Means of Collecting Federal Funds Needs To Be Revised, Experts Say
Some regulators and telcos want state and federal USF contribution revisions, while others representing wireless ISPs would rather see the entire system shut down and overhauled, said speakers during a National Regulatory Research Institute tele-seminar. Speaking Thursday, the deadline day for telcos to accept FCC Connect America Fund Phase II offers (see 1508270068), experts said the funds wouldn't cover building out all networks to FCC standards, so it’s up to states to try to supplement that spending to improve the networks' reach to rural areas. The companies are aware the investment needed will be more than the funding, so they're ready to work with each state on how far it will go and whether other assistance is available, telco representatives said.
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.
Most panelists backed updating the USF system. But CEO Matt Larsen of Vistabeam, a small Nebraska ISP, said he prefers to see the whole system dissolved and started over. Vistabeam doesn't contribute to the fund and Larsen has no interest in becoming an eligible telecom carrier because it doesn't make sense to continue to subsidize companies that have failed to deliver services, he said. “It's time to chuck the whole thing and start over,” he said. “I'm not very impressed with what I've seen so far, there are so many strings attached that we've looked at.”
In states such as Nebraska, it wouldn't be feasible for companies to provide services to a large portion of the communities without CAF, said Nebraska Public Service Commissioner Crystal Rhoades. CAF will never be enough, so states are being thoughtful about how they can supplement the federal monies with state funds, she said. Allison Ellis, Frontier Communications vice president-regulatory affairs, said it’s a very large engineering undertaking that's guided by FCC parameters, so the company is following those guideposts and looking to engineer the network in a way that maximizes the impact. It’s not going to get to everywhere and it wasn’t meant to reach every household that needs service, she said. “The obligation is to meet the total number of locations, not necessarily a certain amount in any given census block.”
Eric Einhorn, Windstream vice president-federal government affairs, said the company starts where it already has networks in place. It’s an opportunity to maximize the reach of Windstream’s broadband network to its customers, he said. The funds will be used to serve existing customers and bring high-speed service to more subscribers that don’t have broadband yet, Einhorn said. The company views it as a way to shorten local loops and drive fiber deep into networks, he said.
Larsen questioned the need to build out a network that's out of date. Rhoades defended that system because of public safety concerns and said rural areas aren't seeing reliable services from anything other than wireline technology. Larsen said anyone who can get a broadband connection can also have VoIP services from a number of different providers across the country. Consumers must sign a disclosure that says 911 services may not be reliable on a VoIP network because the industry hasn't developed a "modernized 911 system that can handle geolocation that works for both voice over IP providers and all the other providers," he said. Rhoades said it doesn't matter whether the system is modernized because the VoIP calls don't always make it through to the public safety answering points (PSAPs). Until every call makes it to the PSAP, she said no one can say this is an "old dinosaur we should do away with." If that day ever comes, Rhoades said Larsen and other wireless Internet service providers will have her full support.
State regulators need to ensure that the funds are being spent appropriately, without discouraging companies from building out and utilizing the funds to benefit the public, Rhoades said. Mike Romano, NTCA senior vice president-policy, said the issues are getting the network built and then finding ways to get consumers to use that network. Most important is ensuring that everyone is meeting the goals of universal service, which is to provide reasonably comparable service at a reasonably comparable price, he said. That should be the core focus of everyone involved with this program, Romano said.