July 28, 2009 - NTCA Urges FCC to Reject AT&T Numbers-Based USF Contribution Methodology

Petition sets stage for future regulatory arbitrage that would threaten future USF support for broadband

Arlington, Va., July 28, 2009 - To prevent AT&T from reducing or eliminating its USF contribution obligations prospectively through future regulatory arbitrage, the FCC should reject the company's petition to immediately implement a telephone numbers-based USF contribution methodology, the National Telecommunications Cooperative Association (NTCA) said in an ex parte notice.
In the ex parte, NTCA asserted that AT&T is creating a "false emergency" in an effort to spur premature FCC action.  It notes that the 12.9 percent USF contribution factor that prompted AT&T's call for reform will result in an increase of less than $3.00 per month for a residential customer who purchases both landline and wireless telephone service-hardly cause for such heightened concern.

The association also noted that a numbers-based contribution methodology does not make sense in a broadband world because telephone numbers have nothing to do with broadband Internet access, which will be the basis for all communications services (voice, video, data and security) in the future. 
"The AT&T proposal is backwards looking, technology-biased and will dramatically shift the burden of paying for universal service onto incumbent local exchange carriers and wireless carriers and their subscribers while relieving interexchange, broadband and other types of providers of the obligation of paying for universal service," NTCA said.
Additionally, a numbers-based methodology will lead to future USF contribution avoidance when AT&T and others move their voice customers away from North American Numbering Plan telephone numbers to IP-based Internet protocols and soft numbers.  NTCA noted that "there is every reason to believe that providers will offer broadband services and applications to their customers without telephone numbers to avoid universal service payments."
NTCA said the commission should not abandon a proven, sustainable, technologically neutral contribution methodology because telephone numbers would allegedly be easier for parties to manage and easier to audit, as AT&T claims.
Contact Caitlin Colligan at 703-351-2086  
"The commission's obligation is to ensure sustainable, sufficient and predictable USF support mechanisms that help achieve the goal of comparable service at affordable prices, not to make contributions simpler for AT&T so that it may attempt to avoid these contributions in the future through regulatory arbitrage," NTCA said.
View the ex parte

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.