USF tug of war

WIRELINE VS. WIRELESS

In the telecom industry at large, there is a broad-scale migration from wireline to wireless under way. Recognizing that, does the Joint Board proposal for a Provider of Last Resort fund artificially perpetuate wireline service?

Paul Garnett, assistant vice president of regulatory affairs for the Cellular Telephone Industry Association, thinks it could. “We have concerns about any system that doesn't recognize what's happening in the market,” he said. Noting that more and more consumers view their cell phone as their primary phone, he argued that regulators should not presume that a POLR has to be a wireline provider.

But the incumbent wireline telcos that receive most of the high-cost USF money today say wireless carriers couldn't survive without a wireline network to support them. “Calls don't hop from tower to tower,” said Curt Stamp, executive director of the Independent Telephone & Telecommunications Alliance.

Incumbents also argue that only a wireline provider can guarantee sufficient reliability to truly be considered a POLR, which raises another question: Will the broadband or mobility funds carry any requirements to serve all customers within a territory? It's another area where policy-makers must make critical decisions ahead of time.