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Federal-State Joint Board on Universal Service Recommends Cap on High-Cost Fund and Seeks Comment on Comprehensive Universal Service Reform

May 4, 2007                       

Comments Due:                    May 31, 2007
Reply Comments Due:          July 2, 2007

The Federal-State Joint Board on Universal Service (the “Joint Board”) recommended on May 1, 2007 that the Federal Communications Commission (“FCC”) take immediate action to stem the dramatic growth in high-cost universal service support disbursements (the “Recommended Decision”).  Specifically, the Joint Board recommended that the FCC impose an interim, emergency cap on the amount of high-cost support that competitive eligible telecommunications carriers (“ETCs”) may receive for each state based on the average level of competitive ETC support distributed in that state in 2006.  The interim cap will apply to all of the existing high-cost support mechanisms, to include high-cost loop support (including safety net support and safety valve support), local switching support, high-cost model support, interstate common line support, and interstate access support.  The Joint Board did not recommend additional caps on support provided to incumbent LECs on the grounds that (i) there was less growth pressure from incumbent LECs, and (ii) the incumbent LEC high-cost loop support was already capped and incumbent interstate access support had a targeted limit.  Likewise, the Joint Board declined to recommend that the FCC exempt wireline competitive ETCs from the cap.

Additionally, the Joint Board recommended that the Joint Board and the FCC further explore comprehensive high-cost distribution reform.  To that end, in a separate public notice, the Joint Board is seeking comment on the following issues and proposals for comprehensive reform:
 

• Whether the Joint Board and the FCC should consider adding broadband to the list of supported services, and whether there are statutory impediments to doing so;

• The use of reverse auctions to determine high-cost universal support;

 

• The use of geographic information systems (“GIS”)  technology and network cost modeling to better calculate and target support at more granular levels (GIS is defined as the hardware, software, and methods that allow people to create, store, analyze, and distribute spatial information);

• Disaggregation of support below the study area or wire center level; and

 

• The methodology for calculating support for competitive ETCs (currently, the per-line portable universal service support for competitive ETCs is calculated based on the support that the incumbent LEC would receive for the same line, i.e., the identical support rule).

Interested parties may file comments and reply comments on or before May 31, 2007 and July 2, 2007, respectively.

Finally, in the Recommended Decision the Joint Board stated that it would make further recommendations for comprehensive high-cost universal service reform within six months of the Recommended Decision.  Additionally, it recommended that the FCC act on these further recommendations within one year from the date of the Joint Board’s further recommended decision.

We would be pleased to respond to any questions regarding these matters.

 

 

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