FCC Order Will Respond to 10th Circuit Remand on Non-Rural High-Cost USF

The FCC is circulating a proposed order in response to a remand by the 10th U.S. Circuit Court of Appeals, an FCC official said. In 2001 and 2005, the court called the commission’s current non-rural high cost support mechanism unlawful, and reversed and remanded the rules. The commissioners will vote on the order by April 16, the official said. The FCC agreed to the deadline after Qwest and three state regulators filed a mandamus petition last year, the FCC official said.

Qwest supports the Universal Service Fund reform recommendations in the National Broadband Plan, but “the FCC needs to take immediate action on the high cost fund for non-rural carriers to comply with the court’s two remand orders,” said Senior Vice President of Public Policy and Government Relations Steve Davis in a statement. The rules were remanded twice, “and we believe the commission needs to address the deficiencies now,” he said. The broadband plan recommendations are not rules, he said: “It is very speculative when rules implementing those changes would be adopted and implemented, as well as whether the rules ultimately adopted would vary significantly from the plan’s recommendations."

The efforts toward comprehensive reform outlined in the broadband plan could have “an effect that might make this Qwest II remand something that is either less or more important,” said Vermont Public Service Board Commissioner John Burke in an interview. Initially, there was a belief there would be comprehensive reform that would make part of this less of an issue, “but that was five years ago,” he said. “How do we know it (reform) is going to happen this time?"

The Independent Telephone & Telecommunications Alliance says it’s tough to determine whether the broadband plan takes care of non-rural carriers. The multi-year transition is a “long way off,” said Joshua Seidemann, vice president of regulatory affairs: “The matter of non-rural support is here today. Let’s get something done today.” The court’s opinions “have given guidance to the FCC on how non-rural support should be addressed,” he said. “I think it’s good to focus on the guideposts the court has set to get a sustainable order on the matter.”

In drafting the order, the FCC should be mindful of Sections 253 and 254 of the Telecommunications Act, Burke said. When considering its guidelines for funding broadband or plain old telephone service in rural areas, “you should set forth a reasonably comparable service at reasonably comparable rates, so rural America doesn’t lag behind everyone else,” he said. “It doesn’t necessarily mean equivalent but it doesn’t mean disparate either."

The FCC’s response to Qwest II remains important “because that case concerned unresolved basic USF issues,” the Wyoming Public Service Commission said in a statement. “The sufficiency and comparability of the support provided to non-rural carriers serving extremely rural areas were not adequately addressed.”