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NewsGlobe: Regulatory
NTCA: FCC Commissioner Calls for Sweeping Regulatory Reform
Candor from Copps Counts with Rural Telco Crowd
by Bob Wallace
The U.S. lacks a broadband strategy, is operating with a broken inter-
carrier compensation system and a universal service fund in need of fast
reform, said FCC Commissioner Michael Copps, in his keynote address at
the National Telecommunications Cooperative Association (NTCA) annual
conference here in San Diego today.
“We need a national broadband strategy [because] I don’t think we have
one now, and to do it we need much more public and private sector
partnerships,” Copps told the overflow audience of rural telcos. “Our
broadband ox is in a ditch.”
Citing ITU research, Copps claimed “the U.S. is number 16 in the world
according to broadband penetration and we’re free-falling down the
scale.” He shouldered some of the responsibility for this grave
predicament by adding that “the commission should do a better job of
getting more information from more sources to make real-world
decisions.”
Echoing concerns of other speakers at the NTCA event, Copps voiced
concern that the goals of urban regions and legislators are taking
precedence of the goals of rural telcos, creating a dangerous gap that
appears to be growing.
“If high-speed broadband is permitted to become a primarily urban
phenomenon, the digital gap will grow wider, [resulting in] rural America
being worse off,” warned the FCC commissioner.
Inter-Carrier Compensation
Copps’ assessments of some top areas of concern beyond broadband
were equally concerning.
Speaking on the core issue of inter-carrier compensation, whereby telcos
are supposed to be paid for traffic that crosses their networks, Copps
said: “The system is Byzantine. It’s broken and has been dissolving
quickly.”
The FCC Commissioner said the area must be addressed head-on right
now to avoid missing a golden opportunity to feed of momentum toward
change in this business-critical area.
“The current situation serves no one,” said Copps in reference to
problems telcos have getting compensated by operators that hide their
identity and for so-called “phantom traffic.”
Copps urged the audience to immediate action on this issue.
“Stay involved and stay at the table, because decisions without you are
often decisions against you,” said the FCC Commissioner, who vowed: “I
will not vote for an order unless it lets you plan for the future.”
Universal Service Fund
Like speakers from day one of the NTCA annual meeting, Copps called for
focused reform of the Universal Service Fund, the system which helps
rural telcos provides core communications services to their typically far
flung constituents.
“A broader base is needed to make the USF more viable,” said Copps in
reference to the need for all providers to contributed to the fund based
on revenues. “I predict 2006 will be the year when action will be taken
on the contribution methodology. We will see reform that will put us on
firming footing.”
Alternative methodologies have been discussed, driven largely by two
issues that have created huge challenges to the fund. The first is the
classification of some operators’ offerings as information services as
opposed to telecommunications services. The second is “the growth if IP
services and any distance pricing plans,” according to Copps.
“The revenue-based approach is only equitable if people who use the
system pay for the system,” said the FCC Commissioner, who added he
won’t commit to a numbers or connections approach at this time.
Commission Challenges
Copp’s keynote candor resonated with the NTCA audience and was
occasionally upbeat.
“Our work [at the FCC] is cut out for us as we have more to decided on
and less time in which to decide and we’re still trying to get a fifth
commissioner,” said Copps. “But I remain an unabashed optimist about
our future.”
Copps told the audience that with concern of crippling events caused by
terrorists and Mother Nature (Hurricane Katrina) fresh in mind, that FCC
Commissioner Martin has committed to create a new FCC bureau
specifically for handling public safety and homeland defense.
Integrating rural healthcare into the nation’s emergency systems is an
area where “ the FCC could play a real and important role,” Copps told
the audience.
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