NTCA Members Discuss Cost Recovery Issues

October 23, 2003, Arlington, Va. – Thirteen representatives from NTCA’s telecommunications carrier member companies converged on Washington, D.C., to build the awareness of key members of Congress and officials with the Federal Communications Commission about issues that are central to the future viability of small, rural carriers.

Specifically, NTCA members discussed the importance of ensuring their ability to fully recover costs. The group explained that full cost recovery would involve securing stability among the three basic elements of cost recovery – 1) universal service, 2) intercarrier compensation and 3) local rates.

1) Universal Service:

  • To ensure the future viability of the Universal Service Fund, NTCA members stressed the importance of expanding the contribution base beyond the carriers that currently are assessed for this purpose.
  • They also stressed that Congress should vacate the decision by the 5th U.S. Circuit Court of Appeals that prevents the FCC from assessing such carriers’ intrastate revenues.   
  • Members also called upon these officials to strengthen the public interest standards for competitive eligible telecommunications carrier (ETC) designation by implementing NTCA’s seven-point public interest test (see below).

2) Intercarrier Compensation: 

  • Members stressed that potential intercarrier compensation recovery solutions/options must include the status quo.
  • Officials were warned of the dangers of shifting intercarrier compensation costs to the Universal Service Fund before fixing the problems that already exist with the fund.

3) Local Rates:

  • Members maintained that it is paramount that rates and other mandated direct charges remain comparable between urban and rural areas.

NTCA’s Seven-Point Public Interest Test for ETC status consists of the following questions:

  1. Will designation ensure ubiquitous, comparable rates and services?
  2. Will designees actually serve the entire ILEC market area?
  3. Will benefits of granting designation outweigh burdens on funds?
  4. Will designees demonstrate their costs and uses for actual costs?
  5. Will designation cause excessive market support?
  6. Will designees agree to quality-of-service or other standards?
  7. Will funds in reality be inciting unnecessary artificial competition? 


NTCA is the premier association representing more than 550 locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America. NTCA provides its members with legislative,Contact Caitlin Colligan at 703-351-2086 regulatory, and industry representation; meetings, publications, and educational programs; and an array of employee benefit programs.