McSlarrow: USF for Broadband Must Be "Tailored"

NCTA chief to testify in June 24 Senate hearing on migrating Universal Service fund to broadband

By John Eggerton -- Multichannel News, 6/23/2010 5:08:47 PM

The Senate Commerce Committee will hear from National Cable & Telecommunications Association President Kyle McSlarrow and three of the five FCC commissioners June 24 as the committee ponders migrating the Universal Service Fund to broadband.

According to a copy of his testimony, McSlarrow plans to tell the committee that cable operators support considering changes to the program to achieve universal access, but that given the history of "staggering growth" in the fund--almost everybody agrees some reform is needed--"the role of USF in promoting broadband must be carefully tailored to unserved areas and populations."

McSlarrow argues that USF subsidies for broadband should only go to areas that don't have broadband facilities. He points out that cable broadband is in 92% of the country.

As with the broadband stimulus funds being handed out by the Commerce Department, NCTA is concerned that the USF money not go to overbuild its members. "It would be a poor use of scarce government resources to subsidize a broadband competitor in communities--including many small, rural communities -where cable operators have invested risk capital to deploy broadband services," McSlarrow says.

He added that it also might discourage the incumbent from continuing to risk that capital. "Government subsidies for one competitor in markets already served by broadband also might discourage the existing provider from making continued investments in its network facilities.

The FCC proposed a timeline for migrating the fund to broadband in the National Broadband Plan, which it said could be paid for by shifting existing funds around, though could be achieved faster with additional money from Congress. But in the wake of the BitTorrent decision calling into question the FCC's broadband oversight authority, there has been some question about whether or not they had the authority to make that move.

McSlarrow and NCTA have argued that it can be done without reclassification of broadband under Title II common carrier regulations. Look for the issue of reclassification and its impact on the plan to come up in the hearing.

MCSlarrow also put in a plug for S. 2879--sponsored by committee chairman Jay Rockefeller (D-W. Va.)--a bill that would expand the fund's lifeline phone service program to broadband. He said a key element of the proposal is that it is technology neutral, which he added is a critical component of any broadband adoption program.

Also scheduled to testify are Commissioners Michael Copps, Meredith Attwell Baker and Mignon Clyburn. Copps has said that he is concerned that portions of the broadband plan could be jeopardized without Title II reclassification, which he has pushed for in even stronger form than proposed by FCC Chairman Julius Genachowski.