U.S. Representative Jeff Landry (R-La.) has introduced legislation aimed at curtailing FCC efforts to cut back on payments to rural rate-of-return telcos through the Universal Service program. The official name of the bill is the “Restore Effective Statistics to the Calculation of USF Expenditures (RESCUE) Act of 2012.”
According to Shirley Bloomfield, CEO of the National Telecommunications Cooperative Association, the bill takes aim at “three of the most significant shortcomings of the commission’s new statistical caps on universal service support.”
In a statement, Bloomfield highlighted those “shortcomings,” including the caps’:
- disregard for statutory mandates requiring that federal universal service support be predictable;
- alarming inaccuracy, and
- retroactive nature that penalizes prior commitments made in good faith by job creators all over this country
The statistical caps that Bloomfield referenced were adopted back in April, when the FCC launched a plan to use regression analysis to limit the amount of high-cost loop support any individual small rural telco could receive.
At that time, the FCC estimated that about 100 of the nation’s small telcos initially would see their high-cost loop support decrease as a result of the caps. Which carriers will see their high-cost loop support decrease in future rounds depends on how their costs compare to other telcos – a methodology the small telcos say is unpredictable and which, according to the Landry bill, conflicts with statutory mandates.
Rural telcos argue that the caps are unfair because they have been imposed on money that has already been spent.
Included with the order adopting the new caps was a listing of each of the nation’s small rate-of-return carriers, indicating the high-cost loop cap imposed by the regression model. Some small carriers say they have found inaccuracies in the numbers that were calculated.
The FCC has invited telcos who believe their caps are incorrect to use a waiver process – and at least one small telco already has filed for and received a waiver.
Landry’s legislation is just one avenue rural telcos have pursued to put a halt to the caps on high-cost loop support. Other avenues have included filing a petition for reconsideration about the cost model and protesting the retroactive nature of the caps as part of the Connect America Fund order appeal process.