Hundreds of Telecom Providers Plead for Predictable Funding Rules
More than 650 telecom providers signed a letter to commissioners “to ensure” the FCC and Congress “have clear and unambiguous notice of our collective concerns with the ‘regression analysis'-based caps” on USF support (http://xrl.us/bngrm9). A NTCA spokeswoman said the letter was an industry-wide effort in which several national and state associations, other groups and individual members “all reached out collectively to raise the visibility of this issue among policy makers in Washington.” The commission has received eight waiver petitions dealing with support reductions, of which one has been granted interim relief, a spokesman said. The commission also got two expedited waiver petitions dealing with boundary data, which it granted.
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"We have heard from some corners that there must not be significant concerns with these caps due to the limited waivers filed to date,” the groups wrote. “We wish in this specific letter to dispel immediately and comprehensively any notion that rural, rate-of-return regulated incumbent local exchange carriers (RLECs), such as the hundreds of companies noted below, agree that these new caps comply with law, are workable for providers making long-term investment decisions in hard-to-serve areas, or will serve the interests of rural consumers.” Last year’s USF/intercarrier compensation order approved regression analysis as a methodology to limit high-cost support, and in April the Wireline Bureau set out specific rules for establishing benchmarks for support. The new rules started phasing in July 1.
The groups worry about the unpredictability caused by USF changes, and the corresponding effect on current and future broadband deployment, they said. “The regression analysis framework provides no means for companies such as ours to determine how caps may change from year-to-year. This lack of predictability undermines our efforts to engage in responsible network planning.” Paid experts retained by the telecos have told them that predicting the effects of the regression analysis on an individual company beyond one year is “all but impossible,” they said. “This impossibility arises because the regression analysis caps are not only based upon the acts or omissions of every other RLEC (or an unidentifiable subset of RLECs), but because the limits will be recalculated each year based upon acts and omissions of RLECs two years prior to the recalculation.” Small business cannot run efficiently in the face of such uncertainty, they said.
"The Commission’s unanimous Order brought much needed accountability to the Universal Service Fund, placing long-overdue, reasonable limits on a system in which carriers previously controlled their own funding spigot,” the FCC spokesman said by email. “We recognize carriers’ concerns about making sure the funding they receive is predictable over time, and are working with small carriers to ensure they understand the new system, and to address all legitimate concerns. The Bureau’s March Order lets carriers calculate exactly what their individual limits will be until 2014 and the Commission is actively considering how they should be updated after that date to promote efficiency, fairness, and predictability."
The commission received eight petitions for review of the Wireline Bureau’s quantile regression caps, arguing they impose unreasonable burdens on rural LECs, apply support limits randomly and will fail to provide incentives for efficient operations (CD May 29 p7). Comments on the applications for review filed June 22 are due July 19. The USF/ICC order is the subject of a federal lawsuit in the 10th U.S. Appeals Court. It denied a request Wednesday to suspend the case until the commission could resolve the motions for reconsideration pending at the agency (CD July 12 p6).