Telcos Ask FCC to Reconsider USF Reform Proposal

Washington — Verizon Communications, Sprint
Nextel and USTelecom are among those challenging the
Federal Communications Commission’s recent revamp
of the Universal Service Fund, which provides phone —
and will eventually offer broadband — subsidies to hardto-
reach areas.

The commission in October voted to start migrating
the high-cost fund to broadband; to phase out legacy
phone support; to reduce duplicative payments, fraud
and abuse; and to reform intercarrier compensation —
the payments communications companies make to each
other for exchanging traffic over their networks — including
making it explicit that cable operators’ voice-over-Internet
protocol traffic should get equal footing with other
phone service when it comes to compensation for exchanging
and terminating traffic.

In a notice released last Thursday (Jan. 12), the commission
listed the parties that had petitioned the FCC for
reconsideration of the decision. The USF reform order already
faces court challenges from AT&T (a USTelecom
member) and the National Telecommunications Cooperative
Association. AT&T was particularly unhappy
with the VoIP true-up, suggesting that terminating circuit-
switched traffic was a lot more involved than interconnecting
VoIP.

Those opposed to the petitions have 15 days after the publication
of the notice in the Federal Register — that usually
takes a week or so — to respond, with replies to those oppositions
due 10 days after that 15-day window has closed.

Among those also petitioning the FCC for reconsideration
were MetroPCS, OPASTCO (Organization for the Promotion
and Advancement of Small Telecommunications
Companies) and the Western Telecom Alliance.

The notice came the same week FCC chairman Julius
Genachowski circulated an order reforming another USF
subsidy, the Lifeline program, which subsidizes phone
service to low-income households. The FCC is also looking
to migrate that fund to broadband, put it on a budget
— as it did with the USF high-cost fund — and weed out
duplicative support.