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NCTA: Time ToReform Wasteful USF

The National
Cable & Telecommunications Association gave a shout-out to the FCC's plan
to vote on a Universal Service Reform regime at its Feb. 8 meeting, saying it
was high time it reformed a system riddled with waste and inefficiency.

Cable operators
are principally concerned about billions in subsidies they argue are currently
going to underwrite existing competition.

In a blog
James Assey said FCC Chairman Julius Genachowski's speech Monday
outlining some of that plan was "a welcome sign that the FCC is serious
about reform."

The fund
subsidizes primarily phone service to areas where the cost is too high to make
it cost-effective to private industry, but the FCC is migrating that support
from traditional phone to the new communications lifeline, broadband.

NCTA was
particularly happy with Genachowski's pledge of greater fiscal
responsibility, and the suggestion that future support would go to a single
provider and only in markets where a marketplace solution has not materialized.

Assey also
applauded the chairman's pledge of greater accountability. "As the
Chairman noted, any broadband support program must start with a clear goal -
bringing service to unserved areas - and must include increased
disclosures about the operating performance and financial condition of
recipients that are designed to achieve the goal of providing broadband
access," said Assey.

Genachowski outlined
the FCC's planned Universal Service Reforms in a speech at the Information Technology
and Innovation Foundation in Washington Monday.

infrastructure deployment is not where it needs to be, said the chairman, a
race the country can't afford to fall behind in. "Moving forward slowly in
these areas is moving backward in our global economy," he said.

The FCC made
USF reform part of the national broadband plan. The chairman said Monday that
would come in two stages. The first will be making changes to intercarrier
compensation rules (for payments between companies for interconnection) and
gradually reducing those payments while moving funds to support broadband
connection in "unserved" areas.

He said the
Notice of Proposed Rulemaking the FCC will vote on will including cost-controls
and limits to annual expenditures, reporting requirements and performance

The second
stage would be to consolidate existing support mechanisms into the new Connect
America broadband support fund.

The chairman
signaled the FCC is not ready to tackle the issue of who contributes to the
fund and how much.

The chairman
invoked a Republican, rather than Democrat, when talking about Capitol Hill
support for reforming the USF fund. He pointed out in his speech that Lee Terry
(R-Neb.), who is chairman of the House Energy & Commerce Oversight
Subcommittee, and has been a critic of the FCC in other areas, has said that
the USF system is broken.