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SHLB Coalition Requests Community Anchors to be Covered by Upcoming USF Report and Order

The FCC is expected to adopt a Report and Order on Thursday, Oct. 27, that will dramatically reform the way telecommunications services are deployed in rural areas of the country.  The FCC is to establish the Connect America Fund (“CAF”), which will allow Universal Service Fund (“USF”) dollars to support broadband deployment in these rural areas.  Notably, this reform effort will result in a groundbreaking switch from the USF supporting Universal Plain Old Telephone Service (POTS) to supporting Universal Broadband via wireline, terrestrial wireless and satellite services.

This Order also reforms the federal Intercarrier Compensation system, which requires telecommunications service providers to compensate each other for originating and terminating calls on each other’s networks.

The leadership of the relevant Senate and House Committees has already provided the “green light” for the FCC to move forward so expectations are high amongst the telecommunications industry and the Members of Congress that this reform effort will benefit rural consumers.

On Feb. 8, Senate Commerce Committee Chairman John D. Rockefeller IV (D-WV) praised the FCC “…for taking up the task of universal service reform.”  He continued, “If it is done well, we can provide broadband and wireless service to every corner of this nation.”

On June 22, the House Energy & Commerce Committee Chairman Fred Upton (R-MI) said, “We are at a critical juncture for reforming the Universal Service Fund and resolving the problems of the past.”  Upton continued, “Doing so will not be easy.  But I believe that if the industry comes together and if the FCC adopts market-based, technology-neutral mechanisms to target support to the high-cost consumers who need it most, real reform is within reach.”

The industry’s legacy USF recipients and potentially new CAF recipients are very anxious about this reform effort as the CAF will likely distribute about $4.4 billion of support annually out of an $8.4 billion total program budget.  It is estimated that the average rural telephone company receives about 75% of its “revenue” from USF distribution and Intercarrier Compensation payments so the stakeholders have a lot at risk regarding this outcome.

The SHLB Coalition - of which EDUCAUSE is a member (see http://shlbc.org/) - is focused on ensuring that the FCC requires CAF recipients to design their broadband deployment plans with schools, libraries and other community anchor institutions in mind in addition to their residential customers.  On Oct. 20, the SHLB Coalition sent a letter to FCC Chairman Genachowski expressing this sentiment.  See: http://www.educause.edu/ir/library/pdf/EPO1114.pdf

We will provide an analysis of the FCC Order once it is released.  If you have any questions about this issue, please let us know.

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