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Group says USF funds should cover primary lines

WASHINGTON-Wireless carriers and alternative telecom carriers decried a recommendation to restrict universal service subsidies to one line per household.

The Federal-State Joint Board on Universal Service, created to find a way to fix the Universal Service Fund before it runs out of money, said one way to reform the system would be to restrict subsidies to primary lines only. Thus a rural household with a primary wired corded phone, wireless service and Internet access would only receive one subsidy, even though three access points are in the house.

“The most important aspect of our recommendation is the decision to limit support to primary lines. Not only will this action slow the growth of the high-cost fund stemming from the support of multiple lines of multiple networks within the same area, but it will also fundamentally change the calculus for designating additional eligible telecommunications carriers in areas served by rural carriers,” said Billy Jack Gregg, director of the consumer advocate division of the West Virginia Public Service Commission. By restricting support to only primary lines, we “return to the original concept of universal service in a competitive environment; namely, that carriers will compete for the universal-service subsidy, and that competition will eventually drive down the overall cost of subsidizing service in high-cost areas.”

Rural telecom carriers have been fighting against wireless carriers for universal-service support as both the amount of subsidies and number of carriers receiving support has increased. But both sides agree the board’s recommendation falls short.

“If the ’96 telecom act stands for anything, then it stands for competitive neutrality, innovation and new investment opportunities,” said Mark Rubin, director of government affairs for Western Wireless Corp. “Aside from the huge implementation difficulties associated with this idea, a primary-line restriction and the related proposals are about as far from the act’s lofty goals as one can get.”

“Limiting universal service support to a single line is not the right way to control the growth of the fund. Instead, the National Telecommunications Cooperative Association believes the program needs better management. … The system has worked for rural LECs for years under that premise without the need to limit the fund to primary lines. It is the policy of providing competitors’ universal service support without a demonstration of their costs that has caused today’s critical funding problem,” said Michael E. Brunner, NTCA president.

There is a fear that the high-cost universal-service fund will go bankrupt because the number of carriers eligible to take from the fund is increasing at a time when long-distance revenues are decreasing. To address the problem, the FCC asked the joint board-made up of both state and federal regulators and a consumer advocate-to make recommendations on how the USF can be saved. The FCC now has a year to decide whether to accept or reject the recommendation. FCC Commissioner Kathleen Abernathy, who chaired the joint board, said she does not know how she will vote on second-line support.

Under the primary-line restriction, one carrier could receive support for one household instead of the current system where carriers receive support based on how many lines are serviced.


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