Western Wireless Corp. said it has asked the Federal Communications Commission to discontinue using the Rate-of-Return regulatory system for setting rural telephone companies’ universal service support and access charges, arguing the system “bloats the universal service fund, creates opportunities and incentives for waste, fraud and abuse, and inhibits the development of efficient, innovative and competitive services for rural consumers.”
“Rate-of-Return regulation has outlived its time and must be replaced with a more appropriate form of regulation based upon today’s competitive environment,” said John Stanton, chairman and chief executive officer of Western Wireless. “This petition will help modernize the federal universal service system, bring the full benefits of the telecommunications revolution to rural Americans and eliminate the ongoing distortions and incentives for over-funding the rural telephone companies that permeate the current system.”
In place of the current system, Western Wireless proposes rules to be implemented in 2006 for competitive ETCs, non-rural telephone companies and rural telephone companies owned by relatively large holding companies and that would be phased in during the next six years for small rural companies.
“By eliminating RoR for universal support, the Commission can take the bold step that will cement the benefits of competition and create strong incentives for both wireless carriers and traditional telephone companies to bring advanced telecommunications services to all rural consumers,” Stanton added.
