FCC Releases Universal Service Reform Proposals

For more on universal service and broadband, see Universal Service Reform and Universal Broadband

FCC RELEASES UNIVERSAL SERVICE REFORM PROPOSALS
[SOURCE: Federal Communications Commission]
On Tuesday, the Federal Communications Commission issued three Notices of Proposed Rulemaking (NPRMs) seeking comment on proposed reforms of the Universal Service Fund, a subsidy program that mainly provides affordable phone service to people who live in rural areas. Specifically in one NPRM, the FCC seeks input on the merits of using reverse auctions to determine the amount of high-cost universal service support provided to eligible telecommunications carriers serving rural, insular, and high-cost areas. Concerning high-speed Internet access, the FCC seeks comment on whether it should employ should employ a pilot program -- and, specifically, a pilot program to disburse high-cost support targeted to broadband Internet access services -- test the use of reverse auctions as a method for distributing high-cost support and adopt a pilot program to replace the current high-cost support received in a particular area. The Commission tentatively concludes that 1) in any pilot program, the reserve price should be based on the current level of support in the particular area and 2) the states are best situated to implement any pilot program. FCC Chairman Martin said, "I continue to believe the long-term answer for reform of high-cost universal service support is to move to a reverse auction methodology. I believe that reverse auctions could provide a technologically and competitively neutral means of controlling the current growth in the fund and ensuring a move to most efficient technologies over time. Accordingly, I am pleased that we adopt today's Notice of Proposed Rulemaking to use reverse auctions to distribute universal service support."

* Reverse Auctions NPRM
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A1.doc

* Identical Support NPRM
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-4A1.doc

* NPRM on recommendations of the Federal-State Joint Board on Universal Service
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-22A1.doc

* FCC studies ways to fix phone-subsidy program (Associated Press)
http://www.siliconvalley.com/latestheadlines/ci_8116699

* FCC Chairman Martin:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A2.doc

* Commissioner Copps
"I continue to believe that there are a variety of ways to promote Universal Service and at the same time ensure the sustainability and integrity of the fund. I believe much would be accomplished if the Commission were to include broadband on both the distribution and contribution side of the ledger; eliminate the Identical Support rule; and increase its oversight and auditing of the high-cost fund. Additionally, Congressional authorization to permit the assessment of Universal Service contributions on intrastate as well as interstate revenue would be a valuable tool for supporting broadband."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A3.doc

* Commissioner Adelstein:
"The Joint Board's Recommended Decision for comprehensive reform of the high cost support mechanism - and, in particular, the decision to include broadband as a supported service - is a landmark development. I have long argued that the universal service fund is an integral component of our efforts to meet the broadband challenge. So, the decision to embrace broadband, through the list of supported services and through targeted funding for unserved areas, and the recognition of the effectiveness of the current High Cost Loop Fund in supporting the capital costs of providing broadband-capable loop facilities for rural carriers are encouraging developments. I must express a degree of reservation over the amount of support allocated to the Broadband Fund, among other limitations on support. Maintaining our commitment to connectivity, particularly in the broadband age, is more important than ever, and the Commission must start to provide realistic assessments of what will be required."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A4.doc

** In a recent interview, Adelstein also said, "One of my big concerns, of course, is rural broadband. I'm very concerned that we ensure that every part of the United States has access to the latest technology. It's both an opportunity for economic advancement and a danger that rural areas could fall behind if we don't make sure that all areas of the country have access to the latest telecommunications infrastructure. A lot of small companies in South Dakota have done a good job - the rural co-ops and the small rural companies - of getting the latest technology out to those areas. ... We found that people are able to locate to the most remote parts of the state and telecommute to Sioux Falls. There's one person who lives on a ranch out in western South Dakota who works for Wells Fargo in Sioux Falls and does very advanced work, yet is able to live where they have some ranching activities and the quality of life that he wants. Yet he's able to do this work all thanks to the availability of broadband.
http://www.argusleader.com/apps/pbcs.dll/article?AID=/20080128/NEWS/8012...

* Commissioner Tate:
As Federal Chair of the Federal-State Joint Board on Universal Service (Joint Board) I am particularly pleased that we are taking this significant step forward in the journey toward comprehensive reform of the high-cost universal service program. This is an important program at the heart of rural America. Its purpose, to connect all Americans to telecommunications at affordable rates, has over the years permitted people to be connected even in rural and remote parts of our nation. Going forward, the Universal Service Fund will continue to play a critical and increasing role in one of our top priorities at the Commission -- encouraging broadband deployment to all corners of America."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A5.doc

* Commissioner McDowell
"I have maintained that we must follow five principles when considering reforms to the Universal Service Fund. We must: (1) slow the growth of the Fund; (2) permanently broaden the base of contributors; (3) reduce the contribution burden for all, if possible; (4) ensure competitive neutrality; and (5) eliminate waste, fraud and abuse."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A6.doc

For more on universal service and broadband, see Universal Service Reform and Universal Broadband