NTCA: Cuts to Universal Service and Intercarrier Compensation Threaten Rural Consumers and Violate Statutory Obligations

For Immediate Release

Contact: Laura Withers, 703-351-2086, lwithers@ntca.org
             Wendy Mann, 703-351-2087, wmann@ntca.org

Arlington, Va. (October 25, 2012) – Certain cuts, caps and constraints adopted by the FCC last fall threaten the viability of rural communications services and violate statutory requirements governing Universal Service Fund (USF) and intercarrier compensation (ICC) cost recovery mechanisms, NTCA and other challengers of the commission’s USF/ICC reform order said this week in court filings.

In their first substantive briefs in a joint challenge of the 2011 order with the 10th Circuit Court of Appeals, NTCA and other petitioners argued that the FCC ignored its statutory obligations to ensure that services in high-cost areas are reasonably comparable to those available in more densely populated areas and also that sufficient and predictable support is available to achieve that objective. NTCA and other petitioners further asserted that the new rules unlawfully deprive carriers of a reasonable opportunity to recover the costs of rural network investments, including retroactive limits on recovery of investments made years prior to the recent rule changes.

In a separate brief addressing ICC reforms, NTCA and the other petitioners stated, among other things, that the commission violated requirements of the Telecommunications Act of 1996 by setting transitional prices and mandating an ultimate price of zero for ICC rates.

“The FCC’s capping and reduction of support levels is inconsistent with the underlying statutory principles of universal service, and its effort to dictate and ultimately eliminate intercarrier compensation rates exceeds the limits of its statutory authority,” said Michael Romano, NTCA senior vice president of policy. “This appeal seeks to correct the most glaring legal shortcomings of the FCC’s order, and we hope that these appellate efforts will work in parallel with our other advocacy efforts to result in a reform plan that truly solves the challenges of rural broadband consistent with the fundamental mandates of universal service.”

NTCA filed a petition for review of the transformation order with the U.S. Court of Appeals for the 4th Circuit on December 9, 2011. That petition and others filed by a variety of interested parties were consolidated in the 10th Circuit.


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.