Powell: Reform USF With Consumers in Mind

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Washington — Making his self-described maiden voyage
as a Capitol Hill witness for the cable industry, National
Cable & Telecommunications Association president and
CEO Michael Powell put in a
pitch for competitive neutrality
and fiscal responsibility
when it comes to universalservice
fund and intercarrier
compensation reforms.

Federal Communications
Commission chairman Julius
Genachowski is already
circulating his proposal on
USF/ICC reforms for a vote
on Oct. 27, but that didn’t stop
the Senate Commerce Committee
from trying to light a
fire under the effort last week
in a hearing on the FCC’s USF
reform, or suggest it might still
legislate in that area.

Committee chairman Sen.
Jay Rockefeller (D-W. Va.) noted Powell’s return — he was a familiar
face as FCC chairman during the George W. Bush administration
— but noted that the agency was “not thrilled
about the thought of our having this hearing,” he said, citing
conversations with “relevant folks.” Genachowski has already
committed to an extensive proposal (circulating it means the
chairman has voted for it) that one senator in another venue
described as trying to “thread the needle” on USF reform.

Rockefeller suggested Congress could still help in that effort.
“We are very much behind the FCC to push forward something
in the relatively near future,” he said, adding that FCC
commissioners should hear from Congress, as well as from
one another.

So the FCC may not have the last word on USF, the program
designed to shift phone revenue to rural and highcost
phone companies to make service widely available
at affordable rates. Rockefeller said Congress chould still
pass universal-service reform legislation, and ranking
member Kay Bailey Hutchison (R-Texas) said there was
also the Congressional Review Act if the FCC did something
Congress didn’t like.

The senators at the hearing had no specifi c FCC plan to vet,
since it has not yet been made public; Rockefeller also pointed
out that it had not been created with help from the committee.
So the hearing included legislator suggestions on what the FCC
should or should not do — cap the fund, for instance, or don’t
subsidize where there is an unsubsidized competitor — and
comments on the telco-backed America’s Broadband Connectivity
(ABC) proposal, which the FCC plan is said to resemble.

Powell told the committee
that for all the arcane and
difficult issues of USF reform,
the key was to write those reforms
with the consumers,
not companies, in mind. He
said the fund was not designed
to maximize profits or
guarantee loans, but to provide
communications services
to consumers at affordable
rates. He echoed criticisms of
the ABC plan, but said NCTA
still agreed with the majority
of it and called it a good
starting point, though not the
right end point.

It is not clear how much
of cable’s wish list will be in
the FCC’s proposal.

Powell suggested that consumer focus would mean not giving
a right of first refusal to incumbent phone companies for
broadband subsidies when cable operators, given a chance to
compete for it, might be able provide better, more affordable

Powell had an ally in Sen. Mark Warner (D.-Va.), who said he
thought that the incumbent telco right of first refusal was “too
blunt an instrument.”

Warner also said that if cable were going to be competing
for the USF broadband money, the reforms should mandate
robust, timely and affordable interconnection, so that phone
incumbents with that infrastructure could not drag their feet
on interconnection.