FCC Cancels Divisive ICC/USF Vote
FCC Chairman Kevin Martin has caved to the pressure. The agency announced Monday afternoon commissioners will not follow through with the scheduled Election Day vote on proposed, controversial intercarrier compensation/Universal Service Fund (ICC/USF) reform.
The cancellation is a blow to Bell companies. AT&T Inc. (T), Verizon Communications Inc. (VZ) and Qwest Communications International Inc. (Q) all had backed the draft order because, from the information that leaked out of the FCC, it favored them over CLECs, RLECs and consumers. Opponents of the proposal had gone so far as to accuse the FCC of allowing the Bells to help write the overhaul, an allegation the agency denied.
Martin told the Associated Press on Nov. 3 he wasn’t able to secure votes from the other four commissioners. He said they want to put the draft order out for comments, a move he had resisted. It’s telling that Martin couldn’t secure his fellow Republicans’ support in advance of a vote – it indicates serious discomfort with the details, which no one but FCC commissioners have seen.
The terminated vote further leaves Martin struggling to put a positive stamp on his legacy. He started his tenure at the FCC as a commissioner dedicated to competitive principles. He even was named a “Champion of Competition” by COMPTEL in the spring of 2004. But once he was appointed chairman, Martin started to prove his bias for big business and deregulation – think mergers that have led to the near-reformation of Ma Bell. Think approval of sweeping forbearance petitions, some of which haven’t been released to the public so only the recipient knows the extent of the exceptions. Think his support of a numbers-based USF regime; that would have slammed CLECs’ wallets because they tend to serve SMBs, not residents, and those customers often buy dozens of lines. Think support of reverse auctions, which would have allowed the lowest bidder to enter a service territory with USF money. Opponents said that approach would result in subpar buildouts.
Throughout his time at the FCC, Martin has spoken of fixing ICC and USF. The docket goes back to 2001. But it was only late this summer that Martin decided to push an overhaul in just a matter of weeks. He said the short timeframe was due to a federal court mandate for an FCC vote on an ISP remand by Nov. 5. Detractors, though, said that was no excuse for forcing overall ICC/USF reform. They said there was too much at stake, too much to consider and, the kicker was, they hadn’t been privy to the proposed changes.
Over the past two weeks, service providers, associations, states, Congress and consumer activists have banded together to lobby the FCC to hold off on this ICC/USF vote. That the cancellation comes less than 24 hours before the FCC meeting shows just how hard Martin tried to keep the matter on the agenda.
Republicans Robert McDowell and Deborah Tate, and Democrats Michael Copps and Jonathan Adelstein, released a joint statement late Monday afternoon in response to the aborted ICC/USF vote. They said they were disappointed that Martin removed the reform item altogether; they had asked him to wait until next month to hold a vote.
“Four commissioners provided the chairman bi-partisan, constructive and substantive suggestions, and stated that notice and comment should be sought on the proposals, with an understanding that we would all be prepared to vote on Dec. 18,” they said.
They added: “We remain committed to fulfilling our obligation to tackle these difficult issues, and have set forth a reasonable path for completing comprehensive reform. We remain hopeful that the consensus process we have pursued regarding this issue will ultimately lead to a thoughtful, well-reasoned item that will inure to the benefit all Americans.”
The total removal reduces the chances this item will come before this commission again, since its makeup will change once a new president takes office.
Still, the FCC must address a court remand of rules for ISP-bound dial-up calls, or old regulations will go back into effect. As telecom analysts for investment bank Stifel Nicolaus wrote in a client memo, those rules cap many Bell-to-CLEC and Bell-to-wireless payments for exchanging traffic.
Meanwhile, groups that had fought for transparency in the ICC/USF action and additional time to comment praised the FCC’s reform delay.
The National Telecommunications Cooperative Association praised McDowell, Tate, Copps and Adelstein for, as it said, recognizing the importance of due process.
“As the commission undertakes comprehensive universal service reform, it should focus on providing sufficient, sustainable, and predictable USF support for broadband throughout the high-cost, rural areas of United States, rather than on reducing or eliminating that support,” the association stated.
Meanwhile, Ray Baum, chairman of the [National Association of Regulatory Utility Commissioners telecom committee, said the organization hopes Martin will “agree with the other four FCC commissioners, an overwhelming number of lawmakers, state regulators, industry and consumer groups, and open these proposals for public comment.”
Other entities active in lobbying for a postponement had yet to release statements but presumably COMPTEL, NASUCA, the Rural Cellular Association and certain federal lawmakers were thrilled with the shift in events. Reps. Rick Boucher, D-Va., and Lee Terry, R-Neb., are among the House lawmakers who recently pressed Martin to “properly design” ICC/USF reform.
The commission on Tuesday still plans to vote on the “white spaces” issue. A number of companies want to use the unused spaces between digital TV broadcasting signals for wireless services and open-source devices. But high-profile figures including Dolly Parton and evangelical preacher Joel Osteen say use of white spaces will interfere with their wireless microphone transmissions.
