NCTA Says RUS Should Stop Broadband Loans Until Rules Are Fixed

Interim rules won't stop RUS from giving funding to areas where broadband already provided by operators

Cable operators have advised the Department of Agriculture's
Rural Utilities Service that it needs to fix its rules for handing out
broadband development loans under the Broadband Loan Program and should
stop handing out the money until that happens.

In a filing with the Department of Agriculture on interim
rules for the program, which is distinct from the broadband loans RUS
handed out as part of the stimulus package NCTA argued that the interim
rules won't stop RUS' practice of giving out
funding to areas where broadband is already provided by cable operators and

NCTA's issue with both the ongoing loan program and the
one-time stimulus package broadband funding was that it was going to
overbuild service where it was already provided, or essentially
government-subsidized service that hurts their members.

"Unless RUS
makes significant changes to the interim rules," said NCTA in the filing,
"we are concerned that this pattern of conduct could continue

NCTA argues that the rules should require RUS
to put a priority on areas where 100% of the households are unserved
and its second priority on where more than 75% of the households are

For determining unserved, it says, RUS
should use existing FCC and National Telecommunications & Information Administration
records, not RUS public notices, and
include those that are planning to provide service in the "near future."

NCTA also argues that RUS
should no longer treat companies getting support from the Universal Service
Fund or intercarrier compensation as though that was the same as
money from customers. "That approach, in which repayment of RUS loans
depends on perpetuating existing FCC subsidy regimes in their current form and
at their current level, is fraught with problems."

The FCC currently has plans to reform the Universal Service
Fund and is looking at possible changes to intercarrier comp as well.

"Until such changes are made, RUS
should not award any new loans under the interim rules," NCTA said.