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Rural telcos seek bigger role for Universal Service in National Broadband Plan

NTCA says Google and other Internet companies should pay into the USF to fund their fair share of broadband delivery costs

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Many familiar themes and a few new ones can be found among the comments filed by associations representing rural telcos with the FCC this week in response to the Commission’s April notice of inquiry about a National Broadband Plan. Among the familiar themes—the idea that universal service funding should cover broadband, including the cost of providing “middle mile” connectivity to the nearest Internet point of presence.

To raise the additional funding required, the National Telecommunications Cooperative Association and the Organization for the Promotion and Advancement of Small Telecommunications Companies both advocate requiring Internet service providers to pay into the USF Fund. But the NTCA went a step further in its comments, recommending that Internet content providers such as Google also should pay into the fund.

“Search engines run bots that run through the Internet to take pictures of every Web page,” explained Dan Mitchell, vice president of legal and industry affairs for the NTCA, who argued that those content providers do not pay their fair share of network costs. Referring to companies such as Google, Mitchell said, “What they’re not paying, we’re having to pay through our own purchase of middle mile capacity and passing it through to ratepayers.”

The NTCA also argued in its filing that broadband stimulus funds should be directed toward what it calls “market failure” areas—or areas that do not have the population or economic base for a provider to justify broadband facilities build-out and ongoing maintenance without external monetary assistance. The purpose of the stimulus package, said Mitchell, “should be to bring service to areas where [carriers] can’t afford to build it, not to artificially stimulate competition in urban or rural [areas.]”

OPASTCO in its filing also questioned whether increased competition is an appropriate goal for government broadband efforts, arguing that the FCC should establish what it called a “rebuttable presumption” that it is “not in the public interest to support multiple wireline broadband providers in rural service areas.” The organization argued that, “In areas where the incumbent is already providing exemplary service, supporting additional wireline providers would threaten the quality and affordability of broadband and unnecessarily increase the size of the USF.” The USF should support a single wireline and a single wireless carrier per geographic area, OPASTCO argued.

The group also took aim at municipal broadband providers. “Municipalities often have tax advantages not shared by private broadband providers; in fact, municipalities often function as tax collectors,” the filing states. “Municipalities also grant, and charge for, rights-of-way to broadband providers, which presents another potential conflict of interest.”

The NTCA and OPASTCO are among the more than 500 telco organizations, telcos, consumer groups, and others that have filed comments to date about a National Broadband Plan. The deadline for initial comments was June 8 but interested parties have until July 7 to make reply comments. The FCC is charged with weighing the interests of various parties in devising a National Broadband Plan by February 2010.

With so many disparate interests pitted against one another, the commission could be tempted to generate a vague document that leaves many gray areas. But one industry stakeholder does not expect that to occur.

“They will make a list of recommendations and they may say to Congress: ‘We need legislation to accomplish what we want to accomplish,’” argued Rick Joyce, chair of the communications group at law firm Venable. It could take an act of Congress to require Internet service providers to pay into the Universal Service fund, Joyce said—unless the FCC reverses a previous ruling that ISPs are not communications service providers subject to Title II regulations.

“One way of making everyone happy would be to put them into Title II but eliminate some of the unneeded Title II requirements such as price regulation,” said Joyce.

The National Broadband Plan also could be where the FCC provides a definition of broadband, Joyce said.

The NTCA in its filing offered a detailed definition that could be a rallying point for rural telcos. The definition, it said, should be “based on high-speed Internet access capabilities during peak-hour or busy-hour load that are generally available in a significant sample of service offerings in urban areas to establish a standard of comparability and affordability in urban and rural areas.”

By definition, the exact speed would vary as time goes by. “By linking the definition to generally available services, affordability and comparability, the definition is enduring, technology neutral and in the public interest,” the filing states.

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© 2014 Penton Media Inc.

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