Conditional Applause for FCC Reforms

Reaction came swiftly to FCC Chairman Julius Genachowski's speech outlining the FCC's Universal Service Fund/Intercarrier Compensation regime reforms.

"While we look forward to learning more about specific elements of the Chairman's plan, we agree with the Chairman that reforming universal service and intercarrier compensation is a historic opportunity that we must take advantage of," said the National Cable & Telecommunications Association. "We applaud the Chairman for specifically recognizing that high-cost support should only be targeted to areas that are not already served by cable operators or other providers that have invested private capital to serve rural communities."

Smaller cable operators were not as sanguine, suggesting that the order was tilted in favor of telco inbumbents (see separate story)

Google, Skype, Vonage and Sprint Nextel "strongly endorsed" FCC action in reforming what they called an antiquated system of phone subsidies, but they took issue with the chairman's suggestion that IP services might be subject to phone-sytle regs that they say were designed for the analog era.

"We are concerned that the Chairman's comments today suggest that the Commission may subject burgeoning IP services to old-fashioned phone service regulations such as access charges," they wrote in a joint statement.

The chairman had said that the reforms would "provide certainty going forward about the compensation for VoIP calls that either begin or end on the public switched telephone network, ensuring symmetry in the treatment of such traffic." Cable operators have argued that they weren't getting their fair share for terminating VoIP traffic.

In a statement, AT&T senior VP Bob Quinn called it a "fair, reasonable, plan" to finally reform the system. "For far too long, the FCC has wrestled with updating the universal service and intercarrier compensation rules for the broadband era.  Absent reform, these rules will simply loiter on to foster more litigation and arbitrage, and ultimately stifle innovation and the benefits of broadband for consumers," he said. "We and many others are committed to working with him and the entire Commission, as it works to bring this opportunity... across the finish line."

Genachowski said in his speech that the order was not a rubber stamp on any of the USF proposals from industry. That would include the Americas' Broadband Connectivity (ABC) plan backed by the big telcos. USTelecom appeared to confirm that, saying it still had some concerns with FCC order outlined Thursday. That said, USTelecom President Walter McCormick applauded the chairman's commitment to broadband connectivity and providing the right balance. He also said USTelecom would "continue" to work with the commission on the "complex" undertaking, other linguistic clues that he and those telecoms still think the order needs work before its scheduled Oct. 27 vote.

USTelecom had an ally in the American Consumer Institute, which called the chairman's speech an "important step forward" -- Genachowski had characterized it as "mile 25" of a marathon (which is a little over 26 miles). Institute President Steve Pociask urged the commission to closely track the ABC plan, which he said would "better target consumers, redirect high-cost support from outdated copper-based networks to state-of-the-art broadband networks, end hidden consumer fees, and better meet the changing demands of consumers."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.