Rural telco groups want the FCC to rethink its USF reform program

The FCC's revised Universal Service Fund (USF) program continues to draw fire from rural telco organizations that believe it could be detrimental to the companies they represent.

Three organizations--the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), the Western Telecommunications Alliance (WTA) and the National Exchange Carrier Association (NECA)--have jointly filed a petition for reconsideration and clarification with the FCC.

One group absent from the petition was the National Telecommunications Cooperative Association (NTCA), which previously filed its own legal challenge against the new rules late last year.  

The groups asked the regulator to reconsider three key areas:

1. Rate-of-return: Although rural service providers are set on providing broadband services, they said the order imposes significant broadband-related public interest obligations on rate-of-return carriers without having specified a Connect America Fund (CAF) mechanism for rate-of-return companies. The group believes that "The Commission should make sure sufficient and predictable funding is in place before imposing new service mandates."

2. Capping mechanisms: The group believes the FCC should reconsider or modify several of the other capping mechanisms in the Order, including its "methodology for determining a reasonably comparable rate floor, and reconsider its decision to phase-out safety net additive support."

3. Petitions: Each of the organizations think that the Commission should also reconsider its approach to examining petitions for waiver of new rules and support limitations, and reduce burdens associated with new reporting requirements on small companies. "Changes are needed to the Commission's method for prescribing a new interstate authorized rate of return, as well as several of the ICC provisions of the Order," the group said in the announcement.  

Derrick Owens, WTA's Vice President of Government Affairs, said that even though its member telcos are dedicated to delivering broadband in their respective territories, the "Order will limit investment rather than promote it." 

For more:
- see the release (pdf.)
- Telecompetitor has this article

Special report: Year in review 2011: The stories that dominated the wireline industry

Related articles:
Year in review 2011: FCC's USF and ICC reform
NTCA asks FCC to review its USF/ICC reform stance
FCC lays out USF reform plan that redirects funds to broadband
FCC's Genachowski to reveal USF reform plans
6 large telcos put broadband, USF reform proposals on the table

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