Senators Want Immediate FCC Clarification on USF/ICC Order Implementation
A bipartisan group of 19 senators said the FCC should “immediately act” to remedy the group’s concerns over diminished rural communication network investment in the aftermath of October’s USF/intercarrier compensation (ICC) order, said a letter sent Tuesday to Chairman Julius Genachowski. Warning of “unintended consequences,” the senators requested a formal FCC clarification that the order “will not be implemented in a manner that perpetuates unintended outcomes."
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The senators asked the FCC to issue five clarifications: (1) That it will not implement additional reductions in USF or ICC support pursuant to the further notice “until the implications of the reforms and reductions adopted in the recent Order can be properly evaluated and understood.” (2) That lawfully incurred investments and operating expenses are not “jeopardized by retroactive rule changes.” (3) That it will not deem investments or expenses “unlawful, imprudent or not ‘used and useful'” if they were made in accordance with federal agency standards and mandates. (4) That it “adopt a clear-cut and non-burdensome waiver mechanism” to allow for cost recovery. (5) That it will “adopt a sustainable and predictable broadband oriented Connect America Fund” for areas served by small rural carriers, “as it did for those served by larger carriers.” The clarifications, the letter said, would “ensure all rural consumers are able to fully participate in the universal communications network Congress has envisioned.”
"The Commission’s unanimous Universal Service order responded to over a decade of bipartisan calls to eliminate waste and inefficiency in the Fund, bring long overdue accountability, and close the rural-rural divide in access to broadband,” said an FCC spokesman in response to the letter. “We continue to work with all stakeholders as we implement the Order to keep the fund on a budget while protecting service for rural consumers who have it today and extending new broadband to the millions of consumers who have no broadband and had no path to get it under the old system.”
Last week, Agriculture Secretary Tom Vilsack told a Senate subcommittee the FCC should consider having flexibility with waivers, which would give the Rural Utilities Service the flexibility it needs to adjust RUS loans held by rural carriers (CD March 30 p7). Several rural carriers have told the FCC they are canceling broadband projects in the wake of USF reforms that will limit reimbursable capital and operating costs, and the safety net additive reforms that they say unexpectedly eliminated promised financial support (CD March 9 p3).
"This is a great step,” said NTCA Senior Vice President-Policy Michael Romano. “It will help to underscore that there are several key steps that need to be taken next to make sure that these changes that were just adopted last fall can be implemented and understood.” Romano said the safety net additive and the proposed quantile regression analysis capping high cost loop support has left many carriers with certain investments that are no longer recoverable, which is problematic because “they can’t go back and call a do-over on loans.” In implementing its order, the FCC could try to limit harm from retroactive rule changes by, for example, eliminating the safety net for future investment, or applying regression analysis caps prospectively “to the next dollar of investment rather than existing investment,” he said.