NCTA: Telcos' USF Plan Falls Short

Submits modified ABC plan that it says would resolve issues

By John Eggerton -- Broadcasting & Cable, 8/25/2011 12:13:12 PM

The National Cable & Telecommunications Association politely but firmly slammed the incumbent LECs' USF reform plan in comments to the FCC. The commission had sought comments specifically on a trio of Universal Service Fund (USF) proposals, including the ABC (America's Broadband Connectivity) plan submitted by incumbent local exchange carriers (ILECs) AT&T, Verizon and other price-cap regulated telcos.
 
NCTA, which earlier in the week signaled its unhappiness in a joint letter with the American Cable Association, was less pointed than ACA in its criticism, saying it supported many individual proposals and appreciated the "contributions" of the ILECs to the debate. But the bottom line for NCTA was that the plan was lacking in three key areas.
 
NCTA said the ABC plan was "attempting" fiscal responsibility, but falling short with "aspirational" targets rather than hard ones. "The Commission can and should establish mechanisms to ensure that the program promotes greater efficiency and expands the availability of broadband without placing any greater burden on consumers than it does today," said the cable trade group. Specifically, that would include funds going to ILECs without any demonstration of need, while providing no comparable support to smaller competitors, even in the rural markets that are in the fund's wheelhouse.
 
NCTA called those and other ILEC proposals "relics of the past" that have no place in the fund's future.
 
Telecom companies pay into the USF fund to subsidize phone service in areas where the market would not support it otherwise. Central to the FCC's proposed reform of the fund is migrating it to support broadband, today's must-have telecom technology.
 
NCTA also has issues with the relative treatment of VoIP and incumbent non-VoIP services.
 
As part of its comments, NCTA submitted a modified ABC plan it said would resolve those issues and that it would be willing to support. That would include preventing any USF broadband subsidies to incumbents where at least one competitor not receiving USF money was offering service, or in any census block that received stimulus funding from the Rural Utilities Service or NTIA for broadband build-out.