill-and-keep and urges the Commission to abandon bill-and-keep as the end point for compensation between carriers for termination of traffic."
Consumer advocates said, they, too, weren’t sure what to do next about the proposed order. “There are a lot of things going on here, but compared to ABC plan … these guys [the FCC] wrote their own plan, which is infinitely better than ABC,” Consumer Federation of America Research Director Mark Cooper told us Thursday. “And I don’t want people to lose sight of that. This is a process.” Cooper said he was worried about proposed subscriber line charge increases but it was not necessarily “a deal-breaker.”
Free Press’ Kelsey said any SLC increase, “absent a demonstrated showing of need from the carriers, would be unacceptable.” Asked whether Free Press had been given assurances from FCC staff that they would require such a demonstration, Kelsey said: “No we have not. We wait with bated breath.”
"I give Chairman Genachowski credit for working hard to get the USF item teed up,” Free State Foundation President Randolph May said. “But based on what I've heard, I fear the order won’t be bold enough in reforming the regime. … It depends on whether the agency puts in place a hard cap on the high-cost fund, limits subsidies to unserved areas, and establishes a ’sunset,’ say, ten years, for phasing out high-cost subsidies.”
Leaders of the National Association of Manufacturers, Telecom Industry Association and the Small Business & Entrepreneurship Council held a conference call Thursday endorsing Genachowski’s efforts. “I understand that there’s some aspects of the proposals that may cause heartburn but I think it’s important that we move forward,” TIA Regulatory Affairs Director Mark Uncapher said. Uncapher and his colleagues acknowledged that they hadn’t been briefed on the contents of the order, but that Genachowski was right as a matter of first principles. “From a high level, the more people who have broadband, the better,” NAM Technology Policy Director Brian Raymond said.