Western Alliance Committee Report to the WTA Board of Directors
February 13, 2004
The next twelve to 18 months may well be a defining period in the history of rural telephony. Competitive challenges could be the least of our worries. During this period it is likely that the FCC will rewrite the rules which govern the mechanisms by which most of us receive the majority of our total company revenues.
USF is at risk in several ways. The most urgent is sufficiency of funding, with the Universal Service Joint Board on USF Portability and CETC Certification reportedly making a recommendation to the FCC in the next four weeks. Recent discussions with four of the Joint Board members provided me with a clear indication that the recommendation will contain some sort of cap or freeze on USF, with or without a primary line restriction under the guise of controlling the size of the fund.
Sufficiency and the sustainability of the USF are under attack through the continued certification of wireless CETCs by State Commissions, the Wireline Competition Bureau, and now the Commission itself. Continuation of this trend unabated will drive the total draw on the fund up by nearly $2 billion. I do not anticipate any standards for CETC certification contained in the Joint Board recommendation to be anymore stringent than the template laid down by the Commission in Virginia Cellular. In any event, any standards which the FCC puts in place will likely be permissive rather than mandatory for State Commissions.
Expanding the base of contributors is the only way to address the sustainability of the USF but it is highly unlikely that the FCC will address this issue in any meaningful way short of a Congressional mandate. While Senator Burns reportedly had proposed legislation that he intended to submit, he has done nothing to date. Congress has been sidetracked and inundated with requests to enter the fray before the FCC on the issues of primary line restriction and VoIP. In an election year, the chances that we will see legislation this year grows slimmer by the day.
Intercarrier compensation will move to the front burner during this same period. The ICF led by the BOCs and AT&T will likely be submitting a plan to the FCC based on bill and keep. At the same time the NPRM on VoIP will inevitably have to address intercarrier compensation in the form of access and reciprocal compensation in the termination of IP traffic.
Finally, in the last several weeks a number of members of Congress have announced their intention to open and rewrite the Telecommunications Act. At the very least, such an action will only increase the uncertainty for the future of our industry.
At this point you are probably wondering, so when do we hear some good news?
Well, whatever the Joint Board recommends goes to the FCC and they have a year to make a final decision. The FCC will notice its tentative decision and we will have an opportunity to comment.
Several members of the WA committee have been very active working with both the G8 and the Expanded Portland Group in the effort to develop an alternative to bill and keep that will be viable for the high-cost rural LECs.
Some state commissions may be backing off a little in their drive to bring more federal money into their states. Three days ago the Nebraska PSC denied Nextel Partners request for CETC certification.
Submitted by: Jack Rhyner, Chair, Western Alliance |
|
|
