USF Contribution Talks Slow in Attempts to Craft Consensus Proposal
Industry, USF recipients and consumer advocates are exploring new ways to fund USF. Talks began last year and remain in early stages, participants said in interviews. Parties fear the contribution factor, which reached a record high of 25% last fall (see 1909130003), isn't sustainable. Some want to present a unified funding proposal to Congress or the FCC. Most want the matter addressed next year.
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Incompas asked members last fall to share their proposals for USF contributions as it began conversations (see 1911040055). It declined comment. Competitive Carriers Association is part of a working group in the early stages of negotiating a consensus proposal. “CCA has long been concerned that the USF contributions methodology is not sustainable," emailed CEO Steven Berry. He wants industry, the FCC and Congress to "explore options for comprehensive contribution reform." He supports further discussions among industry and policymakers to put USF on a sustainable path. The FCC didn't comment.
The topic was among several when USTelecom CEO Jonathan Spalter and NTCA CEO Shirley Bloomfield spoke in February, Bloomfield tweeted then. "We are firm believers in the critical importance of USF and the need for a sustainable and equitable long-term solution to ensure its viability,” a USTelecom spokesperson emailed this week.
NTCA is eager to discuss contribution methodology with other stakeholders, and talks aren't formal, said Senior Vice President-Industry Affairs and Business Development Mike Romano. "Everybody is focused on the immediate crisis" and responding to COVID-19, he said. "We're planting seeds for discussion, a catalyst for things to come." NTCA estimates consumers are unlikely to drop broadband if a $1 monthly USF surcharge is imposed (see 2005070011). In legislation introduced earlier this month, Reps. Collin Peterson, D-Minn., and Don Young, R-Alaska, said broadband providers should pay into USF (see 2005050064).
"There's lots of ongoing discussion around funding the internet," FCC Commissioner Brendan Carr told reporters May 13. "Ultimately, we'll defer to Congress." Commissioner Mike O'Rielly, who heads the FCC Federal-State Joint Board on Universal Service, said the same day he welcomes congressional guidance on contribution updates. "Anytime Congress provides guidance is appreciated," he said. "I haven't been supportive of including broadband in the contribution base for a long time because it has an impact on adoption."
"We're feeling our way to see if there's consensus on proposals," said Levine Blaszak's Andrew Brown. Stakeholders have sought changes to the USF revenue base "in one form or another for 20 years," said Brown, who represents corporate telecom customers. He said the quarterly volatility in the contribution factor makes it difficult for businesses to budget. "You wouldn't pick this system" if designing the USF program today, Brown said.
Public Knowledge participates in the working group, said Senior Policy Counsel Jenna Leventoff. PK wants to make sure any changes to the contribution mechanism protect low-income consumers from fee increases.
WTA is lobbying the FCC and Congress to reduce the factor, said Senior Vice President-Government and Industry Affairs Derrick Owens. "We need the FCC to address universal service in a broadband world." WTA isn't part of the group.
"Ideally, we'd like to work with all the different sectors in the broadband marketplace to come up with a proposal," said Schools, Health & Libraries Broadband Coalition Executive Director John Windhausen. SHLB is a neutral party in the working group, he said. "We just want the universal service fund to be stabilized." He said SHLB is in talks with industry, consumer groups and USF beneficiaries in the working group. It favors expanding the USF contribution base but doesn't know what the best mechanism is, Windhausen said.
Some stakeholders want the FCC to seek comment. Others say there's enough data on record. "What the commission is looking for is consensus," Brown said. "Whatever happens with the election, it has to be fixed next year." Telecom consultant Genny Morelli said "even if there were significant interest on the part of the folks at the FCC to move forward with contribution reform, there doesn't seem to be the bandwidth and the resources for anything to happen this year."