UStelecom Urges Key Changes in Second Round of Broadband Stimulus Funding November 30th, 2009

Experienced Network Providers Offer Best Chance of Sustainable Broadband Deployment & Economic Growth

WASHINGTON, D.C. – Today, USTelecom filed comments with the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) offering the association’s input as the agencies prepare for a pivotal second round of funding for the broadband provisions of the American Recovery and Reinvestment Act.

The comments offer specific proposals for how the agencies can best achieve Congress’ directive to quickly stimulate the economy and expand the availability of broadband to more Americans. USTelecom’s recommendations focus on targeting unserved areas of the country, ensuring the most efficient use of limited taxpayer dollars and modifying program rules to increase the pool of experienced providers who are able to participate in this important national effort.

“Many of our nation’s most experienced broadband providers were forced to sit on the sidelines during the first round of funding,” explained USTelecom President and CEO Walter B. McCormick Jr. “From day one, we set out to better understand why that was the case and to communicate in a constructive way with NTIA and RUS on how we can improve the process. The agencies were under a great deal of time pressure the first time out of the gate. We are hopeful that now—with the wisdom of experience—we can make some changes that allow more of the broadband community to contribute and help achieve the important goals set by Congress to create jobs and spark economic growth by expanding the availability of broadband.”

Among the key recommendations:

• Target unserved areas: Funding”should be effectively targeted to bring broadband to areas that are currently unserved and to promote adoption in areas where broadband is available but customers do not subscribe.” This includes revising RUS’ rural/remote distinction to allow broadband providers to reach more communities with these funds.

• Ease requirements that block participation by experienced providers: Most notably, the filing urges the NTIA not to exceed the scope of existing FCC policy on non-discrimination and interconnection obligations. Other roadblocks include restrictions on the sale of assets and the duration and breadth of program-related requirements.

• Prioritize project sustainability: To ensure taxpayer money is used wisely, NTIA and RUS should require each applicant to demonstrate both the technical and financial ability to complete the proposed project and to ensure the sustainability of the project after funds have been awarded. “Without such a requirement,” the filing notes, “stimulus funds are likely to be wasted on unsustainable or unrealistic projects with little long-term public benefit.”

• Improve transparency: The association encourages NTIA and RUS to upgrade its process to yield the maximum level of useful information as the agencies perform due diligence. This includes providing public access to application data (excepting proprietary or competitively sensitive information). The filing also recommends improvements to the system for commenting on applications, which is widely viewed as unwieldy.

“The agencies have the opportunity to include more applicants and to improve the quality of applications, thereby maximizing the potential benefits of the programs in creating jobs and promoting sustainable broadband availability,” the filing states. “To achieve the most benefit from the finite federal funds dedicated to broadband, stimulus funds should be effectively targeted to bring broadband to areas that are currently unserved and to promote adoption in areas where broadband is available but customers do not subscribe.”

Rural Carriers Withdraw USF Petition for Reconsideration August 27th, 2008

As we’ve reported in our newsletter Crossroads Express (members only), a group of small, rural, wireless CETCs filed a petition for reconsideration with the FCC on the agency’s order imposing a cap on funding to the high cost portion of the Universal Service Fund.  The group’s petition was the only one submitted to the FCC opposing the order.  In an ex parte filed on Friday, however, the group withdrew its petition with no explanation.  It seems logical to conclude that the group is instead opting to challenge the order in court, although that’s just speculation at this point.  Because implementing the cap has been an important goal of USTelecom, we’ll be sure to keep you posted on any developments.

Filing Deadline Extended in Copyright Proceeding August 13th, 2008

As I mentioned last week, the Court of Appeals for the Second Circuit handed broadband providers offering video services a big victory by overturning a lower court’s decision that said Cablevision’s remote storage DVR service violates copyright. Following that decision, the Copyright Office decided to extend the filing deadline in its proceeding on compulsory licensing for making or distributing certain recordings. Since the Cablevision case hinged, in part, on the “buffer” copies of broadcasts that are made with RS-DVR technology, the outcome of the case could impact the proceeding, hence the extended deadline. Comments are now due on August 28, and replies are due September 15 at 5 p.m. The Copyright Office has also proposed a roundtable on the issue scheduled for September 19.

USTelecom Vidcast: Genie Barton on Retention Marketing July 21st, 2008

The FCC recently issued a ruling on a complaint against Verizon’s retention marketing program. Over the objections of FCC Chairman Kevin Martin, the agency determined that Verizon’s use of number porting requests to identify and retention market to its own customers was a violation of proprietary information belonging to the company requesting the port. Especially with regard to the benefits to consumers of competition, USTelecom finds the order highly objectionable. In our most recent Vidcast, we sat down with USTelecom Vice President and General Counsel Genie Barton to talk about why.

USTelecom Fights Against the FCC’s Retention Marketing Order July 9th, 2008

Yesterday, we filed a brief in the U.S. Court of Appeals for the District of Columbia Circuit to support Verizon’s effort to win a stay on implementation of an FCC order that would require the company to discontinue its retention marketing program and would prevent other telecom companies from retention marketing to their customers. For reasons laid out in detail in our brief and discussed in a recent Crossroads Express (USTelecom members only), the order in question is very troubling. In a statement released yesterday afternoon, USTelecom President and CEO Walter B. McCormick explains:

Our brief today protects our members’ First Amendment right to communicate with their customers, and it supports consumers’ right to have access to timely, accurate information about prices and service options. But it also supports a much broader goal: creating a true marketplace for communications services where regardless of platform, providers can compete head-to-head without artificial regulatory advantages. The Order’s result is that cable companies—which offer bundled services that are like those offered by telecom companies—can use retention marketing programs to keep their video customers, but telecom companies can’t use the same methods to retain voice customers: that result is fundamentally unfair. We applaud FCC Chairman Kevin Martin for opposing the Order, and we’re confident that after careful review, the Court will reach the same conclusion and reject it.

