Industry Stakeholders Advise Congress on Overhauling USF Policy

USTelecom said the contribution base should be guided by several principles, that it should be “stable and predictable,” that “all providers should contribute in a competitively and technologically neutral manner,” that discretion of provider and efficiency be prioritized and that “consumer impacts should be equitably distributed consistent with the public interest benefits of universal service.” Since high-cost and E-rate funds go to broadband, “it is appropriate to examine whether to extend the contribution obligation to broadband,” USTelecom said. “But that examination should be broader than assessing the current contributors to universal service; it must seriously examine including more participants from the broadband ecosystem, whether that obligation is assessed on a direct or indirect basis, and include an appropriate transition to a more broadband-oriented universal service contribution plan."

CenturyLink thinks the USF contribution mechanism and four distribution programs require overhaul. “Universal service policies should be explicitly re-directed to support voice and broadband internet access services and the networks that enable those communications,” CenturyLink said. USF must be changed to “broaden the contribution base, simplify the contribution methodology and ensure that similar services share the same contribution obligations,” said the telco. Congress should make “requirements that automatically relieve an existing ETC [eligible telecom carrier] of its ETC status and service obligations in an area where the carrier ceases to receive USF support,” it said, saying “providers offering the same or similar communications services” should face the same contribution obligations.

"Congress should direct the FCC to expand the universal service contribution base to include broadband services,” said ITTA. “Failure to date to revise how contributions are assessed and who contributes to the Fund is irresponsible in light of the fundamental changes that have occurred in the telecommunications marketplace over the past decade.” Avoid setting a “hard dollar cap,” ITTA said.

Congress “should eliminate the restriction limiting universal service support only to” ETCs and “make clear that support is not limited to telecommunications services or carriers,” said NCTA. It advised codifying the FCC principles of awarding USF money “on a competitively neutral basis” and that such money “be spent on networks that provide advanced services.” It wanted explicit policy that USF money should not go to service where there is already “a privately funded network” in place and suggested the USF be capped “to ensure that consumers are not burdened with an ever-increasing contribution amount.”

"By eliminating these legacy ETC designations and requirements, the FCC could enable price cap carriers and other legacy ETCs to focus limited capital resources on extending broadband to additional areas and responding to actual consumer demands, rather than wasting them on rapidly obsolescing facilities and services,” USTelecom advocated. It suggested Congress consider “spelling out explicitly the meaning of the term ’sufficient’ as it is used in section 254 in the context of high-cost universal service support” in any Communications Act overhaul.

More competition and service choice means “there are fewer instances in which universal service subsidies are necessary and fewer instances in which providers must shoulder associated regulatory obligations,” Verizon said. Despite the need for subsidies, USF “should function as a backstop, only in cases where there is clear evidence that services are not available or affordable,” it said. USF obligations should not be imposed on providers, said Verizon, saying the FCC USF overhaul is on the right track.

Lifeline should become “a free-standing program that is wholly voluntary for service providers and removes service providers from the administration of the program,” and E-rate should be simplified, since its administration has become “excessively complex and fraught with land-mines of non-compliance at every turn,” CenturyLink said. It lamented that the “Rural Health Care Program has been historically under-utilized” and called for overhaul. USTelecom said the shifts in the Lifeline program in light of changing technology warrant the committee’s attention.

The IP transition is “inevitable” and its “timing depends on the resolution of important policy questions,” said the Telecommunications Industry Association. “This technology transition changes the nature of telecommunications markets, and an evolution in the role and function of state oversight is appropriate. For example, since IP traffic is not bound by the distance constraints that exist for TDM, the transition to Voice over Internet Protocol (VoIP) ends voice as a localized market.” TIA pointed to “public interest considerations” that may make the transition “an appropriate area for the engagement of state regulators and the Federal-State Joint Board.”

CenturyLink said state officials are closer to USF concerns than the FCC: States and their commissions “should be involved in developing their respective state universal service goals so long as those goals do not contradict or thwart federal universal service goals and principles.” States should “continue this advisory role to the FCC” on USF policy, and are best poised to advise on “whether the universal service obligations adopted by the FCC are being met and whether those obligations are having their intended effect for consumers,” said ITTA. (jhendel@warren-news.com)