WASHINGTON-Five trade associations representing rural wireline carriers objected on Wednesday to a restriction on universal-service support subsidies to only primary lines.
“Most wireless carriers have only constructed facilities in town and along the major highways of a rural study area and any universal-service support they receive may be used to ‘edge-out’ into the less densely populated areas,” said the Independent Telephone and Telecommunications Alliance, the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies, the United States Telecom Association and the Western Alliance. “Before rural incumbent local exchange carriers and other eligible telecommunications carriers will invest in high-cost infrastructure they must have a reasonable expectation that they will recover their costs.”
Rural ILECs have been fighting against wireless carriers for universal-service support as both the amount of subsidies and number of carriers receiving support have increased. There is a fear that the high-cost universal-service fund will go bankrupt because this is occurring at a time when long-distance revenues are decreasing.
The Federal Communications Commission has asked the Federal-State Joint Board on Universal Service-made up of both state and federal regulators and a consumer advocate-to make recommendations on how the USF can be saved.
One of the options that the joint board is looking at is limiting support to only “primary lines” so that one carrier could only receive support for one household instead of the current system where carriers receive support based on how many lines are serviced. This system has also allowed wireless carriers to receive support for serving rural customers even if the customer has not cut the cord.
The Telecommunications Act of 1996 allowed universal-service support to become portable so that the carrier that is serving the customer received the support for serving that customer.
The second-line controversy is not new. As the FCC developed the universal-service rules in the wake of the passage of the telecom act, there was a great debate about whether support should be given for second lines. It was finally decided that support should be granted for additional lines in an effort to spur the take rate on broadband services. The theory was if a rural customer had access to dial-up service then they would eventually want broadband.
