| JULY 14-16, 2014

ACA to FCC: Reject telco USF reform plan

The American Cable Association (ACA) filed comments with the Federal Communications Commission (FCC) today urging the commission not to adopt a plan submitted by six major telcos to transition the Universal Service Fund to a more broadband friendly program.

The telco plan, called “America’s Broadband Connectivity,” contains “financially imprudent and economically outdated ideas advanced by incumbent phone carriers clinging to monopoly-era support mechanisms overtaken by technology and market forces,” the ACA asserts.

“For the first time in our nation’s history, the FCC has a real opportunity to rely on the USF to fund broadband facilities and services in rural communities, which the country must include in the Internet revolution,” ACA President and CEO Matthew M. Polka said. “Without a doubt, the FCC will fall short of its mission if major phone companies insist on ballooning the size of the high-cost fund and demand on receiving USF money in markets where they face competition or where competitors can offer service more efficiently.”

Transforming the current USF into a mechanism to spur broadband network deployment and service adoption is a part of the FCC’s National Broadband Plan. The six telecommunications companies – AT&T, CenturyLink, Fairpoint, Frontier, Verizon, and Windstream – offered their suggestions within the America’s Broadband Connectivity plan and claimed support from such rural telecommunications associations as the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies and Western Telecommunications Alliance. Information about the telco plan can be found at http://americasbroadbandconnectivity.org/.

However, the ACA says this plan merely forwards the interests of the six communications service providers, to the detriment of ACA members who compete with the six telecom companies. The association has offered its own suggestions for USF reform, which it says includes adoption of a permanent cap on the $4.5 billion high-cost fund; distribution of funding to broadband providers on a competitively neutral basis; and elimination of current high-cost funding support for large phone companies within two years. The ACA also proposes that the FCC offer eligible smaller phone carriers the ability to draw from the high-cost fund for eight years so long as they agree to commit to provide broadband service in all their service areas at verifiable minimum downstream and upstream speeds.

Details of the ACA’s proposal can be found on the association’s website.


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