NCTA Gives Shout-Out to Boucher USF Bill

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The National Cable & Telecommunications Association plans to reaffirm its general support for the brand of Universal Service Fund (USF) reform proposed by House Telecommunications Subcommittee Chairman Rick Boucher (D-Va.).

That is according to a copy of the prepared testimony of NCTA executive vice president James Assey for a Sept. 16 hearing in that subcommittee on the bill.

The fund is paid into by telecom companies, including cable, to help pay for providing telecommunications/information services, where it is tough geographically and/or economically to do so.

The bill is not perfect, Assey plans to point out, including leaving questions about the ultimate size of the fund, but suggests H.R. 5828 is a compromise cable operators can live with and a good first step on the road to fund reform.

One thing NCTA calls significant is that the bill funds deployment of broadband without requiring it to be "classified or regulated as a Title II telecommunications service."

There has been disagreement over whether the commission has the authority to migrate the fund from phone to broadband support in the absence of the regulatory clarifying FCC chairman Julius Genachowski says could be supplied by his "third way" Title II approach, but NCTA has long argued that the agency has sufficient authority already.

In his testimony, Assey wrote that one way to minimize the impact on consumers, who pay for companies' USF contributions on their phone bills, is by incentivizing the private sector via a regulatory climate that "promotes private sector investment and innovation by providing certainty and eliminating all unnecessary regulatory burdens."

NCTA has argued that going the Title II route would do the opposite.

Assey called the bill a "sound first step" in modernizing the fund, saying that it "recognizes that government subsidies are neither necessary nor appropriate in competitive areas where the marketplace is working," though NCTA would prefer the bill make that point a bit more definitively by making broadband support "expressly limited to unserved areas."

As with the billions in broadband stimulus funding being handed out, NCTA is concerned that government money will be used to underwrite competition to existing cable broadband service rather than to those who have no service at all.

The bill does include reducing or eliminating the high-cost fund support in areas where more than 75% of households can get service from a non-incumbent provider, but Assey said the bill should clarify that includes places where at least two competitors can combine to reach that 75%, meaning that there will still be choice among two providers, just not necessarily the same two.

The FCC has made migrating the fund from phone to broadband a priority in its National Broadband Plan, in the process addressing complaints about waste fraud and the growth of the fund.