Tele-Tech's Blog

FCC to Vote on USF Reform October 27

FCC Chairman Julius Genachowski unveiled in a speech Thursday a broad outline to reform the Universal Service Fund (USF) and Intercarrier Compensation (ICC) system.

Genachowski included elements from different proposals by industry members (the ABC Plan, the RLEC Plan and the plan submitted by the State Members of the Federal State Joint Board on Universal Service) but stated, “It will not rubber stamp or adopt wholesale the proposals of any stakeholder or group of stakeholders.”

For example, he said the plan would not eliminate states’ carrier of last resort obligations nor eliminate states’ responsibility for designating eligible telecommunications carriers. Plus, Connect America Fund support would not be provided as part of ICC recovery without accompanying broadband obligations.

Based on his speech, here is an outline of the Chairman’s plan: 

• Begin broadband build-out in 2012
• Create a separate Mobility Fund alongside the Connect America Fund
• Target funding exclusively in areas without an unsubsidized competitor
• Transition to a competitive bidding process
• Include a waiver process for special cases
• Close loopholes on phantom traffic and traffic pumping
• Phase down access rates over a measured but multi-year transition path, beginning with lowering intrastate access rates to interstate rate levels
• Address terminating charges and assess the appropriate transition path for other rate elements

The reform order has been given to the Commissioners. They’re scheduled to vote on the plan October 27.

Read the Chairman’s speech at www.fcc.gov.