NTCA's Brunner Urges Rejection of $0.0007 Access Proposal

Says industry giants' proposal endangers cost recovery and threatens consumer service


October 1, 2008, Arlington, Va. - National Telecommunications Cooperative Association (NTCA) Chief Executive Officer Michael E. Brunner called on Congress to urge the FCC to reject a "shortsighted and unwise" proposal to establish a unified $0.0007 terminating access rate for all price cap and rate of return (RoR) telecom carriers that would wrongly relieve large telecom carriers of more than $8 billion in annual access and intercarrier compensation responsibilities-and jeopardize more than $2 billion in annual cost recovery for rural carriers.

In a letter to members of Congress, Brunner said "the proposal would place billions of dollars of unrelated terminating and originating switching and intercarrier cost recovery at risk, while leaving the door open for [Verizon, AT&T and others] to continue charging whatever they wish for terminating support on their infrastructure."

Brunner noted that the proposal would also place the portfolios of the rural telecom financing sector at risk, including private financiers CoBank and the Rural Telephone Finance Cooperative, which hold nearly $7 billion in outstanding loan commitments. The letter also noted that "the plan would place substantial new pressures on the federal universal service system, which has already been strained by unbridled program growth resulting from regulatory lapses."

In the letter, Brunner also pointed to several legal flaws in the proposal, including its unlawful preemption of state jurisdiction to set intrastate rates and its breach of the state and federal separations requirement.

"Full cost recovery is the lifeblood that sustains telecommunications carriers of every size and nature, but it is particularlyContact Caitlin Colligan at 703-351-2086 critical for small, rural carriers that have few economies of scale combined with comprehensive provider of last resort responsibilities," Brunner said in the letter. "The Verizon/AT&T plan will undermine that entire structure."

View a copy of Brunner's letter

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The National Telecommunications Cooperative Association is the premier association representing more than 580 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.