NCTA Advises USDA to Help Institute FCC's USF Reforms

By John Eggerton -- Multichannel News, 1/31/2012 5:25:00 PM

The National Cable & Telecommunications Association has advised Secretary of Agriculture Thomas Vilsack to work with, not against, the FCC to reform the Universal Service Fund.

In a letter to Vilsack, NCTA President Michael Powell said that all parties had to make concession, but that the reform effort needs to proceed. Powell said he appreciated that the USF reform has "significant consequences" for the phone companies that receive loans from the USDAs' Rural Utilities Service, but that those rural carriers assertions that the reform order is a "downside only" approach is wrong.

"In light of the significant benefits provided to rural telephone companies in the USF reform order," said Powell, "it is disappointing that these companies are encouraging your agency to interfere with the commission's implementation of this new regime," he wrote.

NCTA was weighing in after the National Telecommunications Cooperative Association, OPASTCO and the Western Telecom Alliance wrote Vilsack to take issue with the FCC's USF reform, adopted last fall, and ask USDA to intervene, to advise against some of those changes.

"Although the FCC endeavored to direct the high‐cost USF and ICC toward a more sustainable, broadband-focused path, the Order does not provide the mechanisms and support levels necessary to enable sustainable broadband in areas served by RLECs," the telecom cooperative wrote in its letter.

Specifically, they asked Vilsack to advise the FCC not to: "reduce the rate of return available for investments made in rural areas; (b) apply and extend a series of new caps to further reduce USF support payments for rural local exchange carrier (RLECs); (c) eliminate the last vestiges of intercarrier compensation payments without a clear path for replacement or restructuring; and/or (d) carve up RLEC serving areas in a way that will make it even more difficult to justify new investments or recover existing investments."