Cable operators believe that while the Universal Service Fund (USF) is in need of repair their two main industry associations--the American Cable Association (ACA) and the National Cable Telecommunications Association (NCTA)--don't agree with the traditional telcos' proposal that was submitted to the FCC earlier this summer.
The FCC wanted industry comments on a number of USF issues, including the ABC (America's Broadband Connectivity) that was submitted for review by six of the largest traditional telcos, including AT&T (NYSE: T), CenturyLink (NYSE: CTL), FairPoint (Nasdaq: FRP), Frontier (NYSE: FTR), Verizon (NYSE: VZ) and Windstream (Nasdaq: WIN).
A key element of the FCC's USF reform strategy is to drive funding towards building out new broadband networks.
In a joint letter to the FCC, the NCTA said that while it agrees with a number of the proposals and the ILEC's "contributions," they believe that the proposal does not properly address four major issues. Those issues include modernizing USF and intercarrier compensation, fiscal responsibility, and accountability.
Although the NTCA said the ABC plan showed some potential to drive fiscal responsibility, it argued the telcos' plan did not offer enough specific targets to reach that goal.
"The Commission can and should establish mechanisms to ensure that the program promotes greater efficiency and expands the availability of broadband without placing any greater burden on consumers than it does today," said the NCTA.
In its letter, the NCTA made two specific suggestions to the FCC to resolve the issues it has with the proposed ABC plan. The NCTA suggested that the FCC should not allocate USF broadband subsidies to incumbent service providers where another competitor is offering service and is not receiving USF funds, nor to any community that was awarded a broadband stimulus funding grant from the Rural Utilities Service or NTIA.
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