Universal Service Reform Recommendations

UNIVERSAL SERVICE/BROADBAND
Universal Service Reform Recommendations
Coverage
Statements from Board Members

UNIVERSAL SERVICE REFORM RECOMMENDATIONS
[SOURCE: Federal Communications Commission]
The Federal-State Joint Board on Universal Service (Joint Board) issued its Recommended Decision on High-Cost Universal Service Support. The Joint Board recommended: A) The creation of three separate “funds” with distinct budgets and purposes: 1) The Broadband Fund to disseminate broadband Internet services to unserved areas; 2) The Mobility Fund to disseminate wireless services to unserved areas; and 3) A Provider of Last Resort (POLR) Fund to support wireline carriers that perform that function. B) An overall cap on the total amount of high-cost funding at $4.5 billion. C) Elimination of the identical support rule. D) Expansion of the definition of supported services to include broadband and mobility. E) A transition period, during which, each of the five current mechanisms are separately capped at 2007 levels. F) Exploration of the most appropriate reverse auction mechanisms. (WC Docket Nos. 05-337 and 96-45, FCC07J-4)
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A1.doc

** Coverage **
* US panel urges FCC to cap rural phone subsidies
http://www.reuters.com/article/governmentFilingsNews/idUSN21182986200711...
http://www.reuters.com/article/governmentFilingsNews/idUSN21182986200711...

* Panel recommends capping subsidies for rural phone, Net service (Associated Press)
http://www.mercurynews.com/business/ci_7526479?nclick_check=1

* Martin Seeks Supports On Universal Service
[SOURCE: Technology Daily 11/16, AUTHOR: David Hatch]
FCC Chairman Kevin Martin is seeking a third vote on the five-member commission to impose a temporary cap on the multibillion-dollar universal service fund that subsidizes Internet connections in rural and low-income areas.
http://www.njtelecomupdate.com/2007/11/martin_seeks_supports_on_unive.ht...

** Statements from Joint Board members **
* FCC Chairman Martin: "Today, the Federal-State Joint Board on Universal Service recommends to the Commission a number of important proposals to address the structure of the high-cost universal service program. I want to thank my colleagues on the Federal-State Joint Board for their contributions and efforts to improve the universal service fund. It is essential that we take actions that preserve and advance the benefits of the universal service program."... "The broadband program recommended by the Joint Board is tasked primarily with disseminating broadband Internet access services to unserved areas. This is a laudable goal as we work to make broadband services available to all Americans across the nation. As proposed, the program would have limited resources. Additional support for this broadband program could be made available by requiring competitive ETCs to demonstrate their own costs and meet the support threshold in the same manner as rural providers."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A2.doc

* FCC Commissioner Copps: "Five years ago I dissented to a recommendation by a different Federal-State Joint Board on Universal Service that concluded advanced services should not be eligible for Universal Service support and that broadband, specifically, should not be included in the definition of Universal Service. Today, the Joint-Board happily reverses course and finds that broadband does indeed meet the statutory criteria of section 254 for inclusion as a supported service and that it is in the public interest to do so. I am enormously pleased to approve of this historic finding by the Joint Board because it establishes for the first time the right mission for Universal Service in the 21st century. This may well be the most important single action a Joint Board has ever taken."..."I must express disappointment, however, that once the initial decision to include broadband was made, councils of caution found their way to the fore. Instead of bold recommendations to implement our historic decision, the Joint Board only suggests that $300 million of federal dollars be dedicated to this challenge. And none of this would be new money, but rather a mere reshuffling of dollars among different pots. That's like fighting a bear with a fly swatter."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A4.doc

* FCC Commissioner Tate (Joint Board Federal Chair): "While I support some of the recommendations, others raise questions that need to be addressed in more depth. For instance, is it prudent to create three new government administered funds instead of reforming the existing high cost fund?"..."I also believe that many questions remain with respect to two of the new funds: the Broadband Fund and the Mobility Fund. Should these new funds be more targeted, limited to unserved areas or used to enhance substandard service and/or to provide continued operating subsidies? What is the source of funding for the proposed $300 million and when will it accrue? What will the transition plan and period be? How should the proposed Broadband Fund relate to other current existing government programs such as those administered by the federal Department of Agriculture, the (14) fourteen broadband bills that are currently pending in Congress, and the hundreds of state and local projects that have been undertaken with state and local taxpayer dollars? While we all support the expansion and deployment of broadband to every corner of this Nation, we must do so in a way that is efficient, targeted and fiscally responsible."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A3.doc

* OR PUC Commissioner Ray Baum: "The new Broadband Fund will greatly accelerate broadband access in rural areas served by the non-rural incumbent local exchange carriers (non-rural ILECs). The new fund will also assist rural ILECs (RLECs) who are caught in the "parent trap" when purchasing service areas from non-rural ILECs. The idea is to direct funds to those portions of the country where broadband deployment is lagging, and where Rural Utility Service (RUS) loans and other types of support are not available. The RD points out that current High Cost support mechanisms have allowed RLECs to more effectively deploy broadband to their consumers. RLEC access to low-interest RUS loans helps to fill any gaps."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A5.doc

* FL PSC Chairman Lisa Polak Edgar: "I have lingering concerns that we have not accomplished all that can and should be done. As a Joint Board member from a net contributor state, I have concerns that expanding the scope of the fund to include broadband and mobility could inadvertently increase the overall fund size. While I recognize the importance of broadband Internet access and the importance of deploying it to unserved areas, I am wary of what lies beyond that initial objective and what financial impacts such deployment may have on consumers. I view these funding mechanisms as intended to facilitate service to unserved areas and not as long-term entitlements. Broadband technology as a consumer product has been growing steadily. Actions should not be taken that would interfere with market forces already at work or discourage current state efforts which are helping to bring broadband to unserved areas. Equally important, we must be mindful to not unduly burden consumers in states that have already made concerted efforts to foster deployment of these new technologies. As deployment becomes more widespread and as advances in technology lower service costs, a reduction in the universal fund size should occur."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A6.doc

* IN URC Commissioner Larry S. Landis: "I concur in the view of my colleagues who support redefinition of supported services to include broadband, employing a mechanism such as that outlined in this recommendation. It is beyond debate that there are those areas in which buildout is sufficiently costly that no business case can be made for buildout, regardless of the technology under consideration, and it is to those areas I would expect the broadband dollars would be primarily directed."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A7.doc

* VT Commissioner John D. Burke: "The most dramatic change we recommend is to support broadband deployment. Finding adequate funding for that program was our most difficult challenge. Since wireline and wireless voice services already receive support, one might anticipate that adding broadband would increase high-cost support by as much as one-half. I am pleased that we could find a way to offer substantial new funding for broadband deployment while still limiting the increase in fund size to about seven percent."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A8.doc

* WA Assistant Attorney General Public Counsel Simon ffitch: "A key aspect of this Recommended Decision is that it proposes a reasonable and practical way to reform existing support mechanisms and to redirect support to broadband and mobility needs, while at the same time keeping control on the overall size of the fund. In this way, the plan proposed in this Recommended Decision keeps the focus where it should be in this process -- on the interests of America's telecommunications consumers."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-4A9.doc