NTCA Questions Possible FCC 'Bifurcated Approach' to USF Cost Recovery
NTCA raised questions about a possible FCC “bifurcated approach” to rural telco USF reform under which prior expenses would be recoverable through existing mechanisms while new investments and some stand-alone broadband expenses would be recoverable through new mechanisms. “While it…
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is important to get reform done quickly, it is more important to get reform done right,” NTCA said in a filing posted Monday in docket 10-90 on a meeting with a senior FCC staffer. The rural telco group asked what the bifurcated approach's objective is, given that it believes FCC-articulated reform principles are more likely to be achieved by “already-proposed measures,” such as “budget controls and reasonable limits on operating expenses and prospective capital investments." Plus, NTCA said existing high-cost loop support (HCLS) and interstate common line support (ICLS) mechanisms have "shortcomings," but they have worked "better than any other system" to encourage and enable sustainable rural broadband investment. It's “essential that any reforms strike a careful balance toward both a reasonable opportunity to recover costs in accordance with the rules in place at the time the relevant investments and associated expenses were incurred and the need to provide sufficient and predictable support for future broadband deployment and operations; neither can or should be sacrificed for the other,” NTCA said. The group also voiced concerns about any “artificial cut-off” of HCLS/ICLS support that would move all associated costs “to the new mechanism as of a future date certain.” NTCA said HCLS and ICLS support should “continue for the useful life of networks used to deliver supported services; even after those networks are fully depreciated, rural rate-of-return-regulated local exchange carriers ('RLECs') will continue to incur expenses to deliver voice and broadband services over them.” NTCA also noted the “time sensitivity” of a request for commission review of a Wireline Bureau denial of a petition for reconsideration of an HCLS rate floor, which rural telcos believe was flawed. Rural telcos aren’t substantively challenging the application of the rate floor to HCLS support, but its methodology, and the FCC should act “well in advance of June 2016" to set "a more reasonable methodology,” the group said.