FCC Chairman Genachowski has set a vote tomorrow for a Notice of Proposed Rule Making on Universal Service Fund and Intercarrier Compensation reform.
Some of the ideas Mr. G sketched out in a speech today, in which he called the ICC System “flawed” and “unstable” and the USF “plagued with inefficiencies”, had already been outlined in the FCC’s National Broadband Plan.
The most striking proposal in the speech, delivered at The Information Technology and Innovation Foundation, was a plan to “phase down intercarrier payments.”
As I’ve written about before (see the “Shoot the Laywers” post), the ICC rewards local carriers, mostly rural, with high per minute payments for calls terminated on their switches. These access fees are split with services that have set up intimate talk —read porn—conference bridges in what is referred to as “traffic pumping.”
Traffic pumping and bizarre rate arbitrage schemes may make for a fun read, but the bigger issue is how to pay for broadband in rural and low-income areas.
The FCC has recognized that while well-intentioned, indirect ICC rate subsidies for rural carriers and direct use of USF monies in the FCC’s High Cost program have led to perverse incentives.
But instead of abandoning the policy of a universal broadband, Mr. G’s FCC is instead focusing on simplifying the incentives.
There radical idea behind its “Connect America Fund, the Nation Broadband Plan’s replacement program to the USF, is to actually, um, pay for broadband, not maintaining rusting class 5 switches.
The FCC, with help from Congress and the courts, is quite capable of screwing all this up. But I am actually hopeful about this.
The specifics will come tomorrow when the NPRM is published.
Related articles
- ITExpo Regulatory 2.0: Shoot All the Lawyers (technoverseblog.com)
- Chairman Genachowski’s Remarks on Modernizing USF (fcc.gov)
