Reform must include ongoing support for high cost, hard to serve areas

Washington, D.C. – The Rural Telecommunications Group, Inc. (RTG) filed comments with the FCC today on the FCC’s proposal to reform the universal service fund (USF). The proposal to transform the high-cost program of the USF into the Connect America Fund (CAF) is a radical change that would harm rural America and run counter to the FCC’s and the Obama administration’s broadband policy goals by diminishing the availability of wireless service in rural areas. Without ongoing rural high cost support, many rural wireless carriers will be unable to afford to continue providing wireless service to their rural customers. Because the large nationwide carriers routinely ignore the most rural parts of their service areas, choosing to focus solely on cities and the major highways that connect them, adoption of the FCC’s proposal will leave individuals and businesses that live, work and travel in rural America without the economic and public safety benefits of advanced wireless communications.

Not only does this proposal run counter to the public interest, it violates Sections 254 and 214(e) of the Communications Act and the FCC’s longstanding principle of competitive neutrality by ensuring that support flows only to eligible telecommunications carriers (ETCs).

To the extent the FCC proceeds to phase down current competitive ETC (CETC) support, it should do so over an extended period, and retain CETC support for at least ten years. Such support can not be deemed a replacement for ongoing high cost support for wireless CETCs. Ongoing support will be needed for rural wireless carriers to continue to provide advanced wireless services to high cost, hard to serve areas.

The use of reverse auctions to determine high cost support creates an incentive for anticompetitive behavior by the larger carriers. However, if the FCC chooses to ignore the public interest harms of reverse auctions, any reverse auctions adopted by the FCC should be targeted to unserved areas and based on qualitative factors including size, job creation, and demonstrated dedication to serving rural areas. Long term support should be based on carriers’ actual costs. To fund the FCC’s proposals, the base of contributors to the CAF should be expanded to include broadband service providers.

About RTG – Headquartered in Washington, DC, the Rural Telecommunications Group, Inc. (RTG) is a trade association representing rural wireless carriers who each serve less than 100,000 subscribers. RTG’s members have joined together to speed delivery of new, efficient and innovative telecommunications technologies to remote and underserved communities. ruraltelecomgroup.org @RTGwireless

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