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Thursday
Jul142011

Rural Associations Launch "Save Rural Broadband"

An Advocacy Campaign to Educate Consumers, Pressure Congress and FCC on USF Reform

With an impending FCC decision on Universal Service Fund reform looming over the telecom industry, NTCA, OPASTCO and the Western Telecommunications Alliance (WTA) launched a website and a social media campaign to educate consumers, the FCC and Congress about how the FCC’s reform plans threaten the viability of rural America. The new website, www.saveruralbroadband.org, provides consumers an opportunity to send a letter to legislators explaining that the FCC’s actions could result in job loss, stifle economic development and cause higher prices for telecom services. In addition to the informative website, consumers and rural telecom advocates can also get involved with Save Rural Broadband on social networking sites Facebook and Twitter.  According to the rural associations, the mission of Save Rural Broadband is to: “(1) show the Congress and Obama Administration how rule changes being considered by the FCC will have a negative effect on broadband networks in rural communities, and (2) urge Congress and the Obama Administration to intercede.”

NTCA, OPASTCO and WTA held a press conference about Save Rural Broadband on Capitol Hill on Thursday, July 14, which I attended. Representative Lee Terry (R-NE) and Senator Mark Begich (D-AK) joined Shirley Bloomfield (ceo of NTCA), Kelly Worthington (evp at WTA), and John Rose (president of OPASTCO) to discuss the importance of broadband for rural areas. Bloomfield warned of dire consequences for the rural telecom industry and rural Americans if USF reform is not undertaken very carefully, and she emphasized that USF reform should be about getting broadband to rural Americans, keeping it there, and keeping it affordable for everyone.

I was very inspired by Rep. Terry’s comments—he actually expressed great optimism during a time when rural telecom perspectives on USF reform are overwhelmingly negative. Terry discussed how he has been involved in USF reform efforts for 8 years, but we are finally “nearing the end” as he expects a resolution by the end of the year. Terry commented that “we’ve learned that [RLECs] like certainty,” referring to rate-of-return, and he added that it appears as though rate-of-return is no longer in danger of being eliminated anytime soon—something that I considered to be very good news. He also said that he is making progress in convincing his colleagues that reverse auctions are an unworkable solution and they will end up stranding investments in rural broadband. Terry is hopeful that the end result on USF reform will be a “win-win” for everyone (including the FCC), and it will help “get this economy booming again.”

Senator Begich also expressed optimism at the bipartisan progress—so far, 30 senators have signed on to a letter to the FCC asking that “new rules and regulations do not have unintended consequences and hamper our investment in rural communities.” Begich noted that it is a pretty significant accomplishment to get so many members of Congress—from both parties—on the same page on one specific issue. However, he said that USF and broadband is truly a bipartisan issue, and if USF reform is not done right there will be negative consequences down the road.  Begich described the unique broadband challenges in “extremely rural” Alaska, and he stressed that broadband is necessary for young people in rural Alaska, jobs, business, telemedicine, and education. He told a story of one community where the telecom co-op provides 31 jobs—in a subsistence economy where a gallon of milk costs $11.

As if USF reform couldn’t get any more challenging and stressful, today I was informed that Congress is pushing to “raid the USF to pay down the federal debt,” to the tune of $1b. A statement by NTCA explained that this “misguided plan” will result in RLECs being unable to repay RUS loans or make private investments in broadband, and will ultimately “end up adding to the federal government’s already out-of-control debt.” Senator Begich addressed this new challenge with concern, asserting that he is definitely against any proposal to cut $1b from USF. Begich said that this is not the time to “chip away at the telecom backbone,” especially if America has any intentions of being the best broadband economy in the world; he said, “that’s not what we strive for if we want to be the best.” I was extremely frustrated when I heard that Congress wants to cut $1b from USF because USF is not a tax in the sense that it is collected by the US Treasury. USF is a subsidy collected from telecommunications service fees for Congressionally-mandated telecommunications services, and it is definitely not a means to control the country’s debt problem. I was very pleased to hear that Begich is standing strong against this far-fetched idea.

To conclude the Save Rural Broadband campaign launch today, several RLEC executives answered questions from the media. John Rose asked the participants what will happen if the FCC’s plan goes into effect. Nancy White (ceo, North Central Telephone Cooperative) said that her company simply will not have the funds to repay loans for a FTTH project in rural Tennessee, which will have significant negative impacts on this rural community. She added that her RLEC is “the engine for economic development” in its isolated rural area, and there is really no business case for the “big guys” to step in and provide broadband if her company goes out of business. Mark Gailey (president, Totah Telephone Company) also agreed that his company would not be able to repay loans, and the community’s schools and public safety departments depend on the company’s broadband service. Catherine Moyer (Director of Legal & Regulatory Affairs, Pioneer Communications) added that there is a great deal of agribusiness in her Kansas RLEC’s territory, and she is most concerned about what will happen to the customers if there is a huge decline in revenue as a result of losing USF and ICC support.

All in all, it was a day of both positive and negative news. I am very happy about the bipartisan House and Senate efforts on USF reform—they seem like the real advocates of RLECs and rural broadband right now, which is definitely empowering. But, the FCC has been pointedly hostile towards RLECs and it may be a much bigger challenge to finally get them on our side, even with considerable bipartisan support from Congress. I definitely encourage everyone to check out http://www.saveruralbroadband.org/ and get involved in the campaign for reasonable USF reform.

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