NTCA Fights Back Against FCC
The CEO of the NTCA - The Rural Broadband Association says things are bad -- but they could get much worse.
To date, the FCC's orders regarding changes in Universal Service funding will direct most of the money to larger companies, such as AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), because they haven't yet invested to bring broadband to the rural areas they serve. As a result, smaller telcos that have made those investments are losing federal funding, and 50 percent of them will be cash-flow negative by 2015, Bloomfield says. Ninety percent will be cash-flow negative by 2020, under current government rules.
But in issuing those orders, the FCC also indicated it isn't done -- in a further notice of proposed rulemaking, the agency said changes could still be coming for rate of return regulation, to lower the return on investment. That possibility has Bloomfield even more worried.
"Our message to the FCC is that they really need to stop here," says Bloomfield, a keynoter here at the CHR Solutions Summit, an event for current and potential customers of CHR Solutions Inc. , most of whom are small telcos. "We need time to absorb the changes they've already made before they do anything else. We need for the further notice to go away," she adds.
In fact, even the threat of further changes is creating the kind of uncertainty that prevents investment by rural telcos, she argues.
And her message to those telcos is two-fold: One, keep investing so you don't fall behind and put yourself more at risk, and two, create much more noise in Washington in hopes of drawing attention to the plight of rural telcos.
"We need to create a surround-sound of noise," Bloomfield says. "You need to stop being polite -- tell it like it is, tell them what this looks like," she says.
For its part, the NTCA is reaching out to the White House through its Office of Science and Technology, through the U.S. Department of Agriculture and through the White House Council on Rural America.
And the group is threatening to do more, by running ads in key swing states, such as North Carolina, Iowa and Ohio, where there are a number of independent telcos being hit hard by the FCC's recent actions.
"We are reaching out to campaigns on both sides in those states, and we are running editorials in each one," Bloomfield said. And NTCA will be running its own political fundraisers next week at its legislative conference.
The group knows its political capital is limited, in comparison to super PACs and others, but plans to target some key congressional races and to bring to bear the pressure it can on candidates, in hopes they will then pressure the FCC.
Trying to explain the plight of rural telcos to Washington bureaucrats hasn't worked thus far, Bloomfield says. And, as badly as things have gone, they can still get worse.
— Carol Wilson, Chief Editor, Events, Light Reading