As anticipated, several key players in the telecom industry have submitted a plan for sweeping changes to the Universal Service Fund (USF) program and to the inter-carrier compensation (ICC) system. The plan, called America’s Broadband Connectivity Plan, was submitted by AT&T, CenturyLink, FairPoint, Frontier, Verizon, and Windstream.

The plan is sure to heat up a debate which has already begun, with factions of the rural telecom industry opposed to its adoption.

The plan has garnered some initial support of rural telecom associations, NTCA, OPASTCO, and WTA. They submitted a joint letter, discussing their support for the foundation of the plan, but stopped short of an outright endorsement. In their comments, the associations say they are “…not signing onto any plan being filed by the USTelecom members. Instead, we are simply filing a joint letter with these other industry stakeholders explaining how their plan and the Rural Associations’ plan can work in tandem to create an effective framework for reasonable USF and ICC reform.”

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The framework is fairly detailed and an America’s Broadband Connectivity website has been launched to explain it. The key points of the approach from these carriers for USF reform include:

  • Connect virtually all Americans to broadband access within 5 years.
  • Do so without growing the $4.5 billion high-cost USF.
  • Target support to broadband deployment in areas where there is no business case for companies to provide service.
  • Promote efficiency by: 1) Targeting support more precisely to identified high-cost areas, and 2) Supporting only one provider in each area.
  • “Broadband” is defined as a minimum of 4 mbps downstream and 768 kbps upstream (supporting robust education, health care and other applications).

And the key points surrounding ICC reform include:

  • Transition terminating intercarrier compensation to a low, uniform default rate of $0.0007 per minute over a five- to eight-year timeframe.
  • Eliminate, through new rules and lower access rates, costly arbitrage scams that exploit today’s outdated rules at the expense of broadband companies and consumers, as well as FCC resources, as the Commission chases after these fast-proliferating schemes.

There is significant opposition to this approach from corners of the rural telecom industry. The Rural Broadband Alliance, an organization representing some of these dissenters issued a press release late last night, saying “We must vigorously oppose the large carrier-industry deal. This deal is a windfall for large carriers, like AT&T and Verizon, and does not meet the needs of the millions of customers we serve in rural America.  It is simply a bad deal for rural America.” Safe to say they are not mincing words.

This development should make for an interesting rest of the summer and 2011. The FCC will take in these comments and suggestions to help frame the new rules regarding USF, the Connect America Fund, and ICC reform. Given the players represented by America’s Broadband Connectivity Plan, I’m sure their framework will be heavily represented in the proposed rules. Let the debate continue …

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9 thoughts on “Hello America’s Broadband Connectivity Plan

  1. See – this is the problem with Washington. The very people who the FCC are regulating are the ones that write the rules for the FCC to adopt and enforce.

  2. Ya know, I see this .0007 rate being touted. What I really don’t understand is what the difference is between $0.0007 and $0.0000. To us small telcos with a very small percentage of minutes compared to the price cap companies, it might as well be zero (if you're going to lower it to .0007). It’s only the large carriers who will still see significant income with a .0007 rate….simply because you need millions and millions of minutes for that rate to produce any revenue. Small telcos don't have those amount of minutes. No wonder price cap companies are fine with that rate – they know that smaller rate of return telcos will have difficulty surviving with a rate like that…making less competition for USF.

    1. There's a restructuring mechanism for small telcos that would provide cost recovery need to replace access revenues in order to continue broadband deployment.

  3. It's total bulls— to call a plan crafted by the biggest telcos that are already snaking over $2 billion of the USF "America's plan!" How much of this nonsense represents input from American communities that are suffering from no coverage or crappy coverage? What possible constituent in a rural or urban area of America jumped up and said "yep, give me some that screaming 756K access'?

    What small, medium or large businesses swooned at the thought of how networks built to this plan's specs will enable U.S. communities to improve their local economies? How is it possible for the plan's authors to not to be struck by lightening for using "robust applications" and "4 Mbps" in the same sentence? Calling this document "America's plan" is a screaming obscenity and a bold-faced lie!

    Any plan that doesn't enable/encourage communities and local or regional providers to partner in the pursuit of USF funds with an even chance against huge telcos is NOT reform. It's more of the same telco-dominated junk, only worse.

    1. craig – you need to learn how to better express yourself. holding your feelings in is not good for you, physically or mentally.

  4. There has to be a better way than Access MOU. Originating bypass by VoIP carriers. Terminating bypass by phantom carriers. I hate to say it but the good ole days of LD are over. Access minutes only make a landline more vunerable to wireless service which has no domestic LD.

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