New NTCA report answers two of Blair Levin's three Universal Service questions

In response to rural telco complaints that the 4 Mb/s minimum broadband speed recommended in the National Broadband Plan is set too low, NBP crafter Blair Levin has challenged the telcos to answer three questions. What should the speed be? What will it cost? And who is going to pay for it?

The National Telecommunications Cooperative Association (NTCA) seems to have answered at least two of those questions in a report that it recently issued.

Fifteen percent of all NTCA member respondents estimated that they could bring all of their customers up to 25 Mb/s service for $1 million or less. An additional 30% could do so for between $1 and $10 million. Twenty six percent more said they could do so for between $10 and $20 million, and another 11% said their cost would be between $20 and $50 million. The final 19% estimated that the total cost would exceed $50 million.

The report didn’t discuss how those costs should be covered. That wasn’t the goal of the report. Based on comments provided by respondents, however, it seems clear that the small telcos are hoping a broadband Universal Service program would operate in a similar fashion to how today’s voice-centric program works. Respondents were asked what obstacles they had encountered in their efforts to deploy fiber to their customers and how conditions would need to change to allow them to successfully overcome those obstacles. A typical response was “As long as we have some sort of USF regime and USDA funding we would continue to deploy.”

Time to bargain?

Some small telco groups opposing the 4 Mb/s target set in the National Broadband Plan, including the NTCA, have advocated a 100 Mb/s target instead, so it was interesting to note the 25 Mb/s target that the NTCA set in its research. Maybe I’ve been watching too much American Pickers, but I’m wondering if the NTCA might be signaling that it might be willing to revise its 100 Mb/s target in the hopes that the FCC might respond by raising its 4 Mb/s target.

But AT&T Senior Vice President of Federal Regulatory Bob Quinn doesn’t anticipate the FCC doing that any time soon. He told reporters on a conference call today that he expects the commission to reference the 4 Mb/s target in the notice of proposed rulemaking about Universal Service that is on the agenda for the next monthly FCC meeting, scheduled for February 8.

On a more positive note for small telcos, though, Quinn said he doesn’t think the FCC will recommend anything definitive about eliminating rate of return regulation. Instead he expects the commission to simply seek comment on that topic.