The FCC’s clarification (CD April 26 p1) on the application...
The FCC’s clarification (CD April 26 p1) on the application of intrastate carrier access charges for originating VoIP traffic won’t have significant effects for small rate-of-return rural ILECs, a state official said. The transition to the bill-and-keep regime under the…
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FCC’s USF/intercarrier compensation order would adversely impact the financial health of these smaller companies which “have done their best to bring landline broadband to rural America,” he said. This would also create “major risks” for outstanding Rural Utilities Service broadband loans, he said. To the extent that many small, rural carriers already deployed broadband in their territories, they would get nothing out of Phase I, a state regulatory analyst said. The carriers’ costs might be well above the $775 per line cost requirement, she said. The rural carriers have been using the high cost funds to keep their prices low and to do some deployment, she said. They would now pull back from expansion and some might have to raise prices, she said. The Phase I Connect America Fund (CAF) would be an “incremental support” to telcos this year, while their existing federal high-cost support would be frozen, UBS analysts said. Phase I CAF could boost free cash flow by 3 percent for CenturyLink and 7 percent for Frontier and Windstream in 2012, they said. Based on the defined cost of $775 per line, Windstream could increase its broadband coverage by 5 percent, Frontier by 3 percent and CenturyLink by 1 percent, the analysts said. While the figures are small, the increased broadband coverage would allow the RLECs to tap a new revenue opportunity in the next couple of years, UBS said.