Sen. Warner Concerned USF Reform Funds Skewed Toward Incumbents

Says competitive neutrality should remain a key component of the USF
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Cable operators continue to have an ally in Virginia Democratic Senator Mark Warner on the issue of Universal Service Reform and giving cable operators a share of the funds and the ability to compete with incumbent phone companies.

In a letter to the FCC Friday (Oct. 12), Warner said he was "very concerned" that the reform proposal "appears to award the vast majority of funding to incumbents with little or no opportunity for competitive broadband providers to participate."

He said competitive neutrality was adopted as a key component of the Universal Service high-cost fund and should remain so. He said that creating "separate streams" of funding for different types of providers "further dilutes limited taxpayer funds for deployment."

Warner, a former telecom exec (his company became Nextel) also said he did not think a right of first refusal was necessary, something cable operators small and large have been saying. He said at best the right should be a bidding credit in an open auction, saying being an incumbent already gives them an advantage. He also argued that if there is a right of first refusal -- which means incumbent telcos get first dibs on USF subsidies for broadband in areas where they currently get those subsidies for phone service, there should be accelerated build-out requirements.

He also calls for clear requirements for interconnection with facilities-based VoIP. He points out that if a carrier -- like a cable competitor -- cannot get interconnection to the incumbent's network, whether a switched phone net or an IP network, competition will not be robust and consumer will suffer.

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