Bells Call for Changes To High-Cost Support Scheme

• Published in: Telecommunications Reports 2004-11, Vol.70 (21), p.24
• Main Author: Boles, Margaret
• Format: Article
• Language: English
• Subjects: Carriers; Compensation; Competition; Costs; Customer services; Funding; Rural areas; Task forces; Telecommunications policy; Universal service; Wireless carriers
• ISSN: 0163-9854

'This proceeding offers a clear opportunity to address the asymmetrical high-cost funding of larger rural and non-rural carriers in a manner that will protect against unwarranted fund growth, while ensuring continued affordable local service to all rural communities," said Verizon Communication, Inc., in comments filed Oct. 15 in CC docket 96-45. "The Commission should do so by limiting the size of carriers that qualify for rural support, with larger carriers receiving support on a similar basis as non-rural carriers, by freezing the amount of per-line support, and by limiting the number of eligible telecommunications carriers (ETCs) [authorized] to serve rural areas." "All carriers with more than 100,000 Unes in a state should be transitioned to the same basis of high-cost support as the nonrural carriers," Verizon said. In an effort to curb certain carriers from receiving more than their fair share of support, Verizon said, "For purposes of determining the amount of lines served (and thus the amount of high-cost support received), carriers should be directed to report all lines in the state that are under common ownership as part of one study area." Although Verizon advocated keeping smaller rural carriers that serve few wire centers under the existing support system, it urged the Commission to freeze their line support and limit the number of designated ETCs in an effort to "check against unwarranted growth and inadequacies." SBC Communications, Inc., urged the Commission to recognize "that the existing federal high cost support mechanisms draw an arbitrary distinction between purportedly 'rural' and 'nonrural' carriers based on the size of the carrier, and ignore the fact that so-called 'nonrural' carriers in fact serve far more customers in rural and other high-cost areas than 'rural' carriers." SBC said, "Such an approach cannot be reconciled with the statute." Western Wireless said the Commission should instead adopt rules "governing universal service that provide funding based upon the long-standing 'principles of competitive neutrality' and portability, which the courts have confirmed are 'dictated' by the 'statutory command' of section 254(e)" of the 1996 act. A mechanism based on forward-looking costs, the carrier said, "would be the best way to develop a unified system that advances the interests of consumers in rural areas and best serves the goals of economic efficiency and competitive neutrality."