ICORE Files Comments on NPRM Concerning USF Support for Rate of Return Carriers

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Our May 25th Comments stressed to the FCC that to meet its goals of Universal Service, support to high cost, low revenue rural areas must be consistent, predictable and fully sufficient to allow for the growth and deployment of advanced, high speed broadband services. Thus, the Commission, “must not be bound by any rigid budget control mechanism, but rather be flexible enough to adapt to changing circumstances and conditions.”

As far as the high cost budget for RoR carriers, we recommended a base of the total, actual 2017 HCLS/CAF-related revenue requirement of all affected carriers. It could then be adjusted to 2018 levels using both an inflation factor and an estimate of the total 2018 costs for additional high speed, advanced broadband services.

Addressing the question of a new A-CAM model offer, we pointed out that the original offer, “resulted in an inadvertent, but still unfair ‘bait and switch,’ due to unanticipated interest in the model. So many carriers chose A-CAM, in fact, that the per location support amount was substantially reduced to stay within (the FCC’s) budget.” We urged the FCC to restore the original $200 figure.

“It would be even more fair and equitable to allow every Rate of Return carrier the opportunity to choose the A-CAM model, regardless of resultant settlement level,” we stated. This is true because, “Both the Commission and its subject rural carriers have gained considerable knowledge and experience since the initial A-CAM offer. Rate of Return carriers are now far more capable of assessing their options and making reasoned decisions.”

We called the budget control mechanism “arbitrary and capricious,” in that, “its imposition often prevents carriers from receiving support that they have been promised, and on which they have based critical management and investment decisions.” By denying them the opportunity to recover their full costs, “it acts as a deterrent to the key universal service goal of extending rapid, advanced and affordable broadband service to every American.”

“ICORE cannot stress strongly enough,” we said, “that any budget control mechanism that interferes with universal service at affordable rates in rural America must be changed to one that encourages the attainment of universal service goals. Any budget control mechanism that requires stop-gap measures every year to overcome its deleterious effects must be changed to one that provides constant and sufficient support to the nation’s smallest carriers.”

“And any budget control mechanism that prevents small carriers from recovering their true and valid costs of providing advanced, high speed broadband services in those high cost, low revenue-opportunity areas of rural America, must be changed or completely abandoned.”

As always, we will keep you informed as the FCC progresses in this proceeding.