NCTA’s Letter to Vilsack Juxtaposes Rural Associations’ Earlier Plea

Vilsak, USDA Hit with Mixed Messages about USF/ICC Reform

A letter to Secretary of Agriculture Tom Vilsack from National Cable and Telecommunications Association (NCTA) ceo Michael Powell illustrates that one group’s perceived “sword of Damocles” is another group’s perceived “well-considered work of an expert agency.” Last month, rural associations NTCA, OPASTCO and WTA wrote to Vilsack, pleading for assistance and input from RUS and the White House Rural Council in the fight against the FCC’s USF/ICC Reform Order. On January 30, 2012, Powell likewise appealed to Vilsack, but with a very different message than the one conveyed by the rural associations. NCTA argued that the rural associations presented a “’downside only’ approach which does not withstand scrutiny;” and the USF Reform Order actually “recognizes the important role that rural telephone companies have played in brining voice and broadband services to high-cost areas of the country and it provides those companies significant benefits not afforded to competitors.”

NCTA goes on to explain that the USF Reform Order allows for $2b in high-cost support just for rural telephone companies, sets in motion a very long transition to bill-and-keep; and if that isn’t enough, there’s a waiver process as a backstop. NCTA tells Vilsack, “In light of the significant benefits provided to rural telephone companies in the USF Reform Order, it is disappointing that these companies are encouraging your agency to interfere with the Commission’s implementation of the new regime.” NCTA furthermore encourages RUS to revise its financial models, and “revise its approach so that it no longer makes loans that depend on continued receipt of high-cost support in areas where other providers are offering robust, competitive broadband services.” NCTA asserts that continuing to provide loans for rural telephone companies in competitive markets “wastes scarce government resources and jeopardizes private investment made in those rural areas, often by small cable operators.”

NCTA’s comments stand in stark contrast to the sentiments of the rural associations. Cable providers frequently complained of being slighted in the USF/ICC Reform proceeding, for example, by not being included in the Consensus Framework—so it may come as a bit surprising that NCTA is now applauding the FCC’s efforts, particularly efforts that directly harm rural telephone companies, many of whom are also cable providers.

Will Vilsack pick up the glass that’s half full (cable), or that glass that’s substantially more than half empty (RLEC)?