A renewed attack on the ICC mechanisms has arisen
recently, however, with several notices seeking to “refresh
the record” on how to move remaining ICC rate elements to
“bill and keep.” There is also discussion of how to head off
discrete so-called “arbitrage” practices that have caught
the attention of certain market participants and the FCC.
Industry discussions and FCC proceedings are ongoing, but
NTCA’s surgical focus continues to be upon:
a Closing clear arbitrage loopholes that undermine the
integrity of the ICC system as a whole.
a Obtaining alternative cost recovery for any reforms that
reduce ICC rates without squeezing already insufficient
high-cost USF budgets.
a Ensuring that transport responsibilities are not “flipped”
in a way that would have small rural carriers—and ultimately the rural communities they serve—bearing the full
cost of interconnecting with consumers across the nation
and the globe.
As 2017 dawned, one of the most compelling new communications topics was a potential package of funding, streamlining efforts and tax incentives to help promote deployment
of broadband networks. For a variety of reasons, including
broader political debates and other congressional priorities, efforts toward this infrastructure initiative have not
proceeded beyond tentative proposals and articulations of
principles. NTCA has been a leader in the discussions to
date, engaging in outreach with state governors in late
2016, assuming a prominent role within the Rebuild Rural
Coalition of rural and agriculture-focused stakeholders,
securing the first communications industry witness spot
at a Senate infrastructure hearing in February 2017, and
continuing to advocate for infrastructure funding to supplement the underfunded USF program. NTCA has also
pursued streamlining of permitting rules and processes
that can hinder broadband deployment, participating in
the FCC’s Broadband Deployment Advisory Council’s deliberations and supporting congressional measures to change
As it moves through other key priorities over coming
months, the Trump administration will likely release more
details on a comprehensive infrastructure package in early
2018, kicking off new discussions at the federal and state
level on the best means of promoting broadband deployment and balancing that goal with other infrastructure
needs and interests.
Net Neutrality/Internet Freedom/Open Internet
Even if infrastructure investment was one of the hottest
new telecom topics in 2017, the long-running debate over
net neutrality—or “internet freedom” or the “open internet”
—remains at the very top of the list in Washington, D.C.,
cost-based support, the budget controls are affir-
matively cutting support by 12.3% (or nearly $175 mil-
lion) through June 2018.
NTCA has led the charge for sufficient funding, petitioning for reconsideration of the budget in 2016 and promoting letters from hundreds of members of Congress in
recent months and over the past several years that press
for the levels of support necessary to make the reformed
USF mechanisms operate as intended. Pai has acknowledged the problems of the underfunded high-cost USF
budget, a strong bipartisan consensus on Capitol Hill has
emerged in favor of solutions to the budget crisis as suggested by NTCA, and several FCC commissioners have
likewise expressed public support for NTCA’s recommendations. As of the time of drafting of this article, current
indications are that the FCC will circulate a notice of proposed rulemaking by early 2018 suggesting ways of tackling the budget crisis in both the near- and longer-terms
and seeking input on other potential measures to shore up
the USF mechanisms.
As a separate but related matter, USF contribution
reform remained a largely sidelined issue in 2017 as immediate budget concerns took precedence. There appears to
be little to no appetite from others in the industry to tackle
such reform, but even so, NTCA continues to explore various means of more equitably “broadening the contributions base.” It is possible that a joint board of federal and
state regulators that has been examining contributions
reform since 2014 could finally come forward with some
concepts or even recommendations in 2018.
Finally, for those telcos interested in expansion opportunities (or a preview of the potential future of certain USF
programs), the Connect America Fund Phase 2 auction is
worthy of close attention. As the auction design is finalized early next year, this program will provide a decade of
support at bid-for levels to deploy broadband in currently
unserved areas where larger price cap carriers declined to
accept buildout obligations.
Intercarrier compensation (ICC) is a long-standing component of our comprehensive national universal service policy, providing revenues critical to keep rural consumer
rates reasonably comparable to those in urban areas.
While the FCC took significant steps in 2011 to remake the
mechanisms by transitioning certain ICC rates to zero—or,
euphemistically, to “bill and keep”—NTCA led the successful charge to protect other rate elements that were important to establishing financial responsibility for the costs of
getting traffic to and from rural America. The association
also fought for alternative cost recovery mechanisms to
help ensure that revenue streams would be continued for
some time to sustain universal service in rural markets.