Rural Associations to File Joint Letter with Other Industry Stakeholders on Consensus for Universal Service and Intercarrier Compensation Reform

After much deliberation, discussion and analysis, the leadership of NTCA, OPASTCO and WTA (the Rural Associations) have given approval for their respective associations to file a joint letter with a group of other industry stakeholders indicating that the universal service fund (USF) and intercarrier compensation (ICC) reform plan filed by the Rural Associations in April 2011, together with proposals being filed today by these other stakeholders, would provide a sound foundation for USF and ICC reform throughout rural America.

Since the release of the National Broadband Plan, the Rural Associations have worked together with a number of other stakeholders in the rural telecommunications industry to develop and file an alternative USF and ICC reform plan that would promote the availability of sustainable, affordable broadband in the areas served by small rural carriers. We recognize the deep commitment that our members have made to serve their consumers in these areas, and the importance of reliable cost recovery mechanisms that both enable recovery of costs from existing investment and promote new investment in broadband-capable networks.

In recent months, the Rural Associations have also devoted substantial time and effort to seeking potential compromise and consensus with a group of carriers who have worked through the USTelecom Association (USTelecom) to develop a separate plan for USF and ICC reform applicable to areas served by price cap-regulated carriers. Through these further efforts, the Rural Associations have now agreed with the USTelecom members and other parties upon a framework and a complementary set of reform plans to advance the cause of sustainable universal service throughout rural America. From the perspective of our members, the highlights of this consensus framework include:

  • Maintain rate-of-return cost recovery;
  • Start from current funding levels received by rate-of-return regulated carriers;
  • Enable reasonable, measured growth in funding over time that is not subject to a cap;
  • Restructure terminating local switching ICC rates over an 8-year transition period;
  • Enable continued charging of ICC rates for terminating transport and tandem switching functions at current interstate levels;
  • Ensure sufficient funding for access restructuring for carriers of last resort;
  • Include VoIP within the ICC framework; and,
  • Adopt strict phantom traffic rules that would require identification of the true calling and called parties.

It should be noted that the Rural Associations are not signing onto any plan being filed by the USTelecom members. Instead, we are simply filing a joint letter with these other industry stakeholders explaining how their plan and the Rural Associations' plan can work in tandem to create an effective framework for reasonable USF and ICC reform. We will continue to press for adoption of our reform initiatives by the FCC, and we believe that this consensus framework represents the best available option for promoting sufficient and predictable cost recovery and sustainable, affordable broadband in the areas served by our members.

We have heard from many members in recent days sharing perspectives, providing guidance, voicing both support and concerns and offering insights. We appreciate your willingness to have a constructive dialogue. Staff for the Rural Associations provided the input of members to association leadership, and the leadership also reached out to members across the country in seeking guidance on how to proceed. The decision of each association's leadership reflects a careful assessment and analysis of facts at hand and the current economic and political climates, combined with the input from our committees and individual members. We appreciate your continued support as we now navigate the next steps in the reform process.

To be clear, this is just another step - but a very important step - in a process with much work still ahead. We look forward to continuing to work with you to ensure that USF and ICC reform achieves the core purposes of universal service, enables reasonable cost recovery by our members, and positions our members for long-term success in serving customers in rural America.

Shirley Bloomfield
Chief Executive Officer
National Telecommunications Cooperative Association
Contact NTCA at 703-351-2037
John Rose
Organization for the Advancement and Promotion of Small Telecommunications Companies

Kelly Worthington
Executive Vice President
Western Telecommunications Alliance