We’ll be actively involved in the legal effort to support our members’ ability to compete on a level playing field with other communications providers. As the case unfolds, be sure to check back here on the USTelecom blog for more updates and information.

USTelecom Submits Comments in IRS Proceeding June 10th, 2008

Yesterday, USTelecom submitted comments to the IRS in response to the agency’s request for comment on its proposed regulations on the deduction and capitalization of expenditures related to tangible property. In May, the IRS issued a notice of proposed rulemaking, announced a public hearing, and withdrew regulations previously proposed in 2006 . The regulations covered by the guidance are known more generally as “repair regs.”

In comments we filed in response to the 2006 proposed regulations, USTelecom made numerous recommendations for changes, and we’re pleased to report that the new proposal reflects many of USTelecom’s suggestions from that comment cycle. Yesterday’s submission both praises the IRS for adopting those changes and offers a few more refinements. On June 24, the IRS will hold a public hearing on these regulations, where Mike Mancini of Verizon will present testimony on behalf of USTelecom’s position.

Walter McCormick before the House Telecom Subcommittee May 6th, 2008

In testimony before the House Telecom Subcommittee of the Committee on Energy and Commerce, USTelecom President and CEO Walter B. McCormick Jr. urged Congress to take the time to gather the facts on broadband deployment before enacting premature legislation that could impede investment and innovation in broadband that helps protect the environment and delivers better health care and education services to consumers. Hear the testimony; read the news release or listen to the testimony.

USTelecom Vidcast: David Cohen on USF Reform April 28th, 2008

Last week, we sat down with USTelecom’s Vice President for Policy David Cohen to talk about the current FCC proceeding on universal service reform.

Be sure to also check out this post by David Cohen, which talks more about the ongoing proceedings and USTelecom’s recent filing on the issue.

Comments on Pole Attachments Call for Rate Parity April 24th, 2008

Ever looked at the telephone poles that run down your street or alley?  To the untrained eye it may just look like a jumble of cables, wires, and boxes strapped onto a utility pole.  But it actually reflects the intense – and growing – competition between the cable, telephone, and CLEC companies who deliver bundled voice, video and broadband services to consumers.

Yet despite delivering nearly identical bundled services, cable, telephone and CLEC providers each pay vastly different rates to the pole owners, usually the local electric company. For example, ILEC’s can pay more than 1,400% more for pole attachments than their cable counterparts; the disparity between ILEC and CLEC rates is also high, in some instances near 900%.

But that disparity is coming under increasing scrutiny.  The FCC has initiated a rulemaking proceeding to determine whether broadband attachments by all classes of providers should be subject to one uniform rate.  From a policy perspective, this makes sense.  Why should providers of fundamentally identical services attaching fundamentally similar devices to the poles be charged remarkably different rates?The current rate disparity between ILECs, CLECs, and cable companies puts ILECs at a substantial competitive disadvantage with regard to the prices they can offer consumers.  A broad internal survey of USTelecom members, which we cited in our initial comments in the pole attachment proceeding, highlighted the significant, consistent and widespread disparity in rates charged to various providers.

Yesterday USTelecom filed reply comments in the FCC’s ongoing proceeding on pole attachments, calling for parity in rates among the providers of similar services; as the first round of comments in the proceeding showed, there’s widespread support for rate parity.  Specifically, we write:

The initial comments in this docket clearly demonstrate widespread enthusiasm and support among diverse groups for a uniform, reasonable rate formula for broadband attachments. Representatives from [ILECs], cable providers, wireless providers, [CLECs] and utilities expressed their support for such an approach.

We also noted in the comments that the FCC has ample statutory authority to establish a rate formula to cover broadband attachments for all manner of providers, including ILECs; we certainly hope that the Commission acts on that authority to level the playing field between broadband providers, regardless of platform.

USTelecom Files USF Reform Comments April 23rd, 2008

Reforming the high-cost portion of the Universal Service Fund is critical in order to meet the program’s goal of bringing service to rural and remote communities at prices comparable to urban or suburban areas. While support for incumbent telephone companies has remained flat since 2003, the price tag for support to wireless CETCs has risen exponentially in recent years-from about $15 million annually in 2000 to almost $1 billion in 2006 .

Often those CETC allocations go to carriers that are operating in areas where there is already sufficient competition from unsubsidized providers. That means that in addition to putting unsustainable pressure on the fund, it’s far from clear that the money is actually supporting the objectives of the program.

FCC proceedings on USF reform have been ongoing, and late last week, USTelecom filed comments on three proposals the Commission was seeking comment on: the Joint Board’s proposal for separate mobility, broadband, and provider-of-last-resort funds; the FCC’s NPRM on getting rid of the identical support rule; and the FCC’s NPRM on using reverse auctions.

In the comments filed with the Commission, USTelecom laid out the following proposal for phasing-in reforms to the universal service system:

• cap the growth of high cost support for competitive ETCs;
• gradually remove access support from support provided to competitive ETCs;
• phase out support for multiple wireless competitive ETC lines per household;
• consider end user rates in the calculation of high cost support for fixed line ETCs;
• implement competitive processes such as reverse auctions to reduce the number of wireless competitive ETCs to one per geographic area and to determine their level of support; and
• gradually shift support for wireless CETCs to a project basis to extend wireless coverage.

You can see a press release that we issued about the filing on our website, and USTelecom members can read an in-depth analysis of the issues at hand in last Friday’s edition of our members-only newsletter, Crossroads Express.