Hats Off to the Small Company Coalition, Again

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Our August 10th, 2017 blog praised the SCC for being a strong advocate on behalf of small RLECs. In late January, members of the coalition held a teleconference with FCC Chairman Pai’s Wireline Advisor to discuss a draft Order that will add $500 million in USF support for RLEC broadband deployment. (See our January 18th, 2018 blog.)

The SCC learned that $180 million of the proposed amount would represent a one-time payment to RoR carriers, to offset shortfalls caused by the Commission’s Budget Control Mechanism (BCM), for the year ending June 18, 2018. The remainder — $380 million – would go to ACAM companies, to be paid over approximately 10 years, retroactive to July 1, 2017.

The troublesome BCM and its arbitrary $2 billion cap will be reviewed in an upcoming NPRM. The FCC, according to the SCC, is considering a change in the treatment of operating expenses (OpEx), with amounts up to a prescribed limit not being subject to the BCM.

The rapid growth of wireless and broadband lines versus voice lines has caused reductions in payments to many RLECs. The SCC will develop recommendations on how settlement formulas can be restructured to eliminate the current voice line bias, providing more fair and equitable USF revenues to small RLECs.

This is very promising news for the nation’s small, rural carriers, and the SCC is in the middle of the battle. We applaud the efforts of Laurel Highland Telephone Company’s Jim Kail and all other SCC executives and members.