Universal Service Funds: Competition Everywhere?

Should wireless-service providers get a piece of the Universal-Service pie? Western Wireless thinks so. It's the most active wireless provider pursuing eligible-telecom-carrier (ETC) status in order to qualify for these funds, and Gene DeJordy, Western Wireless vice president, believes that others should join the effort. After all, every state with a Universal-Service fund collects from wireless providers.

"It will take a concerted effort," DeJordy told service providers at CTIA's Market Operations Forum, which preceded Wireless 2000. So far, Western Wireless has received ETC status in Minnesota for both rural and non-rural areas. In North Dakota and Kansas, its ETC status applies only to non-rural areas. DeJordy said that states are reluctant to add ETCs in rural areas where Universal Service is the bread and butter of the existing rural telephone operators.

But he pointed out that in areas such as Regent, ND, where Western Wireless offers service at $15 per month, the same as the LEC, it doesn't recover its costs. Unlike the LEC, it doesn't get the Universal-Service support.

Western Wireless currently has ETC applications pending with several states and with the FCC for Wyoming and the Crow Indian Reservation. Most states confer ETC status, but Wyoming has deferred to the FCC. Although it should be a simple matter for the FCC, DeJordy said that Western Wireless already has waited six months for the FCC to act.

To qualify as an ETC, a provider must support voice-grade access to the public-switched telephone network; touch-tone and single-party service; access to emergency services, operator service, directory assistance and long-distance service; and offer the Lifeline and Link Up programs. DeJordy suggested that service providers file for ETC status as wireless-service providers and not as CLECs.

DeJordy and attorney Russell D. Lukas, of Lukas, Nace, Gutierrez & Sachs, also discussed regulations governing interconnection between wireless providers and LECs. The bottom line is that all LECs must interconnect, and wireless-service providers are entitled to unbundled access. The two provided conference attendees with explicit procedures to follow in order to effect the interconnections, stressing that wireless providers should forget the old way of doing things.

"You are a co-carrier with rights," DeJordy said. He pointed out that transport and termination rates for local traffic can be negotiated; they're not just what the LEC says they are. Pre-1996 rates of 2 cents to 4 cents a minute probably should now be less than 1 cents a minute, said DeJordy, adding that both providers have a right to be compensated for terminating non-local traffic. Wireless providers have a right to non-discriminatory access to numbers, and they might want to obtain them from the North American Numbering Plan rather than from the LEC, which might change for numbers.

There will be frustration because the LEC is likely to have 100 years of history with the state regulators, who might not understand wireless' unique issues.

"The substance of the law regarding interconnection is in favor of the wireless carrier, but the process is in favor of the LEC," Lukas said.