The National Cable & Telecommunications Association plans to
reaffirm its general support for the brand of Universal Service Fund (USF)
reform proposed by House Telecommunications Subcommittee Chairman Rick Boucher
That is according to a copy of the prepared testimony of NCTA EVP
James Assey for a Sept. 16 hearing in that subcommittee on the bill.
fund is paid into by telecom companies, including cable, to help pay for
providing telecommunications/information services where it is tough
geographically and/or economically to do so.
The bill is not perfect, Assey plans to point out, including
leaving questions about the ultimate size of the fund, but suggests H.R. 5828
is a compromise cable operators can live with and a good first step on the road
to fund reform.
One thing NCTA calls significant is that the bill funds deployment
of broadband without requiring it to be "classified or regulated as a
Title II telecommunications service."
There has been disagreement over whether the FCC has the authority
to migrate the fund from phone to broadband support in the absence of the
regulatory clarifying FCC Chairman Julius Genachowski says could be supplied by
his "third way" Title II approach, but NCTA has long argued that the
FCC has sufficient authority already.
Assey points out that one way to minimize the impact on consumers,
who pay for companies' USF contributions on their phone bills, is by
incentivizing the private sector via a regulatory climate that "promotes
sector investment and innovation by providing certainty and eliminating all
unnecessary regulatory burdens."
NCTA has argued that going the Title II route would do the
Assey calls the bill a "sound first step" in modernizing
the fund, saying that it "recognizes that government subsidies are neither
necessary nor appropriate in competitive areas where the marketplace is
working," though NCTA would prefer the bill make that point a bit more
definitively by making broadband support "expressly limited to unserved
areas." As with the billions in broadband stimulus funding being handed
out, NCTA is concerned that government money will be used to underwrite
competition to existing cable broadband service rather than to those who have
no service at all.
The bill does include reducing or eliminating the high-cost fund
support in areas where more than 75% of households can get service from a
non-incumbent provider, but Assey says the bill should clarify that includes places
where at least two competitors can combine to reach that 75%, meaning that
there will still be choice among two providers, just not necessarily the same
The FCC has made migrating the fund from phone to broadband a
priority in its National Broadband Plan, in the process addressing complaints
about waste fraud and the growth of the fund.
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