The Rural Carriers Supporting State Universal Service Funds
Nearly 100 RLECs in five states joined together to file comments with the FCC last month to express support for continued state involvement as the Commission moves to overhaul Universal Service Funding and Intercarrier compensation.
The so-called “Rural Carriers” made the filing “because of the important role that state high-cost universal service funds play in maintaining, and hopefully expanding broadband service availability in the areas that they serve.”
The filers note that they all operate in states where high-cost universal service programs have either been implemented or are under consideration, and point out that in its February Notice of Proposed Rulemaking on the topic, the Commission also cited several states with existing or developing USF programs. The filers go on to conclude that “Such widespread existence of state universal service fund programs makes it apparent that explicit state funding of high-cost areas is essential to continuing voice service and to maintaining and expanding broadband availability.”
The Rural Carriers argue that the FCC would be wasting time and resources should it pursue a strategy of trying to determine “how to bring intrastate rates under the reciprocal compensation framework if states do not act within a certain timeframe.” They urged the Commission to recognize the jurisdictional authority of the states and to “recognize the limits of its authority.”
The filing suggests that the Commission should therefore work closely with states to bring intrastate access charges in line with interstate rates, to eliminate arbitrage and to provide revenue where necessary for continued broadband deployment.
The Rural Carriers add that the Commission should not only provide guidance, but also financial incentives to states to undertake state universal service programs. Specifics proposed by the group include: “Customers in so-called net payer states should only be asked to contribute to other states’ universal service costs after net recipient states have taken appropriate actions, such as lowering access rates and allowing recovery of the reduced revenue through the establishment of high-cost universal service funds to support service in rural, high-cost and insular areas.”
The group concludes that failure to establish a mechanism whereby individual states share in the responsibility for universal service funding “would place continued provision of universal service to rural, high-cost areas at substantial risk, and would likely result in substandard or unavailability of broadband service in rural, high-cost areas.”