New OPASTCO chairman: Broadband universal service must fund served as well as unserved areas

Ron Laudner, CEO of Iowa-based OmniTel Communications, was recently elected chairman of the Organization for the Promotion and Advancement of Small Telecommunications Companies, assuming that role at a critical time for small U.S. telcos. With the Federal Communications Commission set to put the process of reforming the Universal Service program in motion next week, I talked to Laudner this week about that and other key issues for OPASTCO members.

Universal service reform

Connected Planet: How do you think the FCC is thinking about Universal Service reform that may influence what we see from the commission next week?

Ron Laudner: What’s going to come out next week will change the focus from the National Broadband Plan to the rules and regulations that cover broadband and how the FCC will deal with that. [The focus will be on] the transition to a broadband industry and there will be some rules and guidelines we will have to follow to get there and there will be [a request for] comments [about that.]

The FCC will say, “This is what we want. Tell us how we should get there.”

Rate of return and reverse auctions

Connected Planet: One step the FCC was planning to take that OPASTCO was concerned about was to eliminate rate of return regulation, but now I’m hearing that may not be part of next week’s recommendations. What do you think the FCC’s attitude is toward that now?

Laudner: The FCC may think if it gets rid of rate of return, it can monetize it and relax [the demands on] the fund a bit. But you have to remember what Universal Service was meant to do—to create equal access. To take away ROR from a small rural carrier, customer rates could be $400 or so. I think the FCC may have relaxed its feeling toward [eliminating ROR].

Connected Planet: How do you think the FCC is feeling about the idea of using reverse auctions to award Universal Service funding?

Laudner: I think the FCC [is considering] multiple [possible] conclusions and everything is on the table. They will come up with a plan that has multiple endings and how to get there and one of them will be reverse auctions. They will ask how we feel about that.

Target speeds

Connected Planet: Do you think the FCC is still in favor of a 4 Mb/s target download speed for the broadband Universal Service program?

Laudner: I think their goal is four [Mb/s downstream] and one [Mb/s upstream]. But [small telcos] may have built out past four-and-one. [The question is] what that means to network cost recovery. Just because we built the network out doesn’t mean it’s paid for. It will continue to be used to provide broadband. The [focus] shouldn’t be so much on speed but about what the [funding levels] are.

The important piece about four-and-one is that it allows for wireless and mobility. I think that’s why it’s there and it won’t change at all. It would be great if it was 100 [Mb/s, but] the discussion we want to have is not about speed. It’s about how to [fund both] served and unserved areas.

Access charge reform

Connected Planet: How do you think the FCC is thinking about access charge reform?

Laudner: What they need to do is transition inter-carrier compensation and monetize that and transition that to [the Universal Service] fund as well. It won’t be called access or inter-carrier compensation but will be called support for broadband. It will have nothing to do with minutes or calls.

Is it based on numbers? Can an IP address be considered a number and can a broadband line be considered a line? I think that’s the discussion that’s going to happen. I think there’s [an] idea out there that it might not be [based on] a telephone line but on a broadband line.

Voice will be an application and you will have more broadband lines than you currently have today in access lines because of cutting the cord and going to wireless.

A vision for OPASTCO

Connected Planet: What are your biggest goals for your term as OPASTCO chairman?

Laudner: As the rural industry transforms into the new broadband world, I want to transform OPASTCO into a premiere broadband association. I want to make sure rural areas don’t get left behind in the transition to a digital economy.

If you support what’s in the best interest of rural customers, you support what’s in the best interests of the rural industry, and when you support what’s in the best interests of the rural industry, you support what’s best for America.