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ACA Supports Creation of New Fund at FCC to Drive Broadband Deployment in Unserved Areas


The American Cable Association told the Federal Communications Commission that the trade group supports the creation of a fund, like the FCC's proposed Connect America Fund ("CAF"), to provide financial assistance to drive broadband service deeper into unserved communities, provided the fund is structured in a competitively neutral manner that promotes robust last-mile and middle-mile deployment.

ACA's support for a new broadband support mechanishm came in a Sept. 22 meeting between ACA representatives and six members of the FCC's Wireline Competition Bureau, including Deputy Bureau Chief Carol Mattey. On hand for ACA were Ross J. Lieberman, Vice President of Government Affairs, and ACA outside counsel Thomas Cohen with the Kelly, Drye & Warren law firm.  The purpose of the meeting was to discuss the CAF, and the terms and conditions under which the CAF would operate.

In the meeting, ACA stressed the need for the FCC to promote the efficient use of broadband subsidies by awarding any support on a competitively neutral basis. Critical to achieving that goal, the ACA team said, is the award of funds through a program of reverse auctions or some other methodology that is provider-neutral.

ACA also recommended that unserved and underserved areas should be determined by reference to an objective government-established standard, such as census block groups, and not in a manner that favors any provider.

The ACA stressed that awarding broadband support on a competitively-neutral basis has important policy benefits. First, the quality and performance of broadband service should be greater as additional and more capable broadband providers vie to receive support. Second, the fund will be more efficient when more entities participate. Third, it will limit any government role in providing competitive advantages among broadband providers.

Last December, ACA unveiled a plan that would reform and modernize the USF, highlighted by making billions of dollars available for broadband for the first time without raising taxes.

ACA's plan would free up between $1 billion and $2 billion annually by capping the $4.4 billion high cost fund at 2009 funding levels, except that support would be maintained for truly small voice providers.  Under ACA's reform plan, high-cost fund support for telephone companies that face effective competition within their study areas or are no longer subject to price controls set by state regulators would be limited or denied.

A legacy of the break-up of the old AT&T monopoly in 1980s, the USF program spends more than $7 billion each year to keep local telephone service affordable for low-income consumers as well as consumers in high-cost and rural areas.  About $2.4 billion of the total is set aside for a special program intended to subsidize broadband access for eligible schools and libraries. USF funding is derived from a 12.3% tax on the interstate and international revenue of telecommunications carriers.

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