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ACA’s Lieberman Appears Before FCC Workshop On Universal Service Reform

American Cable Association Vice President of Government Affairs Ross J. Lieberman testified April 27 at a Federal Communications Commission workshop to outline the trade group's policy goals in connection with the agency's plan to subsidize broadband deployment and Internet access service for the first time.

The FCC's goal is to transition the USF program from one designed to keep traditional telephone service affordable in rural areas of the country to one that helps underwrite the cost of broadband deployment and high-speed Internet service in those same areas, particularly those classified as unserved.

The webcast of the event, held in Washington, D.C., at FCC headquarters from 9:30 a.m. to 3:30 p.m., is available at:  Universal Service Fund Reform Workshop.   Lieberman's panel begins at 191.42 on the timer in the lower righthand corner of the screen.

In his comments, Lieberman stressed that ACA supports FCC proposals that reorient the USF High Cost Fund and create the Connect America Fund (CAF) for broadband, calling them a good starting point for achieving universal broadband service within a reasonable period of time. He added that ACA believes that  through refinements and targeted rebalancing proposed by ACA, the FCC can more efficiently and effectively achieve its public interest objectives.

In terms of a budget plan, the FCC should cap the size of the CAF and any existing high-cost programs at the year-end 2010 High-Cost Fund level.  These are necessary steps, Lieberman said, because the High-Cost Fund has grown enormously since 1996 and has become increasingly costly to consumers.  Even with a hard cap, the year-end 2010 funding level for CAF will be sufficient to transition from the current support mechanisms and allow the FCC to meet its universal broadband service goal, he said.

Lieberman added  that CAF funding should replace in time support for the High-Cost Fund - with appropriate transition mechanisms to ensure no household loses access to voice service.  CAF should be available to both fixed and mobile broadband providers, and the FCC should allocate separate support for each within the total CAF because the performance, coverage, and reliability capabilities of fixed and mobile differ significantly, Lieberman said.

Wireline CAF support should initially focus on providing capital grants to a single provider - distributed through reverse auctions - to extend fixed broadband services to unserved areas.   Mobile CAF support should be initially provided by the proposed Mobility Fund.  Additional support shall be determined through a new proceeding.

For larger telephone companies, CAF funding should be achieved by phasing down interim High-Cost support and eliminating current support in census block areas where broadband providers are providing service without the assistance of any High-Cost support. Coupled with that should be elimination of the identical support rule, as the FCC has proposed.  Such steps should produce initial funding for the CAF in excess of $500 million annually - with this amount expected to grow to approximately $1.5 million annually, Lieberman said.

Lieberman emphasized that broadband support should focus on truly unserved areas. CAF support  should be precisely targeted to areas where at least 90 percent of the households do not have access to broadband service at speeds at least equal to a national average broadband speed, which initially should be set at 4 Mbps downstream and 1 Mbps upstream.  Auctions would occur first in unserved areas, and auction winners should be required to build out facilities that can provide broadband speeds of 16 Mbps downstream and 4 Mbps upstream to the entire census block at a specified price within specified period of time.

For smaller telephone companies, the FCC should offer them a right of first refusal to continue to draw from the High-Cost fund for a period of eight years so long as they agree to provide broadband service in all their service areas at specified minimum performance levels.  At the end of that period, High-Cost funding to these providers would sunset, and the FCC would undertake the process of eliminating support where competitors not receiving support provide service and auctioning support in unserved areas, Lieberman said.

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