Raging Battle Continues Between ‘ABC Plan’ Friends, Foes

A Washington, D.C.-based think tank believes U.S. customers could pay approximately $14 less per year in communications access charges if the American Broadband Connectivity Plan’s (the ABC Plan’s) proposed reductions are fully implemented as part of the Federal Communications Commission’s (FCC’s) reforms.

The ABC Plan proposes, among other things, to cut switched access rates to near zero ($0.0007 per minute) and to raise the cap on subscriber line charge for five consecutive years.

A new report authored by Phoenix Center Chief Economist Dr. George S. Ford on the proposed Universal Service Fund (USF) reforms says each customer could pay approximately $14 less per year in access charges if the reductions are adopted.

“Multiplied by the total number of access lines provided by the FCC’s most current data, the ABC Plan could collectively save American consumers approximately $1.4 billion per year on traditional voice services provided by the nation’s largest phone companies,” it adds. (To read the report in its entirety, click here).

On the flip side, with the FCC set to circulate a USF/Intercarrier Compensation (ICC) order for consideration at its Oct. 27 open meeting, the NCTA and the ACA filed a joint letter at the commission outlining a new proposal to a telco’s right of first refusal in the agency’s ABC Plan for USF reform.

Under the ABC Plan, a telco would be given a right of first refusal in any wire center where it provides broadband to at least 35 percent of households.

To date, the two groups have opposed the ABC Plan’s right of first refusal proposal “because it is neither competitively neutral nor fiscally responsible nor does it provide consumers with adequate broadband service.” That said, NCTA and ACA “understand that the FCC wishes to move forward with a final order as soon as possible and in the interest of compromise sets forth a new proposal contained herein.”

Compared to the right of first refusal proposal in the ABC Plan, the NCTA/ACA proposal “better promotes the Commission’s universal service reform principles because it will produce more immediate broadband deployment in areas where it is most needed and distribute support in a more competitively neutral and fiscally responsible manner while providing for an adequate transition from the current legacy fund.”

To the extent the FCC decides to include rights of first refusal as part of its USF reform, the groups propose the agency establish the coverage threshold to help ensure no more than $600 million annually in support is awarded pursuant to a right of first refusal. They also believe rights of first refusal only should be awarded in areas that fall below the 35-percent threshold, saying the current ABC proposal would award support primarily in areas where the ILEC already has built broadband facilities.

Lastly, if the FCC goes for rights of first refusal, it should be awarded for a shorter period of time than the 10 years proposed in the ABC Plan – no more than six years, NCTA and ACA say.

In separate but related FCC news, the ACA asked the agency “to take firm action against public and private entities that impede broadband deployment by demanding excessive fees to access rights of way or taking unacceptably long amounts of time to process necessary forms and applications, causing frustrating delays and adding substantially to costs.”

As such, the group ACA filed comments to highlight what it sees as numerous barriers facing independent companies “that either prevent or significantly increase the cost of broadband deployment in rural communities.” Included are sworn declarations from ACA members illustrating “many of the impediments that small and medium-sized providers are facing in attempting to connect hometown America to the fastest broadband services available.”

According to ACA President and CEO Matthew Polka, “ACA members are always looking for opportunities in the market to invest their own money in deploying broadband in unserved areas and in areas that would provide consumers with another competitive choice. However, these opportunities for private investment in broadband deployment are far too often delayed or derailed due to the inability of ACA members to receive necessary rights of way on reasonable terms.”

The comments cite the efforts of ACA member Sierra Nevada Communications (SNC), which seeks to provide high-speed, wireline broadband service to the 5,000 residents of Long Barn, Cold Springs and Pinecrest/Strawberry in California, in an area bordering the Stanislaus National Forest. To do so, SNC needs approval from the U.S. Forest Service, and that application has been pending approval for seven years.

-Debra Baker