Bloomfield Testifies About Effects of USF/ICC Reforms

 

For Immediate Release

Contact: Laura Withers, 703-351-2086, lwithers@ntca.org

NTCA CEO tells Senate subcommittee reforms chilling investment in rural broadband

WASHINGTON (July 25, 2013) – Shirley Bloomfield, chief executive officer of NTCA–The Rural Broadband Association (NTCA), testified on behalf of small, independent telecommunications companies before the Senate Committee on Commerce, Science and Transportation’s Subcommittee on Communications, Technology and the Internet today during the hearing, “State of Wireline Communications.”

Bloomfield testified that the country’s Universal Service Fund (USF) program has played an important role in ensuring that all American citizens and businesses, regardless of who they are or where they live, have a reasonable opportunity to participate in our increasingly interconnected and online society. While the program needed to be modernized to adapt to a more broadband-oriented world, the 2011 reforms of the USF and intercarrier compensation mechanisms for small, rural carriers have unfortunately caused significant regulatory uncertainty and chilled investment in broadband infrastructure.

Citing a recent survey of NTCA members, Bloomfield stated a large portion of rural carriers have delayed or cancelled broadband deployment projects as a result of the reforms. “Out of 185 small carrier respondents, 127 indicated they have either postponed or cancelled plans to upgrade their network infrastructure due to lingering regulatory uncertainty,” Bloomfield stated. “One-hundred and one of these respondents indicated that the combined value of the projects put on hold equaled more than $492 million.”

Bloomfield noted that there is still a great need for more transparency, accuracy and predictability in the USF system, post-reform. For example, the commission’s new “Quantile Regression Analysis” model to cap USF support for small carriers has created rampant uncertainty in the rural telecom marketplace, Bloomfield stated. Paired with the prospect of additional cuts, caps, and constraints currently being considered in a further rulemaking, this regulatory uncertainty is threatening to make 2013 a “lost year” for rural broadband investment.

Bloomfield also tackled issues related to the ongoing IP transition, stating rural operators have been at the forefront of this evolution for years and are eager to continue delivering advanced technologies to their rural customers. Consistent with a petition NTCA filed with the commission late last year, Bloomfield urged policymakers not to dismantle the current regulatory framework simply because underlying network technologies shift, while at the same time cautioning policymakers against leaving existing rules in place merely because they once made sense in an era when consumer preferences, technologies, and competition were different. Furthermore, Bloomfield stated the core regulatory principles of consumer protection, competition and universal service must be carried forward in an IP-oriented marketplace. Bloomfield encouraged a surgical review of specific rules against the backdrop of these principles to determine whether those rules should be retained, modified, or eliminated as part of this evolution.

Finally, Bloomfield urged members of Congress to demand additional action from the FCC to address the rural call completion problem, stating “we are begging the FCC to do more” to hold accountable those responsible for unlawful conduct.

Bloomfield’s full testimony is available here. An archived webcast of the hearing is available on the committee's website.

###

NTCA–The Rural Broadband Association is the premier association representing nearly 900 independent, community-based telecommunications companies that are leading innovation in rural and small-town America. NTCA advocates on behalf of its members in the legislative and regulatory arenas, and it provides training and development; publications and industry events; and an array of employee benefit programs. In an era of exploding technology, deregulation and marketplace competition, NTCA’s members are leading the IP evolution for rural consumers, delivering technologies that make rural communities vibrant places in which to live and do business. Because of their efforts, rural America is fertile ground for innovation in economic development and commerce, education, health care, government services, security and smart energy use. Visit us at www.ntca.org.