Understanding The FCC USF Reform

Posted: April 29, 2016

After years of hearing pleas for reform from telcos across the country, the FCC released an order at the end of March reforming the federal Universal Service Fund (USF). The system, which collects and distributes funds in order to support high-cost carriers, had long been under stress from changing consumer trends moving away from landline service and toward broadband-only households.

Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association, said all of the implications of the new system are still unclear, but the FCC has taken a significant step.

“(The) order represents a watershed moment in reforming the USF programs upon which these carriers rely,” Bloomfield wrote in a recent statement. “We are in the process of reviewing the order now, but we are hopeful that it contains thoughtful, targeted updates that respond to consumer demand for broadband and build upon the already unparalleled work of smaller carriers in leading the broadband charge to date in rural America.”

Bloomfield was clear that the reform likely contained some items TTA members and other telcos may not like.

“We also recognize that the order contains certain measures that change the ways in which these successful USF mechanisms have worked before,” she wrote. “As Chairman Wheeler said himself in a recent blog, none of us got all that we wanted or hoped for in this reform. It will take time, analysis, and experience to understand whether certain measures actually further or hinder the mission of universal service, but we very much appreciate the FCC’s willingness to discuss the development and implementation of such measures.”

The biggest benefit may be the establishment of clear ground rules that will allow telcos to plan for the future with confidence.

“We also hope that, at the very least, action on these measures will help to restore some degree of regulatory certainty by resolving issues that had been the subject of potential reform for years or even decades,” she wrote.

As for how the reform will affect TTA members, Manny Staurulakis of JSI will be outlining the changes during a session at the TTA Annual Meeting on Tuesday June 7.