Independent Phone Alliance Urges FCC to Act on Universal Service Fund Reform

WASHINGTON, January 29, 2010 - The Independent Telephone & Telecommunications Alliance is urging the FCC to adopt its price-cap plan so that its members, which are largely mid-size local exchange firms, can get better support from the Universal Service Fund.

The alliance says that many of the regions served by its members do not receive sufficient USF support and a chunk of its members are “challenged by flaws in mechanisms that have been ruled invalid by the U.S. Court of Appeals for the 10^th Circuit.”

The court has remanded the FCC's rules for providing high-cost universal service support to non-rural carriers.

The group expressed concern that if the FCC does not take some interim action to fix basic problems with the USF, the problems will linger as the agency waits to make repairs to the fund as part of its larger, longer and broader efforts to tackle communications reform through the National Broadband Plan.

“It would be naively confident to believe that that the commission’s first efforts to address the NBP and USF reform will be adopted and implemented without some manner of reconsideration or appeal,” the group wrote.

The ITTA’s proposal would combine all of the price-cap study areas in a new mechanism replacing the non-rural mechanism and it would consolidate rate of return study areas. The price cap mechanism would be funded with $1 billion and would be distributed in fixed sums to the lowest density wire centers. The plan would maintain basic rates within a range on an FCC-created table of sample urban rates.