Major U.S. telecoms push rural broadband plan

Six of the nation’s leading broadband providers on Friday (July 29) submitted to the Federal Communications Commission (FCC) a proposal to speed broadband deployment to more than 4 million Americans living in rural areas.

Key goals of the plan include:
• Modernizing the federal Universal Service Fund (USF) so that the money is more effectively used for broadband deployment in rural areas;

• Reform the Intercarrier Compensation System in which telecoms bill each other for handling traffic;

• Provide similar reforms and options for smaller telecom companies; and,

• Connect virtually all Americans to broadband within 5 years.

The six companies — AT&T, CenturyLink, FairPoint, Frontier, Verizon and Little Rock-based Windstream — collectively serve the majority of U.S. telecommunications customers, including those residing in high-cost rural areas, which are the primary focus of USF support.

Joining the companies in support of reform are the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies and Western Telecommunications Alliance.

“Together, the proposals will benefit consumers and promote the goals of the National Broadband Plan, which called for overhauling these two complex systems to address the modern-day mission of supporting broadband deployment as cost-efficiently as possible,” noted a statement from the six carriers.

The companies backing this plan have reached out to a wide range of stakeholders—from other providers of broadband service, to edge companies and consumer and rural organizations.  The companies have been meeting since February to iron out their proposal and look forward to comments as the process moves forward at the FCC.

Criticism of the plan is that it could squeeze out or bankrupt small rural and private companies who have aggressively invested in fiber and other technology to provide rural broadband. The small companies who aggressively built out broadband in rural areas were depending on the USF to help recover costs. If the USF is phased out, the small carriers would find themselves without adequate funding.

The large carriers say transition issues have been considered.

“This proposal modernizes the USF and ICC mechanisms as our industry migrates toward a broadband-oriented future,” Mike Rhoda, senior vice president, Windstream Government Affairs, said in a statement. “Importantly, the proposal provides an adequate transition period for carriers to move from the current structure to one that will meet the changing needs of telecommunications consumers and help close the rural-rural divide that has persisted under the existing flawed framework.”