Thursday, October 27, 2011

FCC Releases Summary of USF Reform Order 10/27/2011 San Francisco - In keeping with its arcane practice of releasing final written regulatory orders days and sometimes months after they are voted on, the Federal Communications Commission has so far issued only an executive summary of its important Universal Service Fund / Intercarrier Compensation reform Order.

The Order and Final Notice of Proposed Rulemaking, of ultimate importance to American's rural telecom providers, was adopted by unanimous vote by the Commission this morning. The 7-page Executive Summary, released to the media by the Commission's Office of Communications following this morning's open meeting, is comprised of 26 paragraph sections which address 17 key points.

In a simultaneously issued press release, the Commission summarized the Order's thrust in 4 areas:
·         INCREASED CONSUMER BENEFITS: The FCC estimates that, over the next six years, the Connect America Fund will expand broadband access to over 7 million residents of rural areas who are currently unserved, and will put the country on the path to universal broadband within a decade. The Mobility Fund will expand advanced mobile broadband access to tens of thousands of road miles, where millions of people work, live, and travel, and will include dedicated support for Tribal areas. Intercarrier compensation reform will eliminate hidden costs in consumer bills, providing economic benefits to long distance and wireless consumers across the nation of $2.2 billion annually in the form of lower prices, better value for the money, or both. Expanded broadband access will generate approximately 500,000 jobs over the next six years. As part of this reform, some consumers may pay, on average, an additional 10 to 15 cents a month on their bills; but for every dollar in cost, reform will provide $3 in benefits for consumers. And no additional charges can be imposed on consumer phone bills that are at or above $30 a month (inclusive of most fees consumers pay on their bills), nor can such charges be imposed on low-income consumers served by the FCC’s Lifeline program. Any new charges will begin to decline after six years.

·         COMMIT TO FISCAL RESPONSIBILITY: A firm annual budget set at current levels—$4.5 billion—will prevent growth in the Fund and help protect consumers from increased contribution fees. Programs that provide subsidies where they are not needed are eliminated, and compensation for corporate overhead expenses is reduced. Market-based mechanisms, including competitive bidding, will be used to distribute money more efficiently.

·         DEMAND ACCOUNTABILITY: In order to receive Connect America Fund support, carriers must demonstrate they are deploying broadband to their customers. These networks must meet performance criteria that enable the use of common applications such as distance learning, remote health monitoring, VoIP, two-way high quality video conferencing, Web browsing, and email.

·         ENCOURAGE DEPLOYMENT OF MODERN NETWORKS: Intercarrier compensation distorts investment in technology and discourages investment in modern Internet Protocol networks. It is also unfair to consumers, forcing wireless and long distance customers to provide billions of dollars per year in hidden subsidies to phone companies. Reform will ensure fairness to consumers, promote competition, and foster innovation in communications services.  In addition, the Order takes immediate action to end wasteful and costly gaming of the intercarrier system, including schemes such as phantom traffic and traffic pumping.

The 7-page document is attached:
FCC Executive Summary - USF-ICC Order & FNPRM

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