Rural Provider Groups Suggest Solutions on Universal Service Reform

WASHINGTON, April 19, 2011 – The National Telecommunications Cooperative Association (NTCA) and the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), in conjunction with 30 state and regional associations released to the FCC their recommendations to fix the Universal Service Fund on Monday.

Each of the groups agrees that the current Universal Service Fund needs to be updated to include broadband in addition to traditional telephony.  They fear, however, that the Federal Communications Commission will move too quickly, stranding companies that have already invested heavily in providing telephone service to rural areas.

The groups submitted a joint filing requesting the FCC to develop a cost-based system, which will slowly decrease USF support over an extended period. Firms need the extended time to recoup investment costs from the telephone systems and redirect investment to broadband deployment.

“With our joint association filing, the Commission has the fundamentals necessary to ensure that rural consumers, served by rural carriers, have access to the robust broadband infrastructure they have come to depend on,” OPASTCO President John Rose said in a statement on Monday. “It is crucial that the Commission consider both the short-term and long-term plan transitions, as outlined in the joint association filing, if they are to build on existing broadband infrastructure and further a national broadband plan that will benefit our entire country,”

The associations also requested that the FCC update the intercarrier compensation (ICC) regulations to confirm that Voice over IP (VoIP) providers must pay traditional phone companies to transfer their traffic.

The ICC is a system by which carriers make payments to each other for connecting calls.  Voice traffic is subject to the ICC, but data traffic is not. VoIP services, such as Skype and Vonage, provide voice services, but the calls are transmitted as data which has caused confusion over if the service should pay into the intercarrier system.

Currently VoIP providers claim that since VoIP is not a telecommunications service and therefore not subject to the regulations.