Successes Mount in Quest for ETC

It may be premature to say that wireless and wireline telcos are on a level playing field as far as Universal Service funding eligibility is concerned, but the Competitive Universal Service Coalition is having some success at smoothing out the bumps.

Two recent examples: the FCC's designation of Verizon Wireless as an eligible telecommunications carrier (ETC) in Delaware and Western Wireless as an ETC in Wyoming.

In the coalition's first year of existence, the focus has been on ETC designation, according to Michelle Farquhar of Hogan & Hartson, coalition counsel.

This means making sure the process runs smoothly and remains competitively neutral so that wireless carriers are equally eligible with wireline carriers to become ETCs and are eligible for Universal Service money if they meet the criteria, she said.

"There was an FCC rule with respect to when you could receive funding, and it was applied in such a way that when a new carrier entered the market, they had to wait as long as a year and a half before they could receive funding," Farquhar said. "ILECs receive funds on a quarterly rolling basis, so we brought that to the attention of the FCC, and they fixed it."

The coalition also wants to make sure all Universal Service funding is explicit, rather than implicit - buried in cross subsidies and hidden in rate structures.

The FCC has made an effort to fix this in the non-rural telco areas; the next step is to focus on the rural telco areas, which is where most of the support goes.

Another issue is that funding should be portable among the carriers.

"A competitive entrant that has been designated as an ETC should receive the same level of support for serving a customer as the ILECs would receive for serving that customer," Farquhar said.

The coalition also is concerned that Universal Service funding be targeted, fiscally prudent, in terms of the overall cost to taxpayers, and based on efficient technology.

"All of our members will be contributors to the system more than beneficiaries or recipients of funding," Farquhar said, so it's important that the money their subscribers are putting into the system is used in a competitive and efficient manner.

Carriers apply for ETC status with the state in question. In some cases, states defer to the FCC for action. Back at the February 2000 CTIA Market Operations Forum, Gene DeJordy, Western Wireless vice president, said that his company's application for ETC status in Wyoming and another for the Crow Indian reservation in Montana had been pending with the FCC for six months.

Farquhar, who also acts as counsel to Western Wireless in its ETC efforts, said a proposal is pending at the FCC that stipulates that all states and the FCC should designate carriers within six months of filing a petition if all the criteria are met. Western Wireless has received ETC status in a number of states, she said. The Crow reservation application still is pending, and the carrier is about to file for the Pine Ridge reservation in South Dakota.

Verizon Wireless is "delighted with the judgment in Delaware," said spokesperson Andrea Linskey, adding that the carrier looks forward to being able to provide better services in rural markets. Verizon also has applied to be an ETC in Wyoming.

Along with Verizon Wireless and Western Wireless, the Competitive Universal Service Coalition consists of wireless carriers AT&T Wireless, Dobson, Nucentrix (an MMDS carrier), Smith Bagley, U.S. Cellular and VoiceStream.