November 14, 2009 12:35 PM

Broadband Team Finally Gets It Right! New NPRM on USF and Intercarrier Comp

Yeah, like I'm one to talk about someone finally "getting it right?"  I've posted exactly 0 blog entries in one month (but it was a long month and we did go off daylight savings time), and I get to be a critic?  Seriously, though, if they had such a thing as a "license to blog", mine would have already expired for lack of use.   But, in my defense, I haven't posted anything in a while, because the big telecom policy talk of the day has been the FCC's proposed "Net Neutrality" Rulemaking, which was released on October 22nd.  And, the fact is, I'm really uncomfortable with the subject of "net neutrality"--for several reasons, not the least of which is that I've always been kind of confused and intimidated by the subject, because it always meant something different to different people.  However, now that the FCC has given it a concrete meaning, I have no excuses, so I'll hold my nose and start writing on it very soon. 

The point of this post, though--because I'm not one of those "hater" bloggers (not all the time anyway)--is to give credit to the Broadband Team over at the FCC for their appropriately named 19th [Nervous Breakdown] NPRM where they ask about how the role of the current state of USF funding and distribution, and intercarrier compensation, can effect broadband deployment.  As I am wont to do, I will take credit for prompting this NPRM--even though the subject was inescapable for the Broadband Team if they were going to do a comprehensive report (which they seem to be striving for)--because I wrote a post on this same subject two months ago (back when I was blogging). 

The NPRM seeks, in my opinion the most important information of the inquiry, because, unlike a lot of panels and inquiries, this information could really end up setting the FCC's substantive agenda for the next year or more--after the report is issued.   The reasons these issues are so big is that they are so pervasive, and so relevant to broadband deployment to rural and low income areas, and have been neglected for far too long.  Moreover, in a broadband/Net-centric world, these two key policies remain firmly stuck in the pre-Telecom Act days.  Additionally, it must be noted that it is impossible  for the Commission to tackle my new favorite subject of Net Neutrality without first figuring out the effects of imposing "neutrality" on the two of the pillars of regulation that are currently built on discrimination.  The FCC really can't think about imposing system-wide "neutrality" on a system that was never built to accommodate that principle (beyond common carriage--which the FCC's proposed Net Neutrality rules go well beyond), until the Commission understands how the current system promotes, or discourages, broadband Internet usage. 

Think about it.  Universal service was to be achieved on the theory that long distance (voice) subsidizes local, urban subsidizes rural, and business subsidizes residential.  Similarly, interconnection prices (for originating and terminating specific calls) range from "free" (wireless termination) to 6-7 cents a minute or more (rural or intrastate toll landline terminations).  Where discrimination is the law, economic incentives run counter to the law--and unproductive regulatory arbitrage is rewarded.  This is the system that we have and that is crumbling.  It certainly merits a look by the Commission as to how this system--and potential reforms--might promote broadband deployment in places where deployment is stuck, but subsidies persist to flow. 

Finally, I think this NPRM will lead to the most long lasting effects on the Commission's agenda in the near future because these matters are the biggest matters affecting broadband deployment that the FCC has the most control over.  I said it before, but these are the biggest issues from the past, that will be the biggest issues for the near future--if the FCC gets it right.  Yesterday's announced NPRM assures that these issues will be accounted for in the report to Congress, and will probably produce more pressure from Congress to work on these matters for the sake of establishing a platform for economic growth. 

So here's to you, oh conjurers of the Congressional Report, crack open a cold Bud Light, and . . . get back to work. . . you don't have a lot of time left!

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