NCTA's Powell: Incumbent Telco USF Plans are Not Consensus Offerings

Supports putting a hard cap on $4.5 million fund
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National Cable & Telecommunications Association President Michael Powell plans to tell the Senate Commerce Committee that Universal Service Reform proposals put forth by the large incumbent carriers -- Veizon, AT&T, Centurylink among them -- and by some small, rural incumbent telcos have been misrepresented as consensus proposals.

"The plans were created by, and are endorsed by, the incumbent phone companies and include many provisions designed to benefit those companies to the detriment of their competitors," he plans to tell the legislators, according to prepared testimony for a Senate Commerce Committee hearing on Universal Service Fund reforms being contemplated by the FCC.

Powell plans to reiterate the cable association's opposition to giving incumbent carriers a right of first refusal on funds that cable operators could use to provide service, and its support for putting a hard cap on the $4.5 million fund. Those are both positions shared by the American Cable Association, which held a press conference with reporters Tuesday to reiterate those points in advance of the Oct. 12 Senate hearing.

NCTA and ACA joined in asking the FCC to modify the telco proposals to reflect those concerns about competitive neutrality and fiscal responsibility.

FCC Chairman Julius Genachowski has signaled that the FCC's USF reform plan, currently being circulated among the other commissioners, will include some kind of right of first refusal, which was confirmed on background by an FCC staffer, who added that it was not identical to the large-telco proposal, however.

ACA execs said Tuesday that while they had not seen the FCC plan, and that there could be some differences from the telco proposal--a five-year window for right of first refusal instead of 10, for instance -- it still represented billions of dollars over several years that cable ops would not have access to.

Powell also says in his tetstimony that the FCC should end subsidies to providers that face competition from unsubsidized providers, and that when it came to network compensating each other for terminating traffic on their respective networks -- so-called intercarrier compensation reform, which is the other portion of the FCC reform proposal -- cable's carriage of VoIP traffic should be treated the same as circuit-switch voice when it came to being paid to exchange and terminate that traffic on its networks.

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