Rural carriers wince at FCC’s universal service plans

A group of rural and small wireless providers asked the Federal Communications Commission to reconsider its decision to impose an interim cap on high-cost universal service fund payments to eligible telecommunications carriers, urging the agency to refrain from putting the rule into effect and raising the prospect of a court challenge if federal regulators do not provide relief.
“The petition highlights the fact that the high-cost fund ’emergency’ alleged by the commission is a farce,” said Eric Peterson, executive director of the Rural Cellular Association, one of the parties seeking changes to the FCC ruling. “The decision to implement the cap is based on inaccurate facts, false assumptions, flawed legal reasoning and ignores Congressional direction and the principle of competitive neutrality. The commission cried wolf.”
FCC Chairman Kevin Martin said action was needed, given the ballooning payments to mostly wireless carriers that have grown from $1.5 million in 2000 to more than $1 billion in 2007. At the same time, rural wireline carriers receive three times as much as wireless operators from the high-cost universal service fund.
“Thus far, the commission has chosen to ignore those who have challenged implementation of the cap,” Peterson stated. “It is RCA’s hope that the commission takes notice of this petition, considers the wealth of facts provided demonstrating that the cap is not warranted, and finally engages in reasoned decision-making on this issue. If it does, the commission will have no choice but to reconsider its implementation of the cap.”
On a related front, Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, recently launched an investigation on USF rural subsidies, seeking information in letters sent to Alltel Communications L.L.C., AT&T Inc., Sprint Nextel Corp., Verizon Communications Inc. and rural telephone companies.