Rural Groups Float Ideas on Possible FCC Bifurcated USF Cost Recovery
Rural telco groups offered feedback on, without endorsing, a possible "bifurcated approach" to ILEC cost recovery as part of a potential FCC overhaul of rate-of-return USF support mechanisms. In a letter posted Monday in docket 10-90, USTelecom joined by ITTA,…
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NTCA and WTA said the FCC raised the possibility of a bifurcated approach in its June 2014 Further NPRM under which USF support for investments prior to a selected date would be based on old rules and USF support for investments after that date would be based on new rules. "Over time as companies depreciate and retire assets in the old mechanisms and invest in new assets, costs would organically shift from the old to the new mechanism," the groups said. "Companies who have more recently completed construction initiatives with greater debt obligations will transition more slowly than companies who have not made those investments since new assets will have longer remaining lives and the need for subsequent investment is lower." The groups said none of them was yet ready to endorse such an approach generally, or the specific ideas in their submission, but were submitting the comments to further discussion and analysis.