NTCA: Mixed Reaction to FCC USF Contribution Order

Group pleased with expansion of base of contributors, disappointed broadband providers excluded

June 21, 2006, Arlington, Va. - The National Telecommunications Cooperative Association (NTCA) said today it is pleased with the Federal Communications Commission’s (FCC) interim order that expands the base of the universal service fund (USF) contributors by requiring providers of Voice over Internet Protocol (VoIP) services to contribute to the existing revenue-based USF contribution mechanisms. NTCA says the VoIP USF contribution requirement will help support the underlying networks that carry all communications services - including VoIP traffic.

NTCA was also pleased with the FCC’s move to raise the amount wireless carriers contribute to the USF. This, combined with the expansion of the pool of contributors, will help the revenue base for the federal USF mechanisms and create a more level playing field in the rapidly evolving and increasingly competitive communications services market.

NTCA expressed disappointment, however, with FCC’s decision not take this opportunity to expand the pool of USF contributors to include all cable, wireless, wireline, electric, and satellite broadband Internet access providers.

The future public communications network will require universal service funding to provide affordable and comparable voice and broadband services to all Americans—urban and rural, high-cost and low-income. It will also require a USF contribution methodology that is able to evolve with the future public communications network that will rely on IP-based transmission services. All providers of broadband transmission should therefore be required to contribute on an equitable and non-discriminatory basis.

"Eliminating wireline, wireless, cable, electric, and satellite broadband Contact Caitlin Colligan at 703-351-2086transmission/broadband Internet access service revenues from the USF contribution base will likely undermine the President’s goal of providing affordable broadband services to all Americans by 2007, and conflict with proposed Telecom Rewrite legislation on Capitol Hill which ties the future of universal service to broadband deployment throughout the United States." said NTCA Vice President, Legal & Industry Affairs, Dan Mitchell.

The National Telecommunications Cooperative Association is the premier association representing more than 560 locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America. NTCA provides its members with legislative, regulatory and industry representation; meetings; publications and educational programs; and an array of employee benefit programs. Visit us at www.ntca.org.