USF Reform Heats Up

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Washington — Legislators and others continue to weigh in on reform of the Universal Service Fund program, as the Federal Communications Commission prepares to step in and resolve the debate, most likely by next month, according to sources inside and outside the agency.

There were calls for continued state participation in identifying carriers eligible for the USF — a program designed to shift phone revenue to rural and high-cost phone companies to make phone service widely available at affordable rates — senators stating their support for key elements of telco-based reform plans, and a call from rural phone companies not to kneecap them by moving too much support too quickly from rural phone service to broadband deployment.

In a letter to FCC chairman Julius Genachowski, Arkansas Gov. Mike Beebe said that while he supports USF and intercarrier compensation reform, he could not support a proposal that included pre-emption of a “state’s authority to promote the deployment and adoption of broadband.” Not surprisingly, the National Association of Regulatory Utility Commissioners agreed that pre-emption would be a bad idea.

Elsewhere on the USF front, seven Democratic and Republican senators signed on to a letter, also to the FCC chairman, supporting the pairing up of two industry proposals for USF reform, the so-called ABC plan from the major telcos and the proposal of the Joint Rural Association. The senators said that together, the two plans “appear to present a framework that the commission can use while crafting responsible … reforms.” They advised the FCC to retain “key elements” of the ABC plan, though they were not specific. The letter-signing legislators included Sens. Amy Klobuchar (D-Minn.), John Th une (R-S.D.) and Orrin Hatch (R-Utah).

Last week, the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunication Companies (OPASTCO) and the Western Telecommunications Alliance released a commissioned from Missouri State University that found that if the FCC reduced or eliminated phone support to 35 small phone companies in rural Missouri, it could cost 3,500 jobs in that state alone and put a $600 million-plus hit on the state’s economy. Such a move would reduce wages by $162 million through 2016 and reduce tax revenue by about $70 million, the report concluded.