Thursday, July 28, 2011

Leading Carriers Submit USF/ICC Plan to FCC

A coalition of six of the leading carriers in the U.S., submitted a proposal to the FCC for reforming the Universal Service Fund (USF) and the Intercarrier Compensation (ICC) system. Members of the group include AT&T, CenturyLink, FairPoint, Frontier, Verizon and Windstream -- which collectively serve the vast majority of U.S. wireline customers, including those residing in high-cost rural areas, which are the primary focus of USF support.


The big telcos said the key aim of their proposal is to speed broadband deployment to more than 4 million Americans living in rural areas. They also announced an agreement with three organizations that represent small carriers on a framework for complementary reform. Joining the companies in support of reform are the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies and Western Telecommunications Alliance.


Core components of the proposal, called America's Broadband Connectivity Plan, include:


Focusing the Universal Service Fund on Broadband Deployment


Consistent with the National Broadband Plan, a new Connect America Fund (CAF) would transition the USF over five years to an exclusive focus on broadband deployment. Key features of the plan:



  • Connect virtually all Americans to broadband access within 5 years.

  • Do so without growing the $4.5 billion high-cost USF..

  • Target support to broadband deployment in areas where there is no business case for companies to provide service..

  • Promote efficiency by targeting support more precisely to identified high-cost areas, and supporting only one provider in each area.

  • "Broadband" is defined as a minimum of 4 mbps downstream and 768 kbps upstream (supporting robust education, health care and other applications).


Rationalizing an Outdated Intercarrier Compensation System


The proposal seeks to modernize intercarrier compensation to provide certainty, stability and a healthy foundation for growth to meet the needs of consumers.



  • Transition terminating intercarrier compensation to a low, uniform default rate of $0.0007 per minute over a five- to eight-year timeframe.


  • Eliminate, through new rules and lower access rates, costly arbitragescams that exploit today's outdated rules at the expense of broadband companies and consumers, as well as FCC resources, as the Commission chases after these fast-proliferating schemes.


"After years of debating and discussing how to update the universal service and intercarrier compensation programs for the broadband era, a workable framework has emerged," said Hank Hultquist, vice president, AT&T Federal Regulatory. "To truly bring broadband services to all Americans, the rules of the road for the black rotary phone desperately needed to be updated for today's competitive, high-speed communications networks. We look forward to continuing to work with policymakers, Congress and others to ensure we accomplish this important goal this year."


"This plan recommends significant federal regulatory reforms to achieve the goal of connecting more Americans to broadband," said Melissa Newman, vice president, CenturyLink Federal Regulatory Affairs. "The policy changes offered in this proposal also are necessary for bringing long-term stability and predictability to the nation's universal service program. We look forward to working with the FCC as it develops an order that ultimately will provide consumers with the support they need to connect to broadband and its many opportunities."


"This proposal modernizes the USF and ICC mechanisms as our industry migrates toward a broadband-oriented future," said Mike Rhoda, senior vice president, Windstream Government Affairs. "Importantly, the proposal provides an adequate transition period for carriers to move from the current structure to one that will meet the changing needs of telecommunications consumers and help close the rural-rural divide that has persisted under the existing flawed framework." http://www.windstream.com http://news.windstream.com/article_display.cfm?article_id=1313"After years of debating and discussing how to update the universal service and intercarrier compensation programs for the broadband era, a workable framework has emerged," said Hank Hultquist, vice president, AT&T Federal Regulatory. "To truly bring broadband services to all Americans, the rules of the road for the black rotary phone desperately needed to be updated for today's competitive, high-speed communications networks. We look forward to continuing to work with policymakers, Congress and others to ensure we accomplish this important goal this year."

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