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Sunday
Oct092011

Response to USF/ICC Rules Varied, but Everyone Wants More Details

Genachowski’s Speech Prompts Industry-wide Reactions—to What, Exactly?

FCC Chairman Julius Genachowski presented a sneak-peek at the FCC’s highly anticipated USF/ICC reform rules on October 6, but many industry stakeholders are still scratching their heads trying to figure out specific details of the yet-unreleased draft rules. Genachowski made a point to say that the draft rules are not a carbon copy of the ABC Plan/RLEC Plan/Consensus Framework, but he did not specify exactly what parts of the industry plans would be included or rejected (see The ILEC Advisor: Finally – Genachowski’s Big Announcement on USF/ICC Reform for a summary of his full speech). I guess we will all just have to keep waiting…

Key USF/ICC stakeholders wasted no time in releasing statements about Genachowski’s speech. Although the reactions ranged from approval to frustration, one thing was clear: everyone wants more information as soon as possible.  Some statements were quite vague, and others seemed to make assumptions about the unseen rules inferred from Genachowski’s remarks. The ILEC Advisor has been covering different industry perspectives on USF reform over the last few months, and most of the reactions to today’s announcement were consistent with the mountain of comments and ex parte filings that have accumulated since February’s NPRM.

Here’s a rundown of reactions—good, bad and indifferent (in no particular order):

  • Shirley Bloomfield, NTCA ceo: “As this long-running process draws to a likely close in the coming weeks, we will continue to press for common-sense reforms that recognize the unique challenges faced by small carriers and the consumers they serve in rural areas across the country.”
  • Kelly Worthington, WTA executive director: “We look forward to seeing the details of the Chairman’s proposals. Only then will we be able to determine whether rural networks will be strengthened by the reforms.”
  • Matthew M. Polka, America Cable Association president and ceo: “The Chairman’s plan locks in a sole-source contract worth billions over 10 years to a handful of incumbent large telecom companies to deploy broadband at maximum speeds that are below average. It favors one small group of providers over others to the disadvantage of consumers. By excluding thousands of broadband providers willing, able, and eager to compete to provide service to consumers living in rural areas where government support is provided, it will deprive these communities of receiving the best possible service at the lowest possible price.”
  • Steven Berry, Rural Cellular Association president and ceo: “Chairman Genachowski delivered a fine policy speech highlighting the many reasons USF reform is imperative. I am glad to see he is focused on consumers and bringing broadband solutions to all Americans, but details remain elusive, and we must carefully review the proposal… I can only hope that wireless solutions have an opportunity to flourish in this new plan.”
  • Matt Wood, Free Press policy director: “We hope that Chairman Genachowski is sincere in his pledge to give the American people something better than the industry’s profit-padding wish list. But knowing how doggedly these companies pursue what they want, no matter how much it harms the public, we’re going to be vigilant and make sure that the Commission abides by that promise.”
  • Tony Clark, NARUC president, and John Burke, NARUC Telecommunications Committee chair: “We are very anxious to get additional details on the mechanisms for Intercarrier Compensation reform, including how Voice over Internet Protocol traffic will be integrated into the system to avoid arbitrage opportunities. Indeed, some elements of the speech raise a host of unanswered questions but also the specter of long term and serious unintended consequences for consumers.”
  • Bob Quinn, AT&T vp-federal regulatory & chief privacy officer: “FCC Chairman Genachowski deserves credit for bringing this important issue to this point. We and many others are committed to working with him and the entire Commission as it works to bring this opportunity for a fair, reasonable plan across the finish line.”

A common point of tension seems to be whether or not the FCC’s plan will be good for consumers. However, what is best for consumers—lower telephone rates, or expanded broadband availability?  More importantly, can both of these lofty goals be achieved in one fail swoop? If, for example, access rates were reduced significantly, would the big telcos pass the savings along to consumers directly, pocket the extra cash, or reinvest it in the network? I imagine these questions will not be answered until after the rules are implemented.

It is not just industry groups reacting to the FCC’s proposed rules (whatever they may be). Congress is weighing in as well. A bipartisan October 4 letter to Genachowski signed by Representatives Lee Terry (R-NE), Mike Ross (D-AR) and 33 mostly rural representatives states, “It’s our judgment that the FCC must act swiftly yet carefully to enact reforms that allow all Americans – particularly those in hard-to-serve rural communities – access to the burgeoning services and opportunities that are being created via innovation in broadband technology.” The Representatives “urge the FCC to maintain the key elements of the America’s Broadband Connectivity and Joint Rural Association proposals,” which “clearly [create] a path forward for comprehensive USF and intercarrier compensation reform.”

While it is admirable that so many Democratic and Republican Representatives came together in support of the Consensus Framework, the FCC’s final rules might not have a VIP pass in the Senate. On October 5, the Senate Commerce Committee announced an October 12 hearing on the FCC’s USF/ICC reform efforts. Apparently, “Congressional Democrats have expressed concerns that the plan won’t sufficiently protect consumers.” I wonder if the Senate Commerce Committee will actually see the plan before the hearing next week, or if they have already seen it? It seems premature to set a hearing about rules that have not even been approved or reviewed by the public, but there doesn’t seem to be much love between Congress and the FCC these days.  

The draft rules were supposedly circulated to FCC Commissioners, as the rest of us anxiously await more details. Let the speculation continue!

Reader Comments (1)

Isn't it ironic that the "most transparent FCC ever" (as promised by Chairman Julius Genachowski) is not publishing its proposed rules for the public to see before a vote? Perhaps the reason is that -- as the Chairman's speech suggests -- that it will be engaging in arbitrary, politically motivated picking of winners and losers rather than allowing consumers to make their own choices? The Chairman's statement that he intends to relegate WISPs to only the "most remote" areas (even though they do a great job in cities, including DC!) is an example of arbitrary and harmful discrimination against innovative technologies in favor of the antediluvian, fat, monopolistic incumbent telephone companies.

October 10, 2011 | Unregistered CommenterBrett Glass

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