July 12, 2010 - Rural Associations File Comments on FCC's Broadband USF Reform Proceeding

Rural consumers’ existing broadband networks and Administration’s goal of delivering affordable, robust broadband to Rural America at risk

Recommended actions include not imposing a cap, freeze or move to incentive regulation, immediately reforming and expanding USF contribution system, focusing on actual costs for support, and moving quickly to address intercarrier compensation issues

The National Exchange Carrier Association (NECA), the National Telecommunications Cooperative Association (NTCA), the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), the Western Telecommunications Alliance (WTA) and the Rural Alliance, along with 38 concurring state associations and other groups,  today filed joint comments in the FCC’s Notice of Proposed Rulemaking (NPRM) and Notice of Inquiry (NOI), which seek comment on proposals regarding Broadband Universal Service Fund (USF) reform.  

The joint comments reflect a unified rural voice which collectively represents the nation’s 1,100 rate of return carriers (RLECs), all of whom are committed to delivering world-class broadband to the 37 percent of the national geography where their customers live and work. RLECs seek to ensure rural America’s broadband infrastructure continues to provide state of the art services comparable to more urban areas of the nation.  National policies must recognize the importance of sustaining the same level of broadband services for all citizens of our country, regardless of where they live.

The Associations agree existing high-cost USF mechanisms must be reformed in a comprehensive fashion to directly support broadband networks and services.  The comments reflect significant concern, however, about the National Broadband Plan’s (NBP’s) overall approach to broadband USF reform, and recommend against adopting the specific recommendations in the NOI and NPRM, as these are likely to thwart the NBP’s goal of delivering affordable, robust broadband services in RLEC serving areas.

Specifically, the Associations recommend the Commission should:

  • Not impose an overall cap or freeze on the existing High Cost program for incumbent carriers, or new caps or freezes on RLEC-specific mechanisms such as interstate common line support.

  • Not require RLECs to shift to incentive regulation, as it has been demonstrably ineffective in encouraging carriers to provide an evolving level of service to consumers in high-cost areas.  In contrast, rate-of-return regulation has a proven track record of success in this regard, and remains fully viable in today’s competitive broadband environment.

  • Focus on developing simple, reliable and workable methods based on actual costs for supporting broadband in RLEC territories and not pursue efforts to develop complex models or “market based” mechanisms such as reverse or procurement auctions.

  • Immediately reform the USF contribution system and, most importantly, expand the contribution base to include, at a minimum, all broadband Internet access providers.

  • Move quickly to address certain discrete intercarrier compensation reform issues such as strengthening the call signaling rules to mitigate phantom traffic as well as confirming that interconnected VoIP providers are required to pay access charges.
Contact Caitlin Colligan at 703-351-2086

The Associations and their respective RLEC members support the universal broadband service goals of the NBP.  In particular, the joint comments express appreciation for the Commission staffs’ willingness to meet with Association staff members and individual RLEC representatives.  The Associations believe such meetings offer the best hope for arriving at workable solutions to reforming universal service mechanisms to meet the NBP’s goals.

The Associations express their willingness and enthusiasm for continuing to work with the Commission to find equitable solutions for delivering world-leading broadband services to all citizens at affordable prices, everywhere in the U.S.

View the joint comments.


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.