By
Don Evans703-812-0430
email
In a surprise to no one, the FCC has adopted the Joint Board’s
recommendation to cap high cost support to competing service providers in an
effort to slow the rapid growth of funds needed to support these carriers.
Veteran USF observers will recall that
almost a year ago, the Joint Board recommended this step, urging the FCC to act
swiftly on the proposal.
But as we have
seen, it takes monumental energy to change even slightly the $4 billion per year
momentum of that subsidy program – or any subsidy program.
Briefly, the Commission decided (after
getting the late support of Commissioner McDowell) that LECs could continue to
receive massive high cost support subsidies (amounting to about three-fourths of
the total funding) but competing carriers (primarily wireless operators who
contribute most of the money to the fund) should be capped at the funding levels
of this spring.
Because these are the
newest recipients of USF funds, the FCC said,
they are the ones causing the alarming
growth in the funding requirements.
The
FCC did grant ETC (eligible telecommunications carrier) status to dozens of new
carriers in new geographic areas, but these ETCs will now have to divide the
existing funding pie among themselves rather than simply getting a subsidy based
on their subscriber numbers and the subsidy level of the LEC in their market, as
in the past.
The capped funding level is
measured on a state-by-state basis so that state PUCs do not have an incentive
to grant ETC designations quickly in order to increase their state’s carriers’
percentage of the national pie.
The Commission did deviate slightly
from the Board’s recommendation as a sop to the new entrants.
First, it set the cap at March, 2008 levels
rather than the 2006 level sought by the Board.
This establishes a somewhat bigger pie to be
shared.
Second, the Commission excused
CETCs from the cap if they file their own cost support data like incumbent LECs
do.
This escape valve had been provided
to ALLTEl and AT&T in previous ad hoc orders, so it was to be expected
here.
Second, it excepted carriers
serving tribal lands or Alaska Native regions from the
cap, ostensibly because
the services provided by CETCs are less redundant in those areas than
elsewhere.
Because the FCC action rather dramatically favors wireline carriers over
non-wireline carriers in a realm that is supposed to be technology-neutral and
competitively balanced, reconsideration petitions and/or judicial appeals are a
virtual certainty.
Though the FCC pledged itself to timely action
on permanent reform of the USF process, would anyone care to bet that this
temporary “interim” cap will not still be in place three years f
rom now?
