McSlarrow: USF for Broadband Must Be "Tailored"

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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.

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