Well into football season, USF reform for rate-of-return carriers still to come
spring, FCC Chairman Tom Wheeler famously pledged to a Senate committee he would implement RLEC USF
reforms by football season. Now that we are half way through the NFL and college
football seasons, how much closer are we to universal service support reform
for rate-of-return carriers?
Since that Wheeler
appearance before the Senate Financial Services and General Government
Appropriations Subcommittee, rural telecom stakeholders have continued to work
on universal service reform for rate-of-return carriers on several fronts. One
is support for companies whose customers want broadband
service without the voice component. Rural phone companies lose high cost loop support
that makes their service affordable when voice and broadband services are
bundled together. The rural associations have been discussing a solution to the
stand-alone broadband problem with the FCC for several years, with the proposed
Connection Service as one option that would change
existing support rules to allow RLECs to receive high-cost support for
broadband-only connections. (See article in summer 2015 issue of Access.)
What about the
option that has been explored more recently, but not yet officially supported
by the rural associations, is generally referred to as the FCC’s proposed bifurcated
approach, which would establish
separate mechanisms for recovery of costs based on investments before or after
a given date. Recent industry efforts to come up with technical
assumptions for such an approach include an August meeting with FCC staff at which industry
participants provided materials
aid in identification and discussion of issues that may require further examination
and resolution arising out of such an approach, including possible effects on:
- rates for consumers who
take a combination of voice and broadband in the future;
- rates for consumers
who purchase voice service only going forward; and
- local service rates
and state universal service funds.
In a speech at
NTCA’s fall conference, FCC Chairman Thomas Wheeler spent most of his time on the
various proposals for universal service reform.
He said any new mechanism must:
- be forward-looking,
- ensure equitable distribution of funds,
- prevent double recovery, and
- stay within the established budget.
recognized that any new mechanism would require a timely, but reasonable
transition period, although he was not specific on what that period might be.
He called the effort “a once-in-a-generation opportunity to put the rate-of
return-carrier program on solid footing.”
updates proposed A-CAM
The FCC has also
proposed a transition framework for a voluntary election by rate-of-return
carriers to receive model-based support. In its April 2014 Connect America Order and FNPRM, it directed the Wireline Competition Bureau to
make the needed adjustments to the Connect America Cost Model currently in use
for price cap carriers to adapt it for rate-of-return areas.
The Bureau recently
released the latest version of its Alternative Connect
America Cost Model for rate-of-return carriers, which incorporates the results
of its study area boundary data collection as well as other refinements. The rural
associations have expressed support for making a voluntary model-based path
available to rate-of-return carriers who might be interested in opting into
such a support mechanism. But they said inputs and outcomes require greater
examination both prior to an initial limited voluntary election and even more
so for any possible voluntary use beyond such an initial phase.
Based on the
ongoing meetings with FCC staff, Wheeler does not seem to be backing off the
end-of-football season promise. Will it be a smooth steady ride to accomplish
his goals or will there be a Hail Mary pass with time ticking down to 0:00 to
get the job done? Stay tuned, football fans.
Deegan contributed to this article. Bob is senior government relations counsel.
He can be reached at email@example.com.