NCTA offers insight on how FCC can save $2B

Fri, 11/06/2009 - 7:40am
Mike Robuck

The National Cable & Telecommunications Association offered up its advice yesterday on how the Federal Communications Commission can redirect $2 billion from subsidizing telephone companies in rural areas, where it said competition already exists to fund programs that actually promote broadband deployment and adoption.

The NCTA’s petition for rulemaking said it was critical that the FCC update its Universal Service Fund (USF) program. The NCTA said the existing USF program no longer reflects the current marketplace in which consumers have the choice of unsubsidized voice providers, including cable’s voice service, throughout much of the country. The petition included a study showing that the Commission was providing billions of dollars to incumbent phone companies (ILECs) that are serving areas where competitors have entered without any subsidy.

“The USF program operates as if nothing has changed since 1996,” according to the petition. “Even as millions of Americans take service from facilities-based wireline competitors, and millions more decide they no longer need wireline voice services at all, the Commission continues to provide billions of dollars of support for wireline voice services. The total size of the federal USF program, and the resulting burden on consumers, continues to escalate at a staggering rate.”

The NCTA suggested that the FCC establish a two-step process that would enable the Commission to reassess the level of Universal Service Fund support that is provided in specific geographic study areas, where it can be demonstrated that there is extensive facilities-based wireline competition from providers that are not receiving subsidies.

In geographic areas where adequate unsubsidized competition exists, providers only should be subsidized to the extent that they can demonstrate that there are specific costs associated with serving the non-competitive portion of the study area that cannot be recovered from regulated and unregulated services.
“As the record in the National Broadband Plan proceeding demonstrates, achieving the congressional goal of universal access to broadband capability will be difficult to achieve without government programs dedicated to deploying facilities in unserved areas and promoting adoption by underserved populations,” the NCTA’s petition said. “As the Commission considers NCTA’s proposal to reduce support where it no longer is needed, it separately should consider whether, and how, it could redirect any savings from NCTA’s proposal to provide targeted funding to programs that promote broadband deployment and adoption.”

NCTA President and CEO Kyle McSlarrow also called on the federal government to dedicate significant broadband stimulus funding to create and maintain a national digital media literacy program.

McSlarrow’s comments yesterday were during keynote remarks at the 2009 Annual Conference of the Family Online Safety Institute in Washington, D.C.

Improving digital literacy is an important step toward helping all Americans become full-fledged “digital citizens,” McSlarrow said. He noted that the NCTA joined with online safety advocates earlier this year in advocating federal funding for digital media literacy.

“Congress should direct that the agencies managing distribution of broadband stimulus funding allocate $500 million during the next two years for the development of digital media education tools,” McSlarrow said. “With a substantial portion of stimulus funding yet to be allocated, and with the broadband adoption rate continuing to increase from coast to coast, we must vigorously renew this call to acknowledge as a national priority digital literacy for children and families.”

More Broadband Direct 11/06/09:
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•  Cablevision adds mobile app for DVR control
•  Knology buys small, nearby operator
•  Clearwire refills executive ranks
•  NCTA offers insight on how FCC can save $2B
•  JDSU reduces loss in fiscal Q1
•  Vecima brings on Funnell, promotes Kumar
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•  Broadband Briefs for 11/06/09

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