USA - Large operators have proposed reforms of the Universal Service Fund and intercarrier compensation system

[totaltele.com] AT&T, Verizon among six service providers to submit proposals to FCC in bid to overhaul Universal Service Fund, intercarrier compensation system.
Six U.S. telcos have joined forces to submit proposals to the Federal Communications Commission (FCC) on how to extend broadband services to 4 million rural end users.

Called America's Broadband Connectivity Plan, the six companies – AT&T, Verizon CenturyLink, Fairpoint, Frontier and Windstream – aim to overhaul the country's $4.5 billion Universal Service Fund (USF) and the intercarrier compensation (ICC) system, which sets out rules on how much service providers charge for carrying one another's traffic, in a bid to provide the entire population with a minimum connection speed of 4 Mbps within five years.

"After years of debating and discussing how to update the universal service and intercarrier compensation programs for the broadband era, a workable framework has emerged," said Hank Hultquist, vice president of AT&T's federal regulatory activities, in a statement late last week.

"To truly bring broadband services to all Americans, the rules of the road for the black rotary phone desperately needed to be updated for today's competitive, high-speed communications networks," he said.

The proposals would change the USF over a period of five years into one with an exclusive focus on rolling out broadband networks, called the Connect America Fund (CAF). The CAF would identify areas where it is more costly to deploy broadband networks and where there is no business case for offering services, and provide support to a single telco in each area.

The plan would also see termination rates for intercarrier compensation fall to $0.0007 per minute over a five-to-eight-year timeframe.

"This proposal modernises the USF and ICC mechanisms as our industry migrates toward a broadband-oriented future," said Mike Rhoda, senior vice president at Windstream's government affairs department, who said the plan also provides an adequate time period for carriers to transition to the proposed framework.

"We worked hard to reach consensus on a workable framework, and each of our companies was dedicated to producing a sound proposal that will benefit consumers and the industry," added Kathleen Grillo, senior vice president of federal regulatory affairs at Verizon. "We are hopeful that this framework will gain even more industry support."

Indeed, a number of industry associations have already pledged their support for the telcos' reform proposals, including the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies, and the Western Telecommunications Alliance.

US telcos team up on rural broadband plan