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FCC Opens CommentsOn NCTA USF Proposal

The FCC has issued a
request for comment on the National Cable & Telecommunications
Association's proposal to reform the Universal Service Fund by creating a
two-tiered process to determine where there is effective competition that would
reduce or eliminate support payments.

In a notice issued
Wednesday, the FCC gave commenters until Jan. 22 to weigh in on NCTA's

Calling it a
"modest first step" on the road to Universal Service Reform, the
National Cable & Telecommunications Association on Nov. 5 told the FCC it
knows how the FCC can save the government up to $2 billion, freeing it up to
help underwrite ubiquitous broadband deployment.

In a petition for
rulemaking, NCTA said that sum can be recovered by no longer providing subsidies
to phone companies in rural areas where competition exists from new entrants,
like cable companies for example.

NCTA argues that the
subsidy, which was meant to support service where no other was available, no
longer reflects a marketplace in which consumers can choose cable voice service
in much of the country.

NCTA includes a
study it says shows where the FCC is providing billions in subsidies to phone
companies where they have unsubsidized competitors.

NCTA wants a
two-step process. First, it wants a petition--a cable company for example--to
be allowed to demonstrate that an unsubsidized wireline competitor serves more
than 75% of customers in a given area, or that the state has found
"sufficient competition" to deregulate retail rates charged by
incumbent carriers. If that threshold was met, the FCC would require the USF
recipient to demonstrate the minimum support necessary to serve the
noncompetitive portions of the service area.

The cable trade
group argues that before the fund can be extended to underwrite broadband as
well as phone service the FCC must first "control the size of the existing

The FCC's Wireline
Competition Bureau wants to hear more.