FCC Plan to Revamp USF, Intercarrier Payments

NASHVILLE -- The Federal Communications Commission (FCC) ’s National Broadband Plan, formally released today in Washington, provides a roadmap for revamping the Universal Service Fund (USF) and Intercarrier Compensation, two long-standing hot-button issues for telecom service providers, according to two FCC staffers speaking to the Comptel Spring Convention here this week. (See FCC Sends Broadband Plan to Congress and Policy Watch: Drafting a Broadband Plan .)

Sharon Gillett, Wireline Competition bureau chief for the FCC, said the broadband plan will lay out a three-phased blueprint to shift intercarrier compensation over a 10-year period away from today’s per-minute rates and toward a flat-rate that's likely to be lower. At the same time, Gillett said, the plan would add cost-recovery as needed for smaller telephone companies that today are dependent on intercarrier compensation, and it would shift compensation away from today’s dependence on long-distance voice services.

"What the plan lays out in that 10-year transition is a three-phase decline in the intercarrier compensation curve -- not really a decline, but a shift. The idea is to provide adequate cost recovery coverage, but not to do it on a per-minute basis."

In an all-IP world, it doesn’t make sense to try to identify the long-distance voice packets and try to count them for intercarrier compensation purposes, Gillett said, when flat rates are more logical.

The National Broadband Plan also calls for a phased-in shift of the Universal Service Fund away from narrowband services to broadband services, according to Gillett. The plan would target the amount of USF money distributed "based on the gap between revenues and costs in areas that don’t have broadband, or areas that need ongoing support to keep the broadband they have."

"We would shift about $16 billion over 10 years into explicit support for broadband, and by the end of 10 years, we are supporting only broadband networks. If you have a voice-only network, there would be no more [USF] funding."

Gillett and Paul de Sa, chief of the office of Strategic Planning and Policy Analysis for the FCC, promised the Comptel audience that the National Broadband Plan will also lay out a roadmap for the FCC’s future work, and provide the kind of transparency that will make it possible for all players in the telecom industry to know what is going on and to have input on issues that concern them.

De Sa cautioned the audience to not get caught up in the details of the plan and fail to see the big picture.

"This is not a tactical plan -- part of its value is holistically providing a strategy," noted de Sa.

Congressional action will be needed to implement parts of the plan and to fund it, de Sa and Gillett said, and other agencies will be involved as well, but the FCC can move forward on at least a third of the plan on its own, and is prepared to do so with current staff and funding.

"If Congress gives us more money, we can move to full deployment faster, but if not, we can get it done anyway," said de Sa. "It will just take longer."

The people who have been drafting the National Broadband Plan under the direction of Blair Levin have been undergoing a rigorous exit interview process to share with the FCC staff the information gleaned from many months of hearings and information-gathering, Gillett noted, and the FCC may be able to add some human resources to capitalize on that knowledge.

"We are prepared to make do with what we’ve got," Gillett said, although that will mean prioritizing, since everything could, in theory, be done simultaneously. That, she observed, is where the FCC’s roadmap and promise for transparency becomes more important.

— Carol Wilson, Chief Editor, Events, Light Reading