Letter to FCC Requests Immediate Acknowledgement and Response

Nineteen Senators backed declarations by the RLEC industry about the unintended consequences of the FCC’s USF/ICC Transformation Order, scoring rural carriers some much-needed encouragement. The Senators sent a letter to FCC Chairman Julius Genachowski on April 3, 2012 stating, “Unintended consequences on all carriers serving in rural areas can and should be alleviated by a formal FCC clarification that the Order will not be implemented in a manner that perpetuates unintended consequences.” The Senators ask the FCC to “be continually mindful of the need to encourage rural communications network investment,”—investments which have been made “in accordance with standards established by the Rural Utilities Service and in line with national policy objectives established by Congress in the Communications Act.”

The Senators note the importance of balancing the costs of the fund with the need to support rural carriers, and they list five areas of particular concern. They request the FCC to clarify:

1. It will not implement additional reductions in USF and ICC support pursuant to the Further Notice until the implications of the reforms and reductions adopted in the recent Order can be properly evaluated and understood;
2. It will ensure that lawfully incurred investments and operating expenses are not jeopardized by retroactive rule changes;
3. It will not deem any investments or expenses unlawful, imprudent or not ‘used and useful’ when such investments have been made in accordance with federal agency standards and mandates;
4. It will adopt a clear-cut and non-burdensome waiver mechanism that will allow cost recovery for carrier investments made in line with federal standards and mandates;
5. It will adopt a sustainable and predictable broadband oriented Connect America Fund for rural areas served by smaller rural carriers as it did for those served by larger carriers.

At the conclusion of the letter, the Senators “ask that the FCC immediately acknowledge and appropriately respond to the outline above to ensure all rural consumers are able to fully participate in the universal communications network Congress has envisioned through a long history of statutory actions in this regard.”

The letter hits at the core of the RLEC industry’s concerns with the Order and especially the FNPRM. Of utmost importance is that the FCC takes the necessary time to evaluate the impacts of the Order before adopting additional cuts and caps to high-cost support—the Senators clearly get this. The added emphasis on wanting an immediate response from the FCC is certainly promising—I know many of us will be anxiously awaiting the FCC’s response, and hoping it will be more comprehensive than some FCC responses to Congressional members have been on USF reform and other issues (as an example, Genachowski recently responded to Congressional concerns about rural call termination issues by simply telling them to read the February 6 Declaratory Ruling).

NTCA members played a vital role in this letter, as these concerns were communicated to members of Congress at the Legislative and Policy Conference last month. NTCA ceo Shirley Bloomfield released a statement about the letter, stating: “We welcome the interest of these Congressional leaders in ensuring that the substantial changes to essential Universal Service Fund (USF) and intercarrier compensation (ICC) support mechanisms announced last fall by the FCC will be implemented correctly and well-understood, prior to adopting additional changes that may reduce such support even further for small rural carriers. We’re encouraged that these leaders understand the vital role that USF and ICC support mechanisms, together with Rural Utilities Service and other financing, play in making sure that consumers have access to affordable advanced communications services in hard-to-serve areas, and that rural networks can be upgraded over time, as federal law mandates.”

Bloomfield continued, “These letters to Chairman Genachowski demonstrate the clear support in Congress for ensuring that small, community-based telecommunications providers can continue to attract capital, make sound investments in sustainable broadband networks, and offer advanced services that create jobs and bring needed economic development to our nation’s rural communities.”

Senator John Tester (D-MT) signed the letter, and commented on his website, "Montana needs a broadband plan that offers our rural and frontier communities the same economic opportunities as urban areas. Access to broadband service means access to new and bigger markets for Main Street businesses and job opportunities. That's why I'm fighting to make sure any national plan doesn't discriminate against Montana and rural America." In addition to Sen. Tester, the bipartisan letter was signed by Senators Harkin (D-IA), Grassley (R-IA), Begich (D-AK), Thune (R-SD), Hatch (R-UT), Barasso (R-WY), Chambliss (R-GA), Hoeven (R-ND), Conrad (D-ND), Johnson (D-SD), Risch (R-ID), Crapo (R-ID), Baucus (D-MT), Merkley (D-OR), Levin (D-MI), Enzi (R-WY), Lee (R-UT), and Inhofe (R-OK).

And now we wait for the FCC to respond